Disaster Looms as the Coronavirus Disrupts the Garment Supply Chain

Disaster Looms as the Coronavirus Disrupts the Garment Supply Chain

Disaster Looms as the Coronavirus Disrupts the Garment Supply Chain

Fashion brands are sticking suppliers and workers with unpaid bills.


When the coronavirus pandemic shuttered storefronts around the world, fashion outlets abruptly canceled factory orders. Piles of new clothes now sit idly in the warehouses of Western retailers. Meanwhile, garment workers across Latin America and Asia face factory shutdowns, mass unemployment, and assaults on their unions.

By late April in Bangladesh, brands suspended or revoked clothing orders worth about $3.2 billion. About 2.3 million of the 4 million Bangladeshi garment workers have been laid off or furloughed. By early June, export orders had fallen by 40 to 45 percent compared to 2019, according to an industry association. Garment workers in Bangladesh earn a minimum wage of about $95 a month, and any interruption in payment can send families into cycles of debt.

“The companies who make profit out of these workers in the [garment] production countries…just left us behind to be starving,” said Kalpona Akter, a garment worker turned labor activist with the Bangladesh Center for Worker Solidarity.

Although some factories have begun reopening, labor advocates and watchdog groups say that many brands and retailers never paid for withdrawn orders that were completed or in production. Scott Nova, the executive director of the Worker Rights Consortium (WRC), explained that brands and retailers typically pay long after the clothes have hit the racks. He said these companies were effectively “robbing suppliers to improve their own cash position.”

Nova added that multinational corporations’ sticking suppliers and workers with unpaid bills is “one of the most egregious forms of unethical corporate behavior you’re likely to ever see, involving tens of billions of dollars essentially being stolen from suppliers and workers by brands and retailers, who are in much better financial position to survive this crisis than the suppliers and the workers.”

In recent weeks, following public criticism from WRC and other advocacy groups, some brands have pledged to pay the full cost of their pre-pandemic orders, including H&M, UNIQLO, and Target. But as of June, WRC reports that 16 others, including Sears and Gap, have not agreed to pay all their outstanding orders. (Sears did not respond to a request for comment. Gap said in a public statement that “lower than 3 percent” of orders had been canceled and it is “working together” with suppliers to deal with the crisis.)

Christie Miedema, campaign and outreach coordinator with Clean Clothes Campaign, said, “This crisis has laid bare what has actually always been visible in the garment industry…. Workers have always been paid poverty wages, have never been able to save up for a rainy day—for a crisis like this—and are now left with nothing.”

Union busting

For some garment workers, the factories are operating, but management is using the pandemic as a pretext to fire pro-union workers.

Preap Munysovann, an official with the Cambodian union Collective Union of Movement of Workers (CUMW), told me that “during this Covid-19 pandemic in the world, as well as in Cambodia, the employers take this opportunity to…repress the workers [by trying to] illegally terminate or dismiss our union representatives.”

In early April, Cambodian police arrested and jailed Soy Sros, a local union president and shop steward, for speaking out against layoffs. After she criticized her employer, Superl Holdings, on social media for its plans to suspend 88 workers—all of them unionized—the company filed criminal charges against her, including for defamation and spreading “fake news.” The court then piled on two charges of provocation.

She spent nearly two months in pretrial detention before being released on bail in late May. After pressure from civil society groups, Superl dropped its complaint, reinstated Soy, and reached an agreement with the union, promising back pay, protection from retaliation, and better working conditions. Still, Kate Spade and Michael Kors, two brands that contract with Superl, ignored labor groups’ appeals for intervention while Soy was in jail.

Soy’s release was a victory, but Cambodia’s garment workforce remains gutted. Another 724 workers, including 11 pregnant women, were dismissed from a factory on June 13, according to the global labor federation IndustriALL. The Cambodian government is offering the mostly female garment workers welfare payments of about 40 percent of minimum wage—well short of a living wage. CUMW is demanding that brands and employers subsidize those payments to raise them to the equivalent of the minimum wage. Although several large brands have previously pledged to support unions and improve wages, CUMW says the companies have so far failed to provide workers with any relief.

Andrew Tillet-Saks, a labor organizer based in Yangon, Myanmar, said that employers have claimed that “they have to reduce the workforce because of Covid-19 related shortages—either in orders or raw materials. But then they just target the union members in the factory…. So it’s really an example of disaster capitalism.”

The Myanmar government’s strict stay-at-home orders have also encouraged factory managers to prevent group meetings, he added. “So they’re allowed to go to work shoulder to shoulder by the thousands to produce profits for the brands and for the factory owners,” he said, “but they’re not allowed to assemble if it means protesting the lack of [personal protective equipment], striking, or having a union meeting.”

