In India, the COVID-19 pandemic and the subsequent lockdown have had a severe impact on the overall economic environment in general and informal workers in particular. Informal workers in the garment supply chain are no exceptions to this. Their conditions were precarious even in the best of the times, and have now further deteriorated due to the stringent lockdowns.
A large number of workers in the garment supply chains suffer from extreme exploitation, restrictions on movements, debt bondage, and poor working conditions. Most of them are informal sector workers and are outside any forms of legal protection.
These workers remain hidden, isolated and endure abject hardships. The production environment in garment supply chain is characterised by rapid pace and low cost, and those are geared to generate export. Such market conditions incentivise factories to employ large numbers of poor, desperate and vulnerable workers.
These workers are mostly unskilled, without formal education or access to alternative livelihood opportunities. Exploitation of informal workers in apparel supply chains remain beneath the radar of monitoring institutions. This is what has allowed the problem to linger.
Anonymity in global supply chain
‘Supply chains’ refer to the network of organisations, individuals and activities that transform raw materials into finished goods and services for consumers. Certain goods are traditionally traded by intermediaries, and therefore inhibit direct interaction between the customer and its supplier. These arm’s-length relationships make it difficult for end users to track the origins of their products.
In an effort to deliver cost savings, buyer meets demands for quick timelines and large orders, and to maximise profits, while suppliers often further outsource and subcontract to save on labour expenses. This outsourcing puts additional barriers between the international buyer and the unknown subcontractor, creating increased social, political, cultural and environmental risks, including violation of national and international labour standards.
At times, difficulties in identifying the indirect suppliers in their supply chains are also reported as the reason for not being able to ensure labour rights compliance. Fixing responsibility and assigning accountability are not possible in such instances.
In a majority of the developing economies, there exists abundance of unskilled labour force that cannot find employment in the formal sectors. Consequently, a large chunk of the labour force is forced to work in the informal sectors. There is a steady increase in the unorganised workforce in the supply chains of informal sector manufacturing, mainly because of subcontracting by large establishments to smaller units, and the shift from the factory to the home based work.
The dismal situation of workers in the supply chains including garment factories, cocoa, coffee, tea, sugar, palm oil, fishing, cotton harvesting, and mining is widely reported and has led to growing public concern.
Garment supply chain in India
The labour-intensive garment sector in India employs millions of workers in thousands of its units spread over different regions of the country. The textile and garment industry plays an important role in India’s economic growth, contributing 4% to the country’s GDP and employing about 45 million workers.
One-fifth of the total garment industry constitutes the organised sector, which focuses mainly on the exports. Over one-fourth of the volume of production of the garment industry goes into export markets, leaving the remaining for domestic consumption.
Even though the export of garments and accessories from India are routed to all corners of the world, the United States, European Union and Canada together account for nearly three-fourth of total exports. Besides China, India is the leading supplier and market for garments.
Labour abuse in garment supply chain
The Indian garment industry is worth USD 2.4 trillion and employs millions of workers worldwide. However, the industry is plagued by severe labour rights abuses.
In countries around the world, factory owners and managers often fire pregnant workers or deny maternity leave, retaliate against workers who join or form unions, force workers to do overtime work or risk losing their job and turn a blind eye when male managers or workers sexually harass female workers.
Factory building collapses and fires are very frequent in garment supply chain production. The Rana Plaza fire tragedy in the Bangladeshi capital of Dhaka is a cruel reminder of such accidents that keep on happening in the garment supply chain.
There are limited incentives for buyers and suppliers to change exploitative labour practices, given the nature of the supply chain. Buyers have almost no visibility on lower levels of the supply chain and therefore little influence over the labour standards.
The governments of garment producing countries worldwide are primarily responsible for working conditions and labour law compliance in factories. In addition to this, global apparel and footwear companies or ‘brands’ that outsource manufacturing outside factories also have a responsibility to ensure that the rights of workers are respected throughout their supply chain.
