1

Beauty and the Beast ‘In all buying, consider first, what condition of existence you cause in the production of what you buy; secondly, whether the sum you have paid is just to the producer, and in due proportion lodged in his hand’ John Ruskin

Email: doug.miller@northumbria.ac.uk

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Inaugural Professorial Lecture Doug Miller Inditex/ITGLWF Professor in Ethical Fashion School of Design University of Northumbria Central Campus East Newcastle upon Tyne NE1 8ST Tel: 00 44 191 243 7360

1 John Ruskin 1997 (1862) Unto This Last and other Writings, Harmondsworth: Penguin.

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So there are 2 prospective Fashion students on a gap year And they decide to go trekking in a petrifying forest– Suddenly as they come into a bit of a clearing they disturb a humungous Beast Panic sets in and they turn tailand sprint - hotly followed by the creature. Suddenly one of them stops running and starts unpacking his trainers from his rucksack. You don’t seriously think you are going to outrun that monster with those do you? Says one to the other No! I’m just going to outrun you!

I am sure many associated with the business of high street

fashion and clothing, in particular its manufacture and sale,

might identify with this little allegory. Some of you will make

up your own minds about the identity of our ‘beast’. A

manufacturer and by definition their country of operation

might point an accusatory finger at China with its 30%

share of a global apparel export market valued at

US$311bn2

2 2006 figure Textile Outlook International 2008 World Textile and Apparel Trade and Production Trends, Issue 134 , London: Textiles Intelligence.March-April 2008,

75% of which is consumed by the US, the EU

and Japan. But China is just a symptom and is now

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struggling itself with factory closures and job losses3

3 Just-Style.com 2008 China loses its competitive edge in clothing 22 July 2008 last accessed 4.11.08 a number of textile mills are said to be in the process of relocating to other countries such as Cambodia and Vietnam. More than 20 footwear factories are said to have relocated to Bangladesh this year alone.

.

Retailers apart from wringing their hands about the current

recession might lament the fickle nature of shoppers buying

patterns in the high street. Some looking to provide more

fundamental answers would want to identify our ‘beast’ with

the processes of globalisation itself, aided and abetted by a

free, rather than fair international trading system and the

buying behaviour of the multinational brand owners and

retailers which dominate the sector. Others would probably

want to blame the competitive forces inherent in the

capitalist system itself. Most certainly in the world of

clothing, whether it is in the fight for retail market share, or

the need to clinch that elusive supply contract, we are left

with the impression that a ‘zero sum game’ or ‘race to the

bottom’ is underway. Indeed looking at the industry

globally, much of the academic and business literature

http://chinaview.wordpress.com/2008/11/09/millions-of-china-migrant-workers-hit-by-factory-closures-and-labor-abuses/ last accessed 12.11.08 Radio Free Asia: Workers Head Home Amid Closures http://www.rfa.org/english/news/china/migrants-11112008090610.html last accessed 13.11.08

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continues to use the language of ‘winners and losers’.4

Competition

‘The efforts of 2 or more parties acting independently to secure the business of a third party by offering the most favourableterms’

Merriam Webster Dictionary

Competition in the clothing business –

that is the effort of two or more parties acting independently

to secure the business of a third party by offering the most

favorable terms5

4International Labour Organisation 2005 Promoting fair globalization in textiles and clothing in a post-MFA environment Report for discussion at the Tripartite Meeting on Promoting Fair Globalization in Textiles and Clothing in a Post-MFA Environment Geneva: ILO.

- has led to rock bottom prices which in

turn has fuelled a throwaway culture in certain segments of

the fashion market.. This not only has a profound impact on

the ability of developing economies to advance, it continues

Cf MFA Forum 2008 Global Apparel Trade Trends Briefing Paper, London: Accountability. http://www.mfa-forum.net/downloads/mfaforum_trade_trends_briefing.pdf last accessed 13.112008 See Annex at end of lecture for current tables on changes in values of exports into the EU and the USA between 2004-7. 5 Merriam-Webster definition

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to fuel our current incapacity to place ourselves on a path

to sustainable production and consumption.

Now these are big questions of international political

economy which, some may say, lie beyond the scope of a

Design School and the Fashion disciplines of Design,

Marketing and Communication here at the University of

Northumbria. I would describe my colleagues in these

disciplines first and foremost as artists and craftspeople,

who are engaging in a quest to develop talent in our

students to capture in visual and material form the

‘perceptual experience of pleasure, meaning or

satisfaction’ – the Beauty part of the lecture title.

As a social scientist/trade union officer coming from the

world of words, analysis, argument, ideology and action

into a Design School, my first impressions are that I have

entered a ‘visual’ world where everything has to look and

feel right, but as I think everyone is aware there is now a

growing consciousness within the fashion community that

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this is now no longer enough. The stream of news stories is

the constant reminder that whatever designs finally find

their way on to the high street there is a backstory and it is

a big one because, as we know, nothing is ever what it

seems. I think ethical fashion is about telling this backstory

– about the relationship between retailing and marketing

models and our patterns of clothing consumption – so

important for management of the world’s resources, about

the impact of clothing manufacture on our environment and

about the lives and working conditions of those workers

who toil to bring designer creations into existence.