The Myan Mode factory recently dismissed several hundred workers, the vast majority union members. After news outlets reported on the mass firing, some workers have been reinstated. Worker-organizer Ye Yint told me through an interpreter that to restore their organization, “We are holding meetings, and we are doing pamphleting for the workers inside to join the union…. We have to rebuild the union inside the factory.”

Fellow organizer Ohnmar Myint, who was among a group of 25 workers who won their jobs back, said, “The workers use their sweat and blood to make those clothes.… That’s what I want to say to the customer.”

Safety Last

As infections surge in poorer countries, the pandemic poses major workplace health risks. Although the number of known infections is relatively low in key garment-exporting countries, poverty and limited access to health care leave workers vulnerable to outbreaks at factories. In Bangladesh, the manufacturers’ trade association reported in early June that 299 garment workers had been infected, but without widespread testing, labor leaders say the actual infection rate is likely many times higher. Akter noted that in the factories that have kept operating, safety measures such as social distancing and mask wearing have often been lacking.

Garrett Brown, an industrial hygienist with the Maquiladora Health & Safety Support Network, a California-based group of occupational safety experts, said that infection control is nonexistent in many of these factories, which, even in normal times, are often rife with safety problems. As both exporting and importing countries seek to reopen their economies, Brown warned, the drive for profits will be at odds with workplace safety. “It’s totally impossible to have an effective infection control system if you expect to have the pre-Covid productivity and output levels right away.”

In the United States, garment factories are facing health and economic crises. The Los Angeles–based labor group Garment Workers Center said that employers are failing to provide basic hygiene measures, such as soap and allowing workers to stay at least six feet away from each other.

Laura, a pseudonym to protect her from retaliation, works in a Los Angeles production facility with about 35 workers. In an interview with Dissent, she said through an interpreter that she faces multiple health threats at her workplace, including “filthy,” “rat-infested” bathrooms without enough hand soap. Ironically, her factory has shifted its production line to making face masks, even though workers themselves are not provided with protective gear.

“We’re not given any masks,” Laura said. “You have to bring them on your own.” In a city with tens of thousands of cases of Covid-19, “I’m worried about getting sick and also about not being paid well.”

Fashion labor post-pandemic

In addition to pushing for stronger labor protections during the pandemic, advocates for garment workers are trying to use the crisis to spur long-term changes.

One immediate reform would be to compel brands to pay more up front, so suppliers are not left in the lurch when orders are canceled. Separately, the Asia Floor Wage Alliance, which represents labor groups in South and Southeast Asia, has proposed that corporations provide workers with a one-time supplementary payment of about 2 percent of their total orders at the factory for the preceding year—about the equivalent of two months of wages.

Beyond revamping factory payment schemes, labor groups are pushing brands to invest directly in the social safety nets of garment-exporting countries.

The International Labour Organization (ILO), the International Organization of Employers, IndustriALL, and the International Trade Union Confederation, and several brands issued a joint action plan in late April that encouraged the creation of “sustainable systems of social protection” and suggested that international financial institutions could be involved in offering loans and credit to employers.

“It’s long been known that the prices that brands are paying and the way that they’re making orders is not sufficient to support the social security system, which is why garment-producing countries haven’t been able to do that for garment workers,” said Jenny Holdcroft, assistant general secretary of IndustriALL. H&M, one of the signatories, said in a statement that it planned “to work in collaboration to promote the establishment of sustainable systems of social protection,” but could provide no details on how those systems would be developed.

Anannya Bhattacharjee, international coordinator of the Asia Floor Wage Alliance, said via e-mail that the ILO plan was “an important step,” but could be carried out only with a commitment to “fair pricing for suppliers that allows for labour rights to be respected in factories.”

She noted that “none of the Asian unions were consulted or involved” in drafting the document, and emphasized that no relief program would be effective unless accompanied by a legally binding framework “that holds brands directly accountable to their specific supply chains.”

Although many brands have “ethical sourcing” initiatives, these tend to be voluntary factory auditing programs that have been criticized as glorified public-relations exercises. One rare exception is the Bangladesh Accord for Building and Fire Safety, a binding global framework for fashion brands that has made significant strides improving safety conditions in many factories in Bangladesh. But it was also a specific response to an industrial disaster—the collapse of the Rana Plaza factory compound in 2013—not a pandemic that has pummeled the global economy, affecting both fashion brands and consumers.

For now, Akter will continue organizing garment workers in the streets, but she said change in the industry also has to include a moral appeal to regular shoppers.

“I know that the whole world is in a devastating situation,” she said. But in the fashion industry, “the consequences for brands, even if this pandemic goes for a few more months, [is] losing a fraction of their profit. The manufacturers will be losing their profit share. But workers…will lose jobs; losing jobs means no money; no money means no food…. The consumer has to understand that.”

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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