Source: Fibre2Fashion
March 14, 2012 (Asia)
More and more multinational garment brands and retailers are monitoring supply chains forcing textile units to comply with social and environmental norms. But manufacturers in the South Asian countries targeting a bigger share of the international trade still lack social compliance, says David Horlock of Intertek Testing Services, a firm that provides safety services to the textile industry.
The Hong-Kong-based Vice-President who looks after global inspection and auditing feels the regional export industry is becoming unsustainable. If the Great Industrial Revolution robbed Europe of its natural environment, haphazard industrialisation could spell doom for the ecosystem of East, warns Horlock whose company has partnered with B2B portal fibre2fashion.com to facilitate global sourcing in South Asian countries. He says, it is important for brands to establish the identity of real factories with real machines and real people.
What are the challenges for Western buyers, while sourcing from South-East Asian destinations?
Global retailers need to ask their suppliers four questions: Who are you? Where are you based? What do you make? And (most importantly) can you be trusted? Trust means credentials in terms of product quality, safety, social compliance, and environmental compliance. Organisations have good information on just 15% of their direct suppliers, and therefore, there are reputational risks in international businesses. One needs to know if the direct suppliers are committed to corporate social responsibility, environment, workplace practices and product quality.
The Indian textile and apparel export industry is on a sticky wicket when it comes to fair trade practices. Child labour and bonded labour Issues often come haunting. Are the brands erring in interpreting the social system?
These are not India-specific problems. Much of the developing world, including China, Bangladesh, Thailand, Philippines and Indonesia have similar problems because there are no strong institutions to take charge of enforcement. Hence, there is no one to check exploitation. But over the years, brands have addressed these problems. Working conditions are much better in factories than they were a decade ago. There is an improvement in health & safety, dormitories, toilets, infrastructure, treatment of employees and better wages.
However, a lot is yet to be done by stakeholders like governments, direct importers, employees and the society. While some export-oriented organisations in these destinations lead on compliance because they know that it is the right thing for their business, there are others who do not comply. Increasingly, more businesses are starting to understand that CSR and environmental compliance are going to be the parameters which are here to stay and shall be important if one aspires to capture the wallets of tomorrow's customers.
The Asian nelghbourhood does have a problem of pollution. The Pearl River in the Chinese town of Xlntang In Guangzhou that sends 40% of its jeans production to the US is polluted. Why are the American brands and retailers turning a blind eye to this issue?
More than 300 mills in China had to be shutdown recently for causing pollution. The western world is imposing rules because they have been through this before. It does not want Asia's 4.5 billion population to make the same mistake that it made during the Great Industrial Revolution.
There is a greater urgency to clamp down on pollution. River Thames in UK took 200 years to get better! In Thailand, where I spent my childhood, I saw the inland water ways turning brackish when industrial revolution happened in late 70s. Fortunately, owing to awareness about environment protection, the water has come back to life.
Factories on their part have to ensure that they do their businesses in a responsible way. The issue is about sustainability and keeping the eco-system alive. Only 3% of our water is fresh, 1% of this is available, so we need to protect it. Dyeing mills are potentially high-risk environmental polluters if not managed in a responsible way. Recently, NGOs have begun to focus heavily on irresponsible polluters of waterways and brands and their manufactures will be held accountable.
Labour rights activists have been demanding implementation of Asia Floor Wage to strike parity in wages. Do you see that happening?
It is difficult to talk about parity across destinations owing to variables like geography, food inflation, exchange rate and different livable wages. This will mean different things to different people. The cost of maintenance is different in different countries. Nevertheless, brands and factories are working to strike a right balance.
Shouldn't brands be shouldering the responsibility of compliance by paying well enough to the factories to ensure that wages are taken care of?
Several retailers and brands have begun to monitor their supply chains and are mitigating risks to make everyone accountable. A decade ago, people worked for an existence. Now, they work for a Iifestyle. With social media and the increasing visibility of supply chains, we see economics of the markets at work. If factories do not look after their workers or protect the environment then they are at risk of losing their employees and community raising the red flag.