In this inaugural lecture I want to try and give you some of

this backstory. Some of you may be familiar with a method

from Swedish worker education methodology 6

6 Sven Lindqvist 1978 Gräv där du står Stockholm:Bonniers

known as

‘Dig where you stand’. I’ve brought along 4 items of

clothing and I thought I would try and dig a bit deeper to

bring out their back story in an to attempt to build an

understanding of the multiple personality disorder of our

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beast, and look at some of the global efforts underway to

deal with this disorder. I will conclude by outlining the ways

in which the School of Design in its research and teaching

efforts here at Northumbria can make a key contribution in

our understanding and hopefully -taming of the beast.

So here we are - 4 staple and popular, if not iconic fashion

items - a pair of jeans, a T shirt, a pair of trainers and a

baseball cap.

Jeans

The single most important garment of all

time…..

John Galliano

These jeans represent a rather tiny portion of the

US$51.6bn global jeans market which is projected to rise to

US$56.2bn)7

7 Just-Style.com 2007 Global market review of denim and jeanswear industries - forecasts to 2014, Aroq.Ltd: Just Style.com

by 2014 - not bad for an item of work clothing

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made of cotton fabric or denim8

• Firstly, it is a labour intensive industry and certainly for

the foreseeable future will continue to remain so.

which of course in the

1950’s was transformed through rock and roll into an iconic

fashion statement. By the 1960’s the market was

dominated by three big brands – Levis, Wrangler in the US

and Lee Coopers in the UK. All three were what we might

call branded manufacturers - that is companies which

manufactured their own brand in factories which they

owned.

Something needs to be said about the peculiarities of

garment manufacture right at the outset here.

• Early production was workshop and home-based and

this format continues today

• These units were at the bottom of the manufacturing

hierarchy at the top of which were obviously the

8 The word comes from the name of a sturdy fabric called serge, originally made in Nîmes, France, hence the term de-nim

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modern factories. It was the small centre and home

based working which attracted the label of sweatshop

at the turn of the 20th

• However it soon became apparent that factories too

were places in which the sweating of labour occurred

Century – New York, Chicago,

East End of London.

• By the end of the first decade of the 20th

• As we know however – governments change and with

that the complexion of labour administration systems

Century in

some quarters at least there is a realisation that to

tame the worst excesses of competition and the race

to the bottom you need strong labour administration –

robust labour law including minimum wage legislation

backed up by factory inspectors and workers were to

be free to enjoy the same right as employers – that is

form collective organisations to defend and advance

decent working conditions at the factory in negotiation

with employers and where necessary their

associations.

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which in turn impacts on the ability of workers to

exercise their fundamental right to freely associate

and engage in collective bargaining.

By the mid 70’s both Levis and Vanity Fair – the owner of

Wrangler had a string of factories across the USA – and

began to build factories in Europe to meet the demand the

owner of the Wrangler brand had begun outsourcing their

production. Some of these factories were unionised and it

must be said bucked the trend in the industry.

From the mid 1970s onwards these companies along with

others in clothing business generally began to look abroad

in search of lower labour costs and greater profit margins.

The process of outsourcing – there from the very beginning

in the business begins to take on an international

dimension.

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This happens in 3 waves: In 1974 the new Agreement on

Textiles and Clothing, otherwise known as the Multi Fibre

Arrangement had attempted to carve up the global clothing

industry by issuing, under quite complicated formulae,

quota on the volume of specific categories of garments

which a country could import from another country. This

was an attempt to protect the US and European market

from exporters in the developing countries. But it actually

was responsible for intensifying the globalisation of the

industry as companies began to invest in countries which

had been allocated quota, but which had no indigenous

textile or garment industry. (cf. Wick 9

9 Wick I 2006 Global Game for Cuffs and Collars The phase-out of the WTO Agreement on Textiles and Clothing aggravates social divisions, Siegburg/Neuwied: Suedwind Institut.

) National

governments in those countries were keen of course to

attract the FDI and created Free Trade or Export

Processing Zones, in which tax concessions were granted

as well as labour laws relaxed.

12

Even the Cold War has a role to play in the migration of

production which incidentally had always been shifting

further south i.e. to the Southern states10 in a process

which had begun during the 30’s in the US. During the

1980s the Reagan administration sought to respond with

aid and trade to counter leftist movements in war torn

Central America and the Caribbean with the so-called

Caribbean Basin Initiative.11

10 K. Wolensky 2003 An industry on wheels in Bender & Greenwald op.cit pp 91-117 11 A. Ross 2003 the Second Anti-Sweatshop Movement in Bender & Greenwald op.cit p. 232 cf also K.Krupat 2003 From War Zone to Free Trade Zone in Ross (ed) No Sweat: Fashion Free Trade and the Rights of Garment Workers, London: Verso pp 51-79

This provided several tariff and

trade benefits to countries wishing to import assembled

garments into the US. So a pattern began to emerge

whereby countries keen to get in on the act would establish

export processing zones in a bid to attract FDI much of

which came from Asian investors. Many of these new

zones were fenced off and had armed security

Figure 1 CBI & CAFTA

13

Source: www.webcamcruise.com

Caribbean Basin Initiative

North American Free Trade Agreement

Source: www. webcamcruise.com

guards and operated under relaxation of the national labour

laws. However, once the U.S. entered into the North

American Free Trade Agreement (NAFTA) in 1994 with

Mexico it became easier for Mexico to export its products to

the U.S. CBI countries had lost their advantage relative

Mexico, a major competitor in industries such as textiles

and apparel, so they sought to increase their own

preferences and achieve "NAFTA parity". Levis and

Wrangler looked to the Maquiladoras or outward

processing factories in Mexico and other Central American

countries. In the expanding European market, Lee Cooper

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could look to the EU outward processing rules – denim

fabric - fabric has generally always been the biggest cost

element in a garment - was exported to countries on the

periphery of the EU - North Africa and Central and Eastern

Europe for assembly and then re-imported tariff free into

the Community.

