In addition to the regular questions on basic labour rights that form part of our company assessment, our engagement efforts last year focused on two aspects of concern in the garment and footwear supply chains: living wages and safe working conditions in garment factories, especially in Bangladesh.
Living wages in the garment supply chain
We started discussing the subject of living wages with companies in the garment and footwear industry in 2016 and set up living wage project with Dutch pension investor MN and ASN Bank.
The goal of this project is to encourage companies in the industry to pay living wages in their supply chain. Last year, the project group sent a ‘living wage manual’ to 16 companies, including Adidas, ASICS, Gap, Gildan Activewear, Hennes & Mauritz (H&M), Inditex, Nike, PUMA, and VF Corp.
This manual presents best practices on living wages and a concrete four-step approach to implement the payment of living wages in the supply chain. The manual led to follow-up dialogue with H&M, Inditex and Nike.
Bangladesh Accord extends commitment to textile workers
In April 2017, a large group of global investors, coordinated by the Interfaith Center on Corporate Responsibility (ICCR), issued its 4th investor statement, calling on signatories of the ‘Bangladesh Accord for Fire and Building Safety’ (2013) and the members of the ‘Alliance for Bangladesh Worker Safety’ to meet their obligations.
The statement urged all signatories to keep up the pace of the implementation of the agreement. The investor group also called on the signatories to commit beyond 2018 to complete the remediation process, to work with other stakeholders to support a living wage for garment workers and to create an environment in which workers can freely exercise their internationally recognized rights.
In June, the Accord was extended from 2018 to 2021. This extended version includes additional commitments to ensure that workers’ rights to freedom of association are respected and that their safety is protected. It also opens the opportunity to broaden the scope of the current agreement into other related industries or suppliers, as suggested in the April ICCR letter.
Although the extension of the Accord is positive, we have concerns about the next phase, beginning in May 2018. The Bangladesh government’s support for the Accord seems to be decreasing as they aim to transfer the functions of the Accord to a national regulatory body.
A second concern is the reduced number of current signatories that have signed up for the new period. We will continue to support the ICCR, in 2018 beginning with a call to all signatories to remain committed to this important process, and to sign the new agreement.