Economic Times
March 14, 2012 (Asia)
More and more multinational garment brands and retailers are monitoring supply chains forcing textile units to comply with social and environmental norms. But manufacturers in the South Asian countries targeting a bigger share of the international trade still lack social compliance, says David Horlock of Intertek Testing Services, a firm that provides safety services to the textile industry.
The Hong-Kong-based Vice-President who looks after global inspection and auditing feels the regional export industry is becoming unsustainable. If the Great Industrial Revolution robbed Europe of its natural environment, haphazard industrialisation could spell doom for the ecosystem of East, warns Horlock whose company has partnered with B2B portal fibre2fashion.com to facilitate global sourcing in South Asian countries. He says, it is important for brands to establish the identity of real factories with real machines and real people.
What are the challenges for Western buyers, while sourcing from South-East Asian destinations?
Global retailers need to ask their suppliers four questions: Who are you? Where are you based? What do you make? And (most importantly) can you be trusted? Trust means credentials in terms of product quality, safety, social compliance, and environmental compliance. Organisations have good information on just 15% of their direct suppliers, and therefore, there are reputational risks in international businesses. One needs to know if the direct suppliers are committed to corporate social responsibility, environment, workplace practices and product quality.
The Indian textile and apparel export industry is on a sticky wicket when it comes to fair trade practices. Child labour and bonded labour Issues often come haunting. Are the brands erring in interpreting the social system?
These are not India-specific problems. Much of the developing world, including China, Bangladesh, Thailand, Philippines and Indonesia have similar problems because there are no strong institutions to take charge of enforcement. Hence, there is no one to check exploitation. But over the years, brands have addressed these problems. Working conditions are much better in factories than they were a decade ago. There is an improvement in health & safety, dormitories, toilets, infrastructure, treatment of employees and better wages.
However, a lot is yet to be done by stakeholders like governments, direct importers, employees and the society. While some export-oriented organisations in these destinations lead on compliance because they know that it is the right thing for their business, there are others who do not comply. Increasingly, more businesses are starting to understand that CSR and environmental compliance are going to be the parameters which are here to stay and shall be important if one aspires to capture the wallets of tomorrow's customers.
The Asian nelghbourhood does have a problem of pollution. The Pearl River in the Chinese town of Xlntang In Guangzhou that sends 40% of its jeans production to the US is polluted. Why are the American brands and retailers turning a blind eye to this issue?
More than 300 mills in China had to be shutdown recently for causing pollution. The western world is imposing rules because they have been through this before. It does not want Asia's 4.5 billion population to make the same mistake that it made during the Great Industrial Revolution.
There is a greater urgency to clamp down on pollution. River Thames in UK took 200 years to get better! In Thailand, where I spent my childhood, I saw the inland water ways turning brackish when industrial revolution happened in late 70s. Fortunately, owing to awareness about environment protection, the water has come back to life.
Factories on their part have to ensure that they do their businesses in a responsible way. The issue is about sustainability and keeping the eco-system alive. Only 3% of our water is fresh, 1% of this is available, so we need to protect it. Dyeing mills are potentially high-risk environmental polluters if not managed in a responsible way. Recently, NGOs have begun to focus heavily on irresponsible polluters of waterways and brands and their manufactures will be held accountable.
Labour rights activists have been demanding implementation of Asia Floor Wage to strike parity in wages. Do you see that happening?
It is difficult to talk about parity across destinations owing to variables like geography, food inflation, exchange rate and different livable wages. This will mean different things to different people. The cost of maintenance is different in different countries. Nevertheless, brands and factories are working to strike a right balance.
Shouldn't brands be shouldering the responsibility of compliance by paying well enough to the factories to ensure that wages are taken care of?
Several retailers and brands have begun to monitor their supply chains and are mitigating risks to make everyone accountable. A decade ago, people worked for an existence. Now, they work for a Iifestyle. With social media and the increasing visibility of supply chains, we see economics of the markets at work. If factories do not look after their workers or protect the environment then they are at risk of losing their employees and community raising the red flag.
Economic Times
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