Trying to map supply chains back at the beginning of this

decade for the ITGLWF was a nightmare – there was a

complete lack of transparency in the sector. You really

needed to be an investigative journalist with an unlimited

travel budget. In a celebrated Guardian article back in 2001

Fran Abrams and James Athill tracked a pair of Lee Cooper

Jeans. 12

12 Abrams Fran & Astill James ‘The Story of the Blues ‘ The Guardian 29 May 2001

Figure 2

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A Global Product

Zip made in Japan

Cotton from BeninDyed and woven in Milan using German indigoBrass rivets made in Italy

Namibian copper and Australian zinc

Thread from Northern IrelandPolyester core from Japan

Assembled

in

Tunisia

Source: Author

By now of course there new kids on the block since the

market for jeans was changing too – with the entry of

discount retailers into market keen to push their own private

labels. Supplier factories sprang up in the newly created

export processing zones throughout Central America, Sub

Saharan Africa and South East Asia – often with Korean or

Taiwanese owners who were themselves on the move in

search of lower wage supplier countries. But by the end of

the Millennium, worker rights in the jeans business had

been become tarnished – with mass sackings of workers

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who had dared to form a union at the Chentex factory in

Nicaragua13, to the shootings of women garment workers

outside the China Garments Factory in Lesotho who had

protested their labour rights.

13 The Struggle at Chentex

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By this time of course we have a highly segmented market

splitting into high and low end niches and catering for a

range of new styles and finishes with their respective

implications for denim quality and manufacturing

processes. A pair of designer jeans can set you back

several hundred pounds and then some. Some of us would

say that was downright beastly but let us go to the other

end of the market and look at these jeans I have here which

I bought for £3 from one of our ethically suspect

supermarkets – purely for educational reasons I might add!

To understand the backstory here - we have to get to grips

with how the sector works.

http://www.hartford-hwp.com/archives/47/index-fdaa.html - last accessed 13.11.08 14

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Networks in the Global Fashion Industry

Rawmaterials Processing Component

Networks Assembly Export Networks

Retail Networks

Logistics

After G. Gereffi 2001

Here the work of Gary Gereffi 15

15 Gerrefi G. (2001) Outsourcing and Changing Patterns of International Competition in the Apparel Commodity Chain, Background Paper For Unido’s World Industrial Development Report 2001.

can help us make sense of

it. To simplify, the global fashion industry can be thought of

in terms of a series of networks beginning upstream with

raw material production which is vital for component - in

this case fabric manufacture , which is then assembled, in

a manufacturing network. The garment will have been

contracted by a retailer or a brand which may rely on an

export network to finally get it to store.

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So let us look at the raw material for jeans (whatever the

price) – cotton. - It is estimated that some 100 million rural

households around the world are involved in cotton

production and the supply industry is worth $32 billion a

year. From a range of perspectives however it is an

industry in crisis. Now here I have to make some

assumptions because until recently there was no

traceability on these jeans – no label tells you the countries

of raw material supply or assembly.

The chances are that if you have a pair of cheap jeans like

these and you bought them last year from one of the major

supermarkets here in the UK, it was made in Bangladesh. I

have to make an educated guess here – the clue is in the

price - more on that later. But where did the cotton come

from? –Until recently, Bangladesh was buying 65 per cent

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of its total annual demand of 2.7 million bales of cotton

from this country - Uzbekistan16.

Figure 3: Map of Uzbekistan

Uzbekistan

Courtesy - 2008 Google Map Data and Geocentre Consulting

NFGIS Europa Technologies 16 T. Webb 2008 Ethical Corporation Special report: Cotton – Supply chains – Corporate action on Uzbeki white gold

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Source: Google Maps

Uzbekistan – one of the many ‘istans’ which asserted their

independence from Russia and which sits in that almost

forgotten, unknown central part of Asia. Well, for me at

least, until the beginning of this year. It is the world’s third

largest cotton producer. To the left you can see the Aral

Sea from which water has been diverted to irrigate the

Uzbek and Turkmenistan cotton fields. The latest Living

Planet Report from the World Wildlife Fund estimates that a

staggering 2,900 litres per cotton shirt and 3.7 per cent of

the global water use in crop production which is the

equivalent of 120 litres of water per person per day17

17 WWF 2008 Living Plant Report, London: Gland: WWF p. 19.

.

