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Most garment brands operate across borders, leading to corporate structures and supply chains. Besides delivering benefits to companies and society, business activities also generate negative externalities violating social standards. The complex and fragmented nature of the global supply chain makes it difficult for companies to trace the negative social impact of their global operations.
Fair Wear has agreed – in alignment with international guidelines and principles – to minimise these externalities through a so-called smart mix for regulation. A smart mix refers to a regulatory ecosystem that includes traditional forms of business regulation via legislation and judicially-enforced remedies, on one hand, with incentives, information-based and new governance approaches, such as sector-specific multi-stakeholder initiatives, as well as measures to enhance the role of financial actors in encouraging more sustainable business practices.
A louder voice is expressing that the reliance on solely voluntary frameworks to promote business respect for human rights has proven insufficient and ineffective for workers, society and businesses, or translated to our industry: (women) workers, garment and textile brands, factories, civil society organisations and consumers. Fair Wear joins the growing group of organisations that is in favour of a European regulatory framework including mandatory human rights due diligence. A call needed to progress our high ambitions to build back a better garment sector.
Mandatory human rights due diligence (HRDD) can help increase overall compliance with the OECD guidelines and United Nations Guiding Principles (UNGPs) in the garment industry. Regulation can incentivise all actors to play by the rules. However, due diligence according to the OECD guidelines is about having a strategy and procedures in place to identify the root causes of problems, work towards remediation and aim for continuous improvement. Companies need to be equipped to handle these responsibilities in a tailored and practical manner.
Although states are obliged to proactively prevent human rights violations, regulation by law is unlikely to set standards for high quality strategy and procedures as well as provide companies with excellent practical guidance. Implementation of human rights due diligence remains a responsibility of companies themselves. Multi-stakeholder initiatives (MSIs), such as Fair Wear, can provide tailored guidance to companies working in the garment industry to create robust strategies and procedures that allow companies to conduct their HRDD at a high level and take responsibility for their negative externalities. By providing companies the opportunity to properly register their risks and prevention and remediation plans, companies can show that they have taken all due care. Our added value is not limited to ‘How to’ toolkits, but as a multi-stakeholder initiative we set high normative standards and stimulate brands to adopt these norms by providing practical guidelines. The OECD guidelines might mention what risk areas to consider, but Fair Wear can give garment and textile brands genuine practical guidance regarding risk assessment, prevention and remediation.
In relation to social issues in the garment industry, Fair Wear is perfectly positioned as it supports brands on HRDD in all six steps of the OECD guidelines. We guide our brands through every step of the due diligence process with practical guidance and a mirror on their own purchasing practices. This is especially relevant for SMEs which often do not have the resources to fully understand the requirements and implement due diligence strategies and procedures.
Moreover, more companies will be interested in ways to comply with OECD guidelines if a legal obligation is established. This will give us an opportunity to increase our impact beyond our own member base and mainstream training materials, tools and measures to a larger audience. Examples include Fair Wear’s grievance mechanism or the labour minute costing methodology and its tools. By aligning appropriate measures for sector-specific topics in the industry, MSIs and other voluntary initiatives can enable companies to fulfil due care and comply with legislation in a way that truly benefits workers and ensures human rights are protected.
We acknowledge the strength of the smart mix in its full potential and support a movement towards mandatory HRDD. However, we would like to see our ambitions for the new normal in the garment sector covered. To enable the best outcomes of such legislation, we would like to see the following ambitions included:
In addition to any regulation, it is also important to retain focus on other policy instruments at both national and European level, such as: