Memorandum submitted by New Look Retailers
1. INTRODUCTION
New Look is an international fashion retailer
based in the UK. Founded in 1969 in Taunton, Somerset since
then the company has rapidly expanded and now operates across
a chain of over 600 stores internationally. New Look is committed
to engaging with suppliers and factories to understand the human
rights risks throughout its entire supply chain in an effective
and responsible way.
We are grateful for the opportunity to submit
evidence to the Joint Committee on Human Rights and hope our commentary
assists the Committee in its inquiry. For the purposes of this
submission we focus on a brand perspective of the current state
of play regarding the garment industry and its effect on human
rights and the challenges ahead for government and retailers.
2. CHALLENGES WITHIN
THE GARMENT
INDUSTRY
The motivation behind brands taking responsibility
for the impact of the industry on the rights of people along their
supply chain varies widely: from truly caring about the issues
to compliance reasons, to tick boxes and gain recognition. Arguably
motivations for taking responsibility do not matter, what matters
is that action is taken and results are achieved. This submission
therefore focuses on the people in the garment industry
and how the garment industry behaves towards the people in its
supply chain.
Clothing sales in the UK in 2007 accounted
for 12% of all retail sales, UK customers spent nearly £40 billion
on clothes. Broadly speaking, the West consumes what the East
produces, over 95% of the clothing sold on our high streets is
produced outside the UK. Millions of people the world over are
employed by the garment industry, over 15 million in China,
two million in Bangladesh, three million in Turkey, and the wages
they earn support further millions. It is an industry that has
a perceptible effect on the world which means that the behaviour
of retailers has a definite impact on the lives and rights of
millions.
The fashion industry puts pressure on suppliers
in the East to deliver cheaper products faster. Most workers in
the garment industry are on a minimum wage rate, which of course
can be a long way off a living wage. Furthermore as the cost of
living rises in the developing world; the gap between minimum
and living wage is widening. Progress on implementing a living
wage fashion industry supply chains has been very slow. We need
to admit that working conditions can often be poor and working
hours long.
The industry is caught in a vicious circle where:
— governments are less than effective in
establishing reasonable minimum wage levels;
— producers prioritise on-time production,
resulting in long working hours, so as to receive payment;
— retailers are adept at shifting production
between suppliers and countries so as to control costs and preserve
margins.
However amongst these discordant voices there
is a lot of passion and motivation to take action. It stands to
reason that the fashion industry could do more in the way of collaboration
so as to achieve results.
3. NEW LOOK'S
POSITION
In 2008, New Look worked with 339 suppliers
in 29 countries—New Look's products were made in 938 factories
based predominantly in Bangladesh, Cambodia, China, India, Turkey
and Vietnam. An estimated 233,905 people are employed as
part of New Look's supply chain.
As part of New Look's commitment to understanding
the human rights risks throughout its entire supply chain New
Look is an active member of the ETI and engages with a range of
projects to address human rights issues throughout its supply
chain. This year New Look achieved an "Achiever"
rating in all five categories the ETI use to assess companies.
New Look's engagement with ethical trade is
not only outwards, concerned with making changes factories, but
is also reflective: We analyse the effect of purchasing practices
on suppliers and factories and are developing an ethical buying
programme involving members of the buying team as Ethical Champions.
Some of New Look's most progressive projects
have been to bring ethical trade closer to the core strategy of
business success. We have engaged with suppliers and factories
to roll out productivity projects where productivity means working
smarter not harder. New Look has been working with a key supplier
in Bangladesh to introduce a trial line with improved productivity
processes. Productivity went up between by 33% and 50% per month;
total take-home wages for the lowest paid worker increased by
24% for 46% fewer overtime hours. Workers went home two hours
earlier, and the production speed increased. This programme is
being rolled out to other factories in India, Bangladesh, China,
Vietnam and Cambodia. In China, New Look is working with another
key supplier to improve working conditions with the results of
decreased turnover.
4. CHALLENGES
Challenge One: It has been noted that voluntary
labour standards initiatives are insufficient in bringing widespread
change. It also stands to reason that governments should assume
responsibility for legislation and enforcement of laws. Although
the ETI is an arterial route into government, retailers should
seek to engage with government more directly.
Challenge Two: Could forms of business recognition
that exist already be used; for example could Investors in People
be extended to the field of ethical trading?
Challenge Three: the West has exported millions
of jobs and it is now necessary for the West to also export productivity
expertise. We call on retailers and government to join us in working
with suppliers to promote productivity improvements and to share
the gains with workers. We would encourage the government to supplement
these gains through duty incentives. This would allow wages to
rise without triggering price rises in the UK.
Challenge Four: Retailers should to review their
buying practices to identify and correct situations where bad
buying contributes to a situation in which workers are badly paid,
badly treated and work long hours.
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