Figure 5

21

Courtesy: Unimaps.com

This was the Aral Sea in 1989 and in 2003. So much water

has been diverted that the sea has dried up leaving behind

salt pans littered with the rusting remnants of fishing boats

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and barges that once busily crossed its expanse. But the

fuss earlier this year was not about this but about the

systematic use of child labour by the Uzbek government to

pick cotton during school holidays

So a double unethical whammy at source –, cotton picked

using child labour, its farming causing devastation of the

environment, and we haven’t even started on the issue of

pest control. Non organic cotton consumes 25% of the

world’s insecticides and 10% of the world’s pesticides. The

next part of the chain involves all the processes to turn the

cotton into fabric – ginning, carding, spinning and weaving

and dyeing. It is claimed that all solvents used for dye

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manufacturing are inherently toxic (Snyder 2008; 30) and

that globally wastewater effluent is probably the single

biggest environmental threat in textiles today. These jeans

probably contain on average three quarters of a pound of

chemicals18. High salt loads, toxicity, and lack of oxygen

are all common problems in water where textile factories

are unregulated or under-regulated19

If we turn our attention to the issue of cotton trade we have

to cast our gaze across the pond to Washington’s $18

billion a year in cotton subsidies to its own farmers which

have driven world prices down. It is a combination of this

cotton price deflation and the vigorous marketing of Bt

Cotton - genetically modified cotton seeds which has

arguably had the most devastating human cost of all.

.

20

18Rachel Louise Snyder 2008 Fugitive Denim: A Moving Story of People and Pants in the Borderless world of Global Trade London: WWW Norton p. 73

Since 2005 a staggering 5000 cotton farmers have

19 Snyder op.cit. See also Maquila Solidarity Network 2007 The Journey of a Jean – www.en.maquilasolidarity.org/en/node/677/ last accessed 13.11.08 20 Jessica Long 2007 WTO kills farmers. India free market reforms trigger farmer suicides, Global Research http://www.globalresearch.ca/index.php?context=va&aid=6522 last accessed 13.11.08

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committed suicide in India21

So what is being done about this? Responsible practice on

the part of jeanswear designers has seen the emergence of

ranges in all manner of cuts, styles and shades which use

organic i.e. no pesticide use and fairly traded cotton i.e

ensuring that the farmers are paid a collective premium.

We also now have jeans which are dyed with natural indigo

dye left to whiten in the sun rather than be bleached. All

this comes, of course, with a price, and the companies

trading in the ethical jeans niche from Edun to Nudie to

Kuyichi are upwards of £80 a pair. Kuyichi jeans are

interesting in that they are a member of a Dutch collective

known as Made By.., which has a track and trace facility on

their website.

…..and we wonder why the

WTO trade rounds become so fractious.

22

21 Somini Sengupta 2006 On India’s Farms, a Plague of Suicide New York Times Sept 19th

Now companies may offer organic cotton

jeans in the lower price range but this does not guarantee

fair trade, nor environmentally friendly dyeing nor ethically

22 http://www.made-by.nl/tracktrace.php?lg=en last accessed 8.11.08

25

manufactured product and here is the rub – can we

legitimately certify cotton with any label when it has such a

devastating impact on our water resources as we have

seen with the Aral Sea?

What about the child labour in Uzbekistan? Well, late

September, the Uzbekistan Government finally signed a

decree to implement two recently ratified ILO conventions

regarding child labour and announced that it would not

allow the practice of forced child labour to take place during

the cotton harvest. However there are already unconfirmed

reports coming out from the country that in some regions

children have been brought back into the fields to work this

season.23

23 Sean Ansett By Invitation: Uzbek cotton and forced child labour - is the Government serious?

In all the 9 of the county’s 12 provinces

surveyed, respondents conveyed ‘the increased

desperation and harshness in the 2008 forced labour

campaign," with the use of children aged seven to 11

http://www.ethicalcorp.com/content.asp?contentid=6093 last accessed 23.9.08

26

considered unusual, even by the standards of Soviet

times."

Many large Western companies like Levis, Tesco and Wal-

Mart have already instructed their suppliers in Bangladesh

not to use Uzbek cotton and have invested in traceability

systems to keep track of the supply chain. Guess what –

just this month Uzbekistan has completed a deal with a

trading hub in the United Arab Emirates to sell its cotton in

Asia including Korea, Vietnam and China

24

25

The T shirt is now one of the most universal garments.

Global trade in ‘Tee’s’ was a staggering $US 26 bn in 2006.

. Problem

displaced and the likes of Levis and Tesco are going to

have to be vigilant in sourcing their denimwear from any of

these countries.

The T Shirt

24International Labor Rights Forum 2008 Uzbekistan update: Government still forcing young children to harvest cotton despite pledges to ban the practice, Washington http://www.laborrights.org/files/UzbekCottonNov08.pdf last accessed 14.11.08 25 Just Style.com 2008 UAE: Cotton trading hub to link Uzbekistan with Asia

27

The biggest geographical market continues to be the EU,

which in 2006 imported over 1/3 of all T shirt product in

200626

Networks in the Global Fashion Industry

Rawmaterials Processing Component

Networks Assembly Export Networks

Retail Networks

Logistics

and Turkey (29% of the market share) and

Bangladesh (16%) are the major exporters into the EU,

followed by China and India. In this segment of the market,

world import prices for T shirts have been falling during the

last decade.

So let’s take a look at the assembly part of the production

chain

26 Textiles Intelligence Issue 132 World Trade in T shirts November December 2007 https://www.textilesintelligence.com/tistoi/index.cfm?pageid=3&repid=TISTOI&issueid=132&artid=1357 last accessed 13.9.08

28

and at how the factory price for a T shirt might be made up.