This is especially important because in the apparel sector, unauthorised subcontracting is a frequent problem. Some of the worst labour abuses occur in such unauthorised subcontracted sites, oblivious from any kind of scrutiny or accountability.
Problems of the industry
The sector is beset with manifold problems such as obsolete technologies, unorganised production system, low productivity, inadequate working capital, conventional product range, weak marketing link, overall stagnation of production and sales and, above all, competition from other sectors.
Contract enforcement in this industry, with suppliers and dealers, depends heavily on personal trust based sometimes on caste connections. There is extensive outsourcing by putting-out of particular processes of operations to other multiple processes and/or single-process small units.
In highly competitive markets, the garment industrial units face difficulties in finding outlets. Further, they frequently encounter challenges with regard to financial reliability of buyers and in securing regular payments from dealers.
The unorganised sector of the industry does not have any marketing system of its own. The bargaining strength is weakened by their total dependence on the middlemen for credit to buy raw material and tools. Since most of them are illiterates or low-level literates, they are unaware of the trends in the market and end up incurring losses.
Moreover, they are not in a strong bargaining position with regard to the price of the output. They have to sell their products to the middlemen at less remunerative prices. Therefore, the only way to survive in the competitive business of garment production is to rely heavily on cheap labour.
On the contrary, the middlemen sell the same output at a much higher rate. Such a position is very often contested by activists who would argue that trade and industry use an existing fallacy of the system to its maximum advantage, rather than rectify socioeconomic ills.
The nexus of the structured oppressions of class, caste and patriarchy is layered and affects the workers in the supply chains of this industry in multiple ways.
According to Grace Carswell, Geert De Neve and Judith Heyer, “Those leaving stagnating agriculture in search of urban jobs are sorted into work graded by skill, insecurity, danger, toxicity or status in caste-related ways. So, for example, Dalit workers in the Tiruppur garment industry are more likely to find themselves in the low-skill dirty dyeing units, and non-Dalits in the skilled tailoring sections.”
The COVID-19 pandemic has reinforced existing structural inequalities within the industry, with workers disproportionately impacted by the economic devastation that is caused.
Campaigning for Transparency
In 2016, Human Rights Watch joined eight international labour rights groups and global unions to advocate for a basic level of transparency in the garment industry. The coalition developed a ‘Transparency Pledge’ for a uniform minimum standard for transparency drawn from industry good practices.
The pledge is a modest starting point for company disclosure. Companies can do far more than what the pledge seeks, for instance by publishing information about where they source cotton and other materials from. The coalition reached out to 72 brands to urge them to align their practices with the Transparency Pledge.
Seventeen leading global apparel and footwear companies have, to date, committed to publishing all of the information sought in the pledge.
Impact of COVID-19 on industry
The pandemic is primarily expected to adversely impact exports, and subsequent negative impact on the domestic markets with both exports as well as domestic sales are expected to fall sharply. The US and EU together constitute approximately 60% of the total apparel exports from India in value terms.
The pandemic has affected the majority of India’s export market, causing order cancellations and deferrals, leading to inventory build-up and expectation of slower realisation of export receivables, necessitating higher working capital requirements.
Apparel exports are expected to decline because of cancellation of orders in the last quarter of the financial year 2019-20. Additionally, domestic consumption is also getting adversely affected because of the pandemic. New store openings have stopped and even domestic stores are facing an inventory build-up.
Further, domestic prices could be negatively impacted if exporters dump their inventories in the domestic market, leading to even reduced margins. This could lead to reduced engagement of casual labour, factory closures and subsequent return of workers to their native places.
Even before the pandemic, this sector had been grappling with profitability issues because of a sharp decline in yarn exports, cheaper imports, and the likes. These issues got further aggravated with the current pandemic-induced crisis.
Impact of COVID-19 on labour
The garment industry is one of the businesses that has been significantly impacted by the COVID-19 pandemic. Because of public health concerns and social distancing measures, work places faced closure. With the closure of garment factories, millions of garment workers were left without a job and in some cases, without payment for work they have already done.
Even before the lockdown was announced, factories in the Tiruppur region in Tamil Nadu were shutting down as orders from western countries were being cancelled. Two nearby villages – Allapuram and Mannapalayam – suffered the most. On 25 March, almost all employment in the two villages ceased.
Allapuram comprises around 230 households with different types of garment work as their main source of income, alongside employment in agriculture and services. Most of the labour force commutes to Tiruppur’s garment factories or works in one of the eight workshops that mushroomed within the village during the last 10 years.
The workshops are an attractive opportunity for women who work as tailors, checkers, and helpers. These jobs disappeared almost overnight.
Mannapalayam, a much bigger village of over 500 households, has more than 30 power loom workshops, several textile businesses, and a sizing mill. These labouring classes are primarily employed as textile workers in the village-based power loom industry. Here too, the looms ceased functioning overnight and all power loom workers, including those doing related work like bale packing, lost their livelihoods.
During the first week of September, workers from a garment factory called Shahi Exports Private Limited Unit 8 in Bengaluru in Karnataka refused to enter the factory following factory management’s announcement that transportation would no longer be provided. Most workers are unable to afford rent in nearby villages, which means that they are unable to report to work if there is no bus.
After workers’ protest, the management decided to discuss the matters with the union representatives of Karnataka Garment Workers Union (KGWU) and find an amicable solution.
The workers further alleged that the financial turmoil also provided an opportunity for certain employers to target shop floors employees where unions had pressed for higher wages and better conditions. Euro Clothing Company in Karnataka retrenched 1300 workers and winded up the unit in recent times. 900 of them were members of a trade union.
Gokaldas, the parent company of this workshop, is Karnataka’s oldest manufacturer, a firm that runs more than 20 factories. But this particular workshop was the only Gokaldas plant with a registered trade union. It used to supply trousers, jackets and T-shirts for the Swedish clothing giant H&M. The management of Gokaldas declined to comment on the closure, but H&M confirmed the same.
The clothing brand further stated that they were having close dialogue with both local and global trade unions as well as the suppliers to help them resolve the conflict.
The way forward
It is high time the industry is reorganised and the producers are extended help to organise themselves within cooperatives, which would enable smallholders to access finance and technologies. This would also facilitate sharing best practices, which in turn, would boost productivity and profits, and reduce poverty.
Efforts should be made towards promoting labour rights, social security, improving health and sanitation, and the overall promotion of adequate standards of living. Government intervention through financial assistance and implementation of various developmental and welfare schemes would help the sector to tide over these disadvantages.
It is also essential to provide enormous support for evolving alternative marketing strategies. Moreover, India has had to adopt innovative practices by upgrading the quality of products in order to sustain and increase its market share in the world community.
Further, it is only expected that as the prevailing crisis has amply manifested the plight of workers in the garment supply chain, the state should come forward and play an active role to mitigate the sufferings. Measures should be initiated to protect livelihoods through various supportive arrangements.
The State is also to ensure maintenance of minimum labour standards in cases where production has continued. Supply chain trails need to be identified in great details and appropriate measures have to be initiated to mitigate the exploitation of workers in each and every stage.
Views expressed are the authors’ own and do not reflect those of the organisations they are employed in.
Featured image: Women garment workers in India | Kathleen McTigue, Flickr
Dr Kingshuk Sarkar is an independent researcher and also works as a labour administrator with the Government of West Bengal. He earlier served as a faculty of the V V Giri National Labour Institute, Noida and NIRD, Hyderabad. He can be contacted at email@example.com.
Dr Helen R Sekar is a Senior Fellow at the V V Giri National Labour Institute, Noida and Coordinator at the National Resource Centre on Child Labour (NRCCL). She may be contacted at firstname.lastname@example.org