Fair Wear member brands have their say on Corporate Due Diligence legislation

The European Commission is working on a legislative initiative on due diligence for companies. In the run-up to the publication of this legislative proposal in December, we – together with four of our member brands including Nudie Jeans, Schijvens and Vaude – joined a meeting with members of the European Parliament Working Group on Responsible Business Conduct.

In this meeting, we showcased the perspective from our member brands, most of them small- and medium-sized enterprises (SMEs), on the upcoming Corporate Due Diligence legislation. For the Garment and Textile sector, we believe that a level playing field is crucial for the successful implementation of due diligence legislation. As such, the scope of this law must cover all companies, ensuring that they are held accountable for their due diligence, regardless of size.

Next to large companies, small- and medium-sized companies should be included. Garment companies are mostly small and medium-sized companies and setting the bar at 1000 or more employees would exclude most of the textile industry from the scope of the law. Our members are showing that a business model respecting human rights is a viable one.

As more than 90% of the companies active in the sector are SMEs and about 60% in relative terms, it stresses the need for these categories to be included in the legislation. The need to include SMEs is a simple one: in this sector, brands barely have fully- or partly-owned production locations. They source from third parties. This means that you source from the same countries and even factories, whether you’re a large brand or a small brand. This also means that the risks in supply chains are potentially the same. We’ve also seen this in the tragic events of Rana Plaza or Tazreen. Small and medium-sized companies were also sourcing here.

At Fair Wear, the majority of our member brands are SMEs. A group for which mandatory due diligence is often perceived to increase the financial and administrative burdens of these companies. This leads to the conclusion that the cost of mandatory due diligence will undermine their profitability as well as their level playing field for companies. With Nudie Jeans, Schijvens and Vaude showcasing it in the meeting, our member brands show that, with the right business model and responsible purchasing practices, due diligence is a feasible card to play for this category of companies.

Do you want to learn more about our position? Click here.