In trade parlance a garment is given an ex factory or freight

on board price, known as the FOB. As this example shows

based on industry figures provided earlier this year from

one UK high street retailer, the FOB price for a standard

unprinted male cotton Tee with fair trade certified cotton

was about £2.00.

Retail Price

£2

FOBFabric

£1.20

Factory overhead inc. profit

Trim

.50p 20p 10p

Tags

Includes. 50p premium for

Fairtrade cotton farmers

Plain cotton T shirt

How the Freight on Board price breaks down

Includes unit labour cost

Figure 10

29

The FOB breaks down into fabric and trim and tags –

usually the main item in the price and a residual amount to

cover profit, overheads and labour costs. Fabric is usually

the main cost item for the manufacturer. Some people

might think that buying a Fairtrade Tee Shirt might tick all

the boxes – a Fairtrade certified cotton Tee would involve a

50p premium. But a quick explainer is necessary here.

Fairtrade is a UK kitemark and is a social labelling initiative

concerned with ensuring that a premium goes down the

supply chain to the original producers (usually a group of

cotton farmers) and that this is ploughed back into the

community. Fairtrade has its origins in agricultural food

produce and was not extended to cotton until 2005. Since

then the growth in Fairtrade cotton products has been

marked. Fairtrade labelled products are assured by FLO –

the Fairtrade Labelling Organisation. Fairtrade is a

significant development in addressing global inequality in

supply chains and actually has some strong North Eastern

30

roots in its links with Traidcraft and Harriet Lamb CBE - its

Executive Director - served her apprenticeship here in the

regional Low Pay Unit. They have recently had to qualify

their kitemark to read Fairtrade certified cotton where it is

used on garments so that at least from their end there is no

intention to confuse the consumer that the fabric made with

the cotton and or the assembly of the garment has

necessarily occurred under ethical working conditions.

Change in Factory Price of Cotton Knit Shirts 1994-2004, By Country

-27.54%Bangladesh-17.80%China-56.88%Nicaragua

-313%Egypt-22.54%Turkey-31.26%Egypt-35.75%Dominican Republic-25.63%Peru

1.08%India-34.71%Guatemala-41.81%Haiti-20.12%Pakistan-25.62%El Salvador-27.39%Mexico-56.63%Honduras

Change in Unit Price2004/1994

Country

Source: Worker Rights Consortium

Time permits us to look at only one of these supply

countries – Bangladesh.

31

Bangladesh has come under the spotlight as it is a major

supply country of the UK supermarkets and those high

street fashion retailers which have trail-blazed the new

trend in low cost clothing. But it is a country in political

turmoil which is not surprising given the extent of abject

poverty there. The last time Bangladeshi workers had a

voice– a total ban on trade union activity has been in place

for the past eighteen months – there had been much

agitation for an increase in wages in the RMG Ready Made

Garments sector – where approximately 2 million women

and men work.

Let us look at what they were able to negotiate back in

2006 - a staggering twelve years after the previous

increase. Table 1 below shows the main grades with

occupational examples and the corresponding wage rates

in Taka.

32

£13.581662.5Assistant operator7

£15.121851Sewing machinist6

£16.702046Junior Cutter5

£18.372250Cutter4

£20.002449Sample Machinist3

£31.363840Mechanic2

£41.985.140Pattern Master1

Monthly Wage in £

Sterling

Monthly Wage in Taka

PositionGrade

Source: Peoples Republic of Bangladesh Government Ministry of Labour and Employment Minimum Wage Ordinance October 22 2006

The last estimate of a living wage – that is a wage which

can cover basic needs and leave an amount of

discretionary income - in Bangladesh, conducted at the

time the new wage rates were being set, arrived at a figure

of 4500 Taka - a trebling of the current starter rate. And

this was before global inflation in food prices. A

recent living wage estimate received now quotes a figure

for a family with 2 dependents at twice this figure. The

latest survey by the International Textile Garment and

33

Leather Workers Federation does not yet have all the

returns from its affiliates in but the first one from the Jute

Makers Union in Bangladesh we can get an idea of just

how tough it is for workers on such low incomes:

According to these figures workers now have to spend half

their daily wage on a Kilo of rice

Now let’s come back to our T shirt. As Christa Weil –

a celebrated vintage clothing specialist once stated

‘A garment’s true value lies not in its label but in its

workmanship’.

Now Christa Weil was referring to the craft of both the

designer and the seamstress/tailor but it would be nice to

think that this was a guiding principle for the industry - I can

see our technicians – all former clothing workers - nodding

27

27 Christa Weil 2006 It’s Vintage, Darling! How to be a Clothes Connoisseur, Kent: Hodder & Stoughton p. 47

34

at this point. Let us take a look at the labour value in a T

shirt. I consulted with Inditex sourcing managers from India

and Bangladesh - to achieve a notional but common target

average of 900 T shirts a day, you would require a

complete assembly line of some 51 workers performing all

line tasks to achieve this sort of target.

Labour inputs on a T shirt sewing line with a daily target of 900 pieces

Stores 4 Cutting (inc. 1 supervisor) 5 Machinists 12 Inspectors 2 Helpers 6 Washing and thread cutting 10Ironing and packing 12

51

Now let us work out using our wage figures for Bangladesh

what the labour value is in each T shirt.

