The buyer-supplier partnership is a bit like a marriage, Alexander Kohnstamm, executive director at the Fair Wear Foundation told the audience at the Sustainable Apparel Coalition’s (SAC) annual meeting in Boston last week. If you’re not in regular communication, small misunderstandings can quickly blow out of proportion, creating larger issues that risk capsizing the entire relationship.
“Maybe do some couples counseling,” he said to chuckles from Liberty Hall at the Revere Hotel Boston Common, steps away from where an infamous confrontation between soldiers and civilians precipitated what would become the mother of divorces: the American Revolution.
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But the power imbalance that leaves suppliers in the global South vulnerable to exploitation from companies in the global North is no laughing matter.
“The thing most of you don’t realize is that brands have a lot more power than manufacturers because money talks,” Kohnstamm said. “This imbalance in power exacerbates the way you behave as a buyer, even when you don’t know it. And it even goes to the level of government. There are governments, important governments, that don’t care to raise minimum wages because they’re afraid that we, as an industry, will move somewhere else.”
It isn’t just brands that frequently tout their collaborative relationships with their suppliers. The associations to which they belong also say they want to seat more manufacturers at the table. But when a reporter asked Mostafiz Uddin, managing director of Denim Expert in Bangladesh, if dialogue between stakeholders was improving, he shook his head.
“No change, no change, no change, no change,” he said before a panel on purchasing practices, a subject that he has been shouting from the rafters since 2017.
When Covid-19 caused panicked brands to rescind their orders en masse, pushing factory owners to the edge of economic insolvency, Uddin spent “month after month” offering his input to influential groups such as the Organisation for Economic Co-operation and Development about improving commercial conditions so this wouldn’t happen again. But when the crisis moved on, so did discussions about payment terms, unilateral discounts and order cancelations, he said.
Uddin said that suppliers are essential to the conversation, whether it has to do with improving workplace safety or achieving climate goals. Yet, more often than not, they’re being told what to do rather than co-owning the responsibility.
“If my buyer asks me to go to the moon, I have to go to the moon,” he said of his company, which is an SAC member. “We quite often talk about collective bargaining between workers and the factory owner, right? We talk about any problem that needs to be discussed and solved. Does the buyer do the same thing? I don’t see that.”
The SAC says it wants to promote the adoption of more responsible purchasing practices as part of its commitment to decent work, one of three pillars in its “evolved” strategic plan that is pivoting toward stoking impact, not just generating measurements.
On the day of the conference, the multistakeholder group, whose roster includes more than 270 members across the industry, including brands, manufacturers, think tanks and NGOs, inked a memorandum of understanding outlining a “strategic collaboration” with the International Apparel Federation (IAF), a consortium of national clothing associations and the suppliers they represent.
The idea, Andrew Martin, executive vice president at the SAC, said over lunch, is to amplify not only manufacturer representation but also their influence, which is more important than simply including their “voice.” With the IAF comprising associations from 40 countries, tapping into that cohesive position made sense, particularly since it makes messaging to policymakers that much stronger.
The IAF, as one of the conveners of the Sustainable Terms of Trade Initiative, has worked with the SAC before, most notably on the latter organization’s Higg Brand and Retailer Module (BRM), which earlier in the year revised its purchasing practices section to create greater alignment with the “joint reference point” known as the Common Framework for Responsible Purchasing Practices.
Commercial terms are just a piece of what the partnership, which is still in its earliest stages, will entail. Tackling audit fatigue will be another banner issue, as will decarbonization. All of this ties into the SAC’s larger approach, Martin said.
“It’s [about] trying to help the industry have shared foundational expectations and performance requirements on social and labor and environmental [topics],” he said. “Because sometimes you can have this same approach and have different expectations as to what’s acceptable. And so you have different priorities across the brands and retailers.”
And the only way to align everything in a “practical” way, Martin said, is to actively include manufacturers.
“If it’s clear what is being asked of a manufacturer, then there’s a much better chance that this manufacturer will actually invest in it—provided the ability is there,” said Matthijs Crietee, secretary general at the IAF, which on Monday signed a framework agreement with Zara owner Inditex in support of more sustainable practices and technologies.
“But if you’re always wondering if your new client is going to ask something totally different, and then another client comes on and says ‘Ahh, I can’t use that system’ or, ‘Actually I don’t need that data, I need [another type of] data,’ that unclear situation really blocks progress,” he said.
Ultimately, the issue isn’t about what questions are or aren’t in the Higg BRM, which is simply an assessment tool, but what actions will create meaningful improvements to responsible purchasing practices, Martin said. It’s equally important, he noted, not to view purchasing practices within a silo, but rather as part of a holistic approach that feeds into other topics the industry cares about, such as circular design and compliance.
“There’s going to be a lot of reliance from brands on actually how the manufacturers design and develop or deliver product,” he said. “And so that relationship is going to be even more important both from delivering circularity as a means of reducing impacts, but also as a means of meeting regulations.”
Crietee quoted a saying from Dutch farmers: “We can’t act green if we’re in the red.” In other words, if purchasing practices aren’t enabling positive supply chain outcomes, then they’re preventing them from happening.
Abhishek Bansal, head of sustainability at Arvind Limited, one of India’s largest textile manufacturers and an SAC member, said that the industry, for all its talk, could do a better job at including suppliers. He praised the trade group’s “collaborative atmosphere,” especially when it comes to rolling out new tools. With matters such as European Union legislation, which is poised to reverberate throughout the supply chain, however, manufacturers are still being shut out.
“I think some of [that] legislation should actually take inputs from the ground realities,” he said. “Otherwise, even if you legislate, we’ll have a gap between what is needed and what is the reality of it.”
If fashion appears to be scrambling to reach its 2030 targets, it’s because it’s not “bringing the solutions collaboratively,” Bansal said. “If it is top-down, then implementation is slow.”
