Impact of Covid-19 on management to eradicate modern slavery from global supply chains: A case study of Indian fashion supply chains
Lead Research Organisation:
University of Leeds
Department Name: Sch of Design
Abstract
Modern slavery describes cases of extreme exploitation of people in economically deprived situations that leave them with no choice but to take any paid job; and often paying an outlandish recruitment fee to secure the position. Modern slavery pre-dates Covid-19 and has been found to be particularly prevalent in India and within Indian clothing and fashion supply network for international brands and retailers. The economic and political responses to the pandemic in high value export markets such as the UK, as well as local responses in manufacturing countries such as India, are likely to increase the existing vulnerabilities of these workers to modern slavery.
Claiming force majeure in light of the significant down turn for clothing and fashion retail in the UK and other international markets, fashion brands and retailers have cancelled payments for delivered products and have also postponed or cancelled contracted orders placed with manufacturers in many developing countries such as Bangladesh, Cambodia, India, Sri Lanka, Turkey and elsewhere. As a consequence of these corporate decisions and the economic lockdowns in these many of these countries, the pressure on fashion suppliers is more intense than ever before. As a consequence, there is a high likelihood that workers in fashion factories will be exposed to greater risks of modern slavery issues. For an industry associated with a very wide range of modern slavery issues, the impact of Covid-19 on welfare, well-being and legal rights for millions of workers could be the most dramatic the industry has ever seen.
Fashion brands and retailers in the UK with an annual turnover in excess of £36 million are required through the Modern Slavery Act 2015 (MSA) to investigate and monitor the extent to which their global supply chains are at risk of modern slavery. Incidences of modern slavery need to be addressed and progress in eradicating modern slavery reported annually. Although previous research by this project team found that there are pockets of good practice within the UK fashion industry for adherence to the MSA, the relatively low value and poor profitability of the sector, and its reliance on complex global supply chains leaves the industry, and its associated workers exposed to high risk issues for non-compliance to the MSA. The rapid and deep cutbacks in the UK fashion market leading to cancellation or postponement of orders are highly likely to create even more tension in the ability of brands and their suppliers to adhere to Modern Slavery Act.
The objective of this project is to use baseline data collated from a recently completed project funded by the British Academy/DFID to assess how the industry and suppliers in India have reacted to the Covid-19 pandemic and associated lockdown strategies and the short term and long term implications for workers within the industry.
By using the pre-Covid-19 findings and working with the same partners and industry stakeholders, a direct comparison between pre and peri-Covid-19 can be made to determine areas of increased risk for workers. By identifying these risks, opportunities for improved guidance and development of policies can be determined to mitigate these risks.
The potential longer-term impacts of the pandemic on the protection of workers in the global supply chain will be explored by understanding how it has affected the relationships between UK fashion brands and their suppliers and the brands' commitment and resources to eradicate modern slavery. We will draw implications from this on the appropriateness of the MSA.
Claiming force majeure in light of the significant down turn for clothing and fashion retail in the UK and other international markets, fashion brands and retailers have cancelled payments for delivered products and have also postponed or cancelled contracted orders placed with manufacturers in many developing countries such as Bangladesh, Cambodia, India, Sri Lanka, Turkey and elsewhere. As a consequence of these corporate decisions and the economic lockdowns in these many of these countries, the pressure on fashion suppliers is more intense than ever before. As a consequence, there is a high likelihood that workers in fashion factories will be exposed to greater risks of modern slavery issues. For an industry associated with a very wide range of modern slavery issues, the impact of Covid-19 on welfare, well-being and legal rights for millions of workers could be the most dramatic the industry has ever seen.
Fashion brands and retailers in the UK with an annual turnover in excess of £36 million are required through the Modern Slavery Act 2015 (MSA) to investigate and monitor the extent to which their global supply chains are at risk of modern slavery. Incidences of modern slavery need to be addressed and progress in eradicating modern slavery reported annually. Although previous research by this project team found that there are pockets of good practice within the UK fashion industry for adherence to the MSA, the relatively low value and poor profitability of the sector, and its reliance on complex global supply chains leaves the industry, and its associated workers exposed to high risk issues for non-compliance to the MSA. The rapid and deep cutbacks in the UK fashion market leading to cancellation or postponement of orders are highly likely to create even more tension in the ability of brands and their suppliers to adhere to Modern Slavery Act.
The objective of this project is to use baseline data collated from a recently completed project funded by the British Academy/DFID to assess how the industry and suppliers in India have reacted to the Covid-19 pandemic and associated lockdown strategies and the short term and long term implications for workers within the industry.
By using the pre-Covid-19 findings and working with the same partners and industry stakeholders, a direct comparison between pre and peri-Covid-19 can be made to determine areas of increased risk for workers. By identifying these risks, opportunities for improved guidance and development of policies can be determined to mitigate these risks.
The potential longer-term impacts of the pandemic on the protection of workers in the global supply chain will be explored by understanding how it has affected the relationships between UK fashion brands and their suppliers and the brands' commitment and resources to eradicate modern slavery. We will draw implications from this on the appropriateness of the MSA.
Organisations
Publications
Dowling, F.
(2021)
The impact of Covid-19 on unethical practices in global supply chains
Sumner, M
(2022)
Impact of Covid-19 on Indian fashion supply chains
Sumner, M. P.
(2021)
Fashion supply chains, modern slavery and the covid19 pandemic
| Description | Against the backdrop of initial lockdowns instigated by national governments, fashion brands and suppliers were under significant financial pressure. Lockdowns had an immediate effect on sales of clothing and therefore, on brand turnover and profits, and ultimately their survival and employment for their workers. Existing and new orders were significantly curtailed, with a direct impact on the global supply chain. The pandemic was different to previous global crises in that it affected both brands and suppliers at the same time. However, the impact of the pandemic on brands and suppliers was uneven. Brands only reliant on sales through physical stores suffered considerably more than online and omni-channel brands. Equally, suppliers at different tiers of the supply chain tended to see different impacts at different times. Garment makers were immediately impacted by the loss of orders, while other tiers had some insulation from some of the initial impacts of the pandemic. Actions taken by governments to enforce lockdowns further affected suppliers, with the resulting mass migration that occurred in India having a specific impact on the fashion industry due to its dependency on migrant labour. The complexity of impacts associated with the pandemic amplified the existing risks rather than creating new forms of modern slavery. The loss of income and precarious financial situations for workers created heightened risks of bonded labour, poor pay, and human trafficking. Unpredictable demand was suspected of driving additional unauthorised subcontracting, with associated risks of unethical practices. Reductions to the capacity of Ethical Trade Teams within UK brands and fewer government labour inspections left workers exposed to exploitive behaviours across the supply chain. However, those brands who had historically invested in ethical trading infrastructure and practices benefited from having existing communication channels and supplier knowledge. After the initial shock of the pandemic, these brands and their suppliers reported a greater mutual understanding and awareness of the impacts of the pandemic for each party. The shared experience of the pandemic fostered a new level of empathy, and, in turn, this improved communication, strengthened brand/supplier relationships, and created greater trust. These changes were believed to enhance collaboration, improve flexibility, and create greater visibility between brands and their suppliers, in turn improving the resilience of these relationships. Over-time these changes may protect against further shocks and support ongoing governance to manage the risks of modern slavery across the supply chain. Long-term engagement with Section 54 of the Modern Slavery Act was identified as a positive factor that provided a foundation for these stronger, more resilient relationships. Our research showed that compliance with section 54 of the Modern Slavery Act was only partially responsible for the development of improved brand and supplier relationships, and the resultant mitigation of some of the issues created by the pandemic. It was clear that awareness of the Modern Slavery Act within the supply chain had not improved since our original baseline research in 2017/18, which indicated that training and management of modern slavery issues needs to be improved and extended through the global supply chain. |
| Exploitation Route | The research has provided a systemic understanding of the connections between supply and demand within a global industry (fashion and clothing) with complex supply chains. The project outcomes has value for further research applied to fashion supply chains and for the management of modern slavery and other issues with these complex networks. Inter-industry workshops completed as part of the research also demonstrated the findings had value for other industry types beyond the original focus area of fashion. Interaction with industry by the project team has demonstrated the value of the research to industry stakeholders, which includes brands, retailers, suppliers, policy makers and civil society. The project outcomes are also valuable for teaching at U/G/PGT/PGR levels. |
| Sectors | Creative Economy,Retail |
| Description | The findings have been presented to industry roundtables to help them understand the challenges that covid has create for extended supply chains. The first round table focused on the finding specific to the fashion industry. The second roundtable consider the application of the findings to other industry seectors. Podcasts have been created that explore some of the research findings from the project to provide industry and others alternative modes for accessing the research findings. |
| First Year Of Impact | 2021 |
| Sector | Creative Economy,Retail |
| Impact Types | Economic |
| Description | Cottons Hidden Voices: Stories from the makers of your clothes |
| Amount | £129,987 (GBP) |
| Funding ID | AH/W006936/1 |
| Organisation | Arts & Humanities Research Council (AHRC) |
| Sector | Public |
| Country | United Kingdom |
| Start | 11/2021 |
| End | 01/2024 |