35

Unit Labour Cost of a T Shirt

• Daily Target 900

• Number of Workers 51

• Total labour cost* 4,133 Taka

• Unit Labour Cost 4.59 taka = 4p

*Based on an 8 hour day x 26 working days per month on average

The actual unit labour cost is of course slightly higher since

we have not included other labour inputs such as

administration, and printing into the equation but it doesn’t

take a genius to work out how insignificant an increase in

the retail price is necessary to radically improve the quality

of life of garment assembly workers worldwide. As things

stand currently, we are probably talking in terms of a factor

of 3 to get anywhere near a living wage in many producer

36

countries. So for an average Bangladeshi worker making T

shirts all day, it would take say a 12p increase on the retail

price to radically improve her lot. This is a global scandal.

What can we do about the wage issue in the industry as

exemplified by our T shirt and our jeans in Bangladesh?

During the campaign to increase the national minimum

wage in 2006 the manufacturers in Bangladesh argued to

the buyers – if you would only pay us more we would

oblige. Some member companies of the UK Ethical

Trading Initiative, under pressure from campaign groups

and adverse media publicity finally signaled a readiness to

respond to the requests of the BGMEA. But as with all

these things the devil is in the detail. How do you ensure

that the money gets to the workers, what about a non

unionised factory as is likely to be the case in Bangladesh,

and what if there are a numerous brands sourcing from the

factory? What about issues of equity and liability to charges

of price fixing under EU competition law (Miller & Williams

37

2009). Nothing is currently moving here because of the

current state of emergency in Bangladesh and nervousness

on the part of Bangladeshi manufacturers who are worried

about the impact such a pilot might have on the rest of the

industry. This is a one to watch.

Trainers

Because of the capital intensive nature of athletic footwear

manufacture there is a concentration of production in a

handful of countries: China, Vietnam, Thailand and

Indonesia and the industry is dominated by a handful of

major Taiwanese Official Equipment Manufacturers which

run massive vertically integrated operations. Companies

like Pou Chen and Feng Tay which contract manufacture

and design for all the major global athletic footwear and

fashion brands, have become major multinationals in their

own right. Some of their factory complexes are like small

townships since they need to provide accommodation for

38

the thousands of young predominantly female workers who

come from the rural communities in search of their ‘fortune’

in the industrial zones.

Figure 13. Plan of a Footwear factory

I want to show you this rough plan of a factory complex

outside Jakarta in Indonesia which manufactures for three

major athletic footwear brands. The complex is owned by a

Taiwanese parent company but the site has different

factory units which are all companies in their own right and

which are separately dedicated to each of the three brands

and/or make generic components. Some 43,000 workers

39

including 85% women work here. Although workers have a

contract with the company which owns the site, they are not

permitted to transfer from one section of the complex to

another – obviously to protect brand sensitive design

information. In my discussions with workers here they

reported two different working time regimes in operation,

with strict overtime limits in the case of one brand and

excessive overtime being run in the other. Moreover

workers from the different sheds reported quite different

styles of line management ranging from workers being

forced to stand up from the line if they refused to work

overtime.

In many respects, sports brands –are the epitome of the

so-called ‘New Economy’ - , 28

28 Joseph E. Stiglitz 2003 "The Roaring Nineties - A new history of the world's most prosperous decade," New York: Norton & Co.

which emerged during the

90’s when competitive advantage for industrialised

countries was deemed to lie in the development of brands

and brand identity, product specification and design and

40

marketing. (Klein 2000) The new mantra was – outsource

all other operational areas! The new technology enabled

designs and design changes to be quickly sent down the

pipe to the supplier factory wherever it was in the world.

Supply chains became – to coin Gary Gereffi’s much used

phrase - ‘buyer driven’ 29

There was much different take on corporate social

responsibility at the beginning of this decade than now – it

derived from a business credo which Milton Friedman – the

guru of the Chicago School of monetarist economics – had

so eloquently laid out in his New York Times essay in 1970

and the value chain – denoting

the amount of value added at each point in the chain of

production steepened even further in favour of the brand

owners.

30

ref Friedman - whose own mother had worked as a

seamstress in a backstreet sweatshop31

29 G. Gereffi 1999 30 Milton Friedman 1970 The Social Responsibility of Business is to increase its profits, New York :The New York Times Magazine, September 13. 31 Milton and Rose Friedman Two Lucky People, Memoirs 1999 University of Chicago Press p.18

– had argued that

41

the business of business was …business and that the only

social responsibility which business had was to make a

profit. It took a while for this mantra to be exorcised from

Phil Knight, the CEO of Nike, for it was not until 1998 that

the company announced a radical six-point plan

• introducing in-dependent monitoring,

• raising the minimum working age requirements

• and setting formal targets to improve working

conditions in the company’s overseas contract

factories.

• Nike not only set up a (by industry standards) huge

CSR department

• which reports directly to the CEO

• it also began to work with many of its most vehement

critics.

Corporate social responsibility has become a million dollar

industry but has undergone some painful realisations in the

42

past few years. Suppliers are suffering from audit fatigue –

imagine having 50 HEFCE visits in a year – from different

teams with slightly different requirements and

methodologies! Audit methodologies are themselves

inherently flawed – how can you realistically expect to get

an accurate snapshot of social and industrial relations in a

factory in one or 2 days and get young girls to speak open

and honestly about their experiences to someone who may

ultimately be responsible for an order being pulled… Many

buyers have at least acknowledged that root cause analysis

rather than detecting violations is the way forward and that

analysis at factory level is generally pointing to the need for

mature systems of industrial relations - realisations which

emerged out of the First Anti Sweatshop movement at the

turn of the 20th Century32

32 Commentators had been at pains to distinguish in house factory production where workers could ‘be seen by factory inspectors’ and where they could ‘organise and develop a common understanding’ from what they termed sweated labour, which they described as a system of ‘subcontract, wherein the work is let out to contractors to be done in small shops or homes’ 32 where workers remained isolated and unknown. Certainly the legions of immigrant workers who had streamed into the garment industries of New York and Chicago and the East End of London at the turn of the last century had a tale to tell about ‘sweating’ as it was called – poverty wages, long hours in intolerable working conditions. But this experience was also the lot of the many workers who were now to be found in the many factories which had emerged as part of a new garment industry and it took a series of strikes in the New York Garment industry for a Protocol of Peace signed in New York in 1910 following a strike by the Amalgamated Clothing Workers of America set a pattern for trade union recognition, grievance procedures and a Joint Board of Sanitary Control to police health conditions in the industry, The Protocol won widespread acclaim as a genuine way forward in the industry 32

. These take as their starting point

43

the full recognition of the core ILO conventions of the right

to freely associate i.e. join a trade union and engage in

collective bargaining. One multinational which has taken a

bold step in this direction is the Spanish company Inditex,

making this a core guiding principle in their formal

relationship with the International Textile Garment and

Leather Workers Federation. This post will support this

agreement in two ways – firstly by undertaking an impact

assessment of this international framework agreement

involving a number of academic institutions in key countries

in the company’s supply chain and secondly to oversee the

publication charting the joint efforts of the ITG and the

company to establish a voluntary relief scheme for the

injured and families of the deceased workers in the

Spectrum factory collapse in Bangladesh.

Those beyond the factory gates have for some time now

been pointing to specific buying practices as a root cause

44

of many of the ills in the sector – from online reverse

auctions/tenders/,or unrealistic FOB prices, to narrow lead

times, extended payment schedules and discounts

imposed when specific lines have not sold. Suppliers – at

least those in the UK are beginning to hit back – the Forum

for Private Business has even a set of ‘name and shame’

web-pages where suppliers can anonymously bring to the

public’s attention the latest contractual term imposed by

leading high street retailers – and not just those in the

fashion business33

.

All of this has had a detrimental impact on working

conditions in the global supply chain – how do you manage

an imposed price reduction justified on the basis of an

increased volume in the order – which is a justification

given by a number of UK high street retailers and

discounters in defence of their buying policies. Well - you

squeeze more out of your workers –

33 http://www.fpb.org/page_print.asp?current_id=252

45

Bangalore – workers

run higher levels of overtime if not forced overtime, you

might even have to lock workers in, or move to a wholesale

workforce of casual workers, or delay payment of wages or

decline to pay overtime rates, or subcontract the order to

tiers of production over which you and by definition the

buyer will have very little compliance control all issues

which continue to emerge in audit reports!

And what of our trainers – well - the Sporting Goods

industry does have some frontrunners in CSR – Nike now

being one of the them and social compliance is rated along

with quality, price and delivery in their balanced score card

approach. In fact the major brands see fit to have a

permanent presence in some of major footwear complexes

in China, Vietnam and Indonesia but even a company,

which is as responsive as Nike now is, cannot prevent the

46

strikes over a living wage of the magnitude experienced

earlier this year in Vietnam.

Significantly this year at an important meeting in Hong

Kong where the Playfair campaign - an alliance of trade

unions and NGOs and leading sportswear companies came

together to discuss a route map for going forward on

freedom of association and collective bargaining, living

wage, precarious employment and procedures for

managing job loss in the sector. The first meeting of the

sector working party was to have taken place here in the

School tomorrow but it would appear that the sportswear

47

companies are not ready to cede authority to their world

body to discuss these matters. On a more positive note the

first national meeting where it is hoped sectoral approaches

will be discussed will take place in Indonesia in the New

Year.

Baseball Hat

The company that made this baseball hat was granted sole

rights by the Beijing Olympic Games Organizing Committee

to produce hats with the Olympic insignia and to sell them

to officially designated department stores, initially in Beijing

but later in other mainland cities. As we all know the

Olympics is big business but whereas the International

Olympics Committee has strict criteria which any candidate

city must meet to win the tender to host the Games,

London has been given no central steer as to how it should

demonstrate to the public that Olympics licensed product

will have been made in using sustainable materials and

48

under ethical conditions. Each city is left to its own devices

on this one and campaigners are less than impressed by

London’s plans in this respect. (ref)

Some might say we shouldn’t be unduly concerned but let’s

take a look at what was happening at the Chinese licensee

situated in Shenzen just over the border from Hong Kong.

Adapted from Microsoft World Atlas

Shenzhen became China's first - and ultimately most

successful – special economic zone. With some 5 million

inhabitants Shenzen has the highest population density in

China but many of these are rural migrants

49

Workers – many of whom sleep 8 to a room in the factory

dormitories - were found to be working 13 and half hour

days 7.30 am until 11.30 p.m. 26 days a month – a long

hours culture not unfamiliar to many workers here in the UK

- On average, piece-rate workers were earning around 2.28

(.2 of 1pence) yuan an hour, and those working on an

hourly basis earning around 3.42 yuan (.28 of the 1 pence)

an hour34

34 No Medal for the Olympics

and were being illegally underpaid. Moreover one

of the most surprising discoveries made by the Playfair

researchers was that the company coached its workers on

how to answer inspectors sent by their clients to audit the

factory’s compliance with universally accepted social

standards in line with the Conventions of the International

Labour Organisation. This would come as no surprise to

Alex Harney, author of the recently published China Price,

who has presented a devastating critique of the social

auditing industry there. Having interviewed two Walmart

50

auditors who wished to remain anonymous, she realised

the Catch 22. I quote:

‘If factory managers were honest and complied with all of the ethical standards, their costs would rise and they would lose the retailer’s business. But if they didn’t comply, they would never get the business anyway. Falsification allowed the factories to give Wal-Mart the China Price and the impression of compliance. (2008:198)

But it’s not just China - a compliance officer at Vanity Fair

Corporation estimates that between 50 and 60 per cent of

factories in Vietnam and Bangladesh and about 30-% of

factories in India falsify their records (199)!

So what happened here ….. After outright denial of the

charges made in the Playfair ‘No Medals for the Olympics’

Report in June 2007, the company finally acknowledged

problems in the factory and engaged in remediation efforts,

since other well known buyers apart from the Beijing

Olympics Organising Committee were sourcing from their

factory in Shenzen. In casually looking at the label on the

51

other day I noticed something which I have not seen on the

label of an outsourced garment before – the actual name of

the company which made it!

So what does the School of Design whose mission is to

continue to be the lead international centre for the delivery

of excellence in learning and expertise in design practice in

particular in fashion design, marketing and communication.

If in reality, between 30–80% of the environmental impact

of a product and or service is decided at the design

stage.35

35 Garrette Clark 2006 Evolution of the global sustainable consumption and production policy and the United Nations Environment Programme's (UNEP) supporting activities

, then we as an institution and as a Design School

have a responsibility to ensure that a sustainability agenda

lies at the very heart of what we teach. And time is running

out……………………………..

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VFX-4KJV31H-1&_user=122879&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_version=1&_urlVersion=0&_userid=122879&md5=968f2c9f4b2b8e4e7067161cccd0ffb3 last accessed 11.11.08

52

Source : WWF: Living Planet Report 2008

Sustainability is not just about protection of the environment

and conservation of our resources…in the words of the

Brundtland Commission report 36

36 Bruntland, G (ed) (1987). Our Common Future: The World Commission on Environment and Development, Oxford: Oxford University Press.

on the Environment and

Development it is about meeting the ‘needs of the present

without compromising the needs of future generations’. For

the workers in Uzbekistan, Bangladesh, Indonesia, and

China a failure to meet their needs of the present will most

certainly compromise their ability to meet the needs of their

families in the future. As our students move into the buying

departments of our fashion houses we have a duty to

ensure that they are made aware of the impact that those

53

buying decisions could ultimately have on the lives of the

workers and their families at the end of that supply chain

and to provide them with the critical tools to engage in the

sorts of initiatives which a responsible fashion business

inevitably must consider.

So in concluding I though you might like to know what

happened to the students and the Beast.

Well a few years have passed ………….

Our students managed to escape and having finished their final year, decided to go back to the petrifying forest. On

54

entering they meet an owl who immediately recognises them.

Oh you’re the guys who escaped the Beast – that thing with the trainers – was a hoot!

‘Yeah – what happened to that Beast?’ asks one the students –

Well, he would have had you that day but he had a bad fall before he got to you.

So where is he now?

Well, we all took pity - all the animals in the forest had a bit of a whip round to pay for his medical bills. Last I heard he is still flailing around in there somewhere.

So asks the owl, ‘What became of you two?

I graduated with first class honours degree from Northumbria and am running my own fashion business making garments of hemp and bamboo but its based on a new business model where our workers in India and the Philippines are full partners in the venture.

Oh and I also did well. I applied for a job at a major high street retailer and so impressed them at the interview with my knowledge of the industry that they appointed me second in command in their newly created ethical buying department.

So you can tell the Beast we are not scared of him any more –

‘I will!’ says the owl, ‘but in the meantime see if you can do something about the state of this forest will you!’

55

Annex

Figure 1: % Change in value of exports to US and EU between 2004 and 2007

Winners

Losers

China 73% South Africa -75% Macedonia 56% S. Korea -61% India 45% Dominican Rep. -48% Cambodia 45% Mexico -31% Indonesia 30% Romania -28% Bangladesh 28% Guatemala -25% Pakistan 13% Mauritius -16% Sri Lanka 13% Lesotho -16% Turkey 8% Philippines -12% Morocco 4% El Salvador -12% Honduras -6% Thailand -3% Tunisia -1%

NB: China (including Hong Kong) Source: EUROSTAT and USTIC database SITC Category 84 Source MFA Forum op.cit