Global denim industry faces lack of buyer accountability

A latest global report revealed a lack of buyer accountability and other unethical behaviours in the global denim industry.

The Ethical Denim Council (EDC), a US-based non-profit organisation, published the report titled '2024 State of the Denim Industry, an Unchanging Landscape of Change' this week, also stressing the need for systemic reform within the denim supply chain.

Built on last year's exploration of suppliers' struggle, the second edition of EDC's report expands its focus to include the perspectives and challenges of more than 1,500 factory workers in Bangladesh and Pakistan, 49 consumers and seven brand employees.

Though all groups expressed strong support for ethical practices, EDC found significant gaps in how these values are consistently applied to daily business operations.

The report highlights four key themes-awareness of buying practices, accountability of buyers, impact on workers and collaboration to create a fairer industry.

According to the report, factory workers and consumers are pushing for clearer, enforceable rules that hold brands accountable for their purchasing practices.

While progress is being made in consumer awareness and advocacy for ethical practices, the challenge remains in translating these values into consistent, industry-wide standards that protect workers and ensure fairness across the supply chain, it added.

The survey found significant differences in awareness across the groups.

Factory workers in Bangladesh demonstrated a high level of awareness, with 100 per cent understanding of supplier requirements while the same is much lower for Pakistan workers with nearly 58 per cent of factory workers being unaware.

Most workers in both countries believe brands should be held accountable for orders when the "go-ahead" has been given, but brand employees are split across the issue, according to the report.

Cancellations are a cause of concern for factory workers and the survey found that 66 per cent of workers in Bangladesh and 50.4 per cent in Pakistan agreed that cancellations put workers at risk.

Though these regional differences suggest that factors such as workplace conditions, economic pressures, or operational stability might shape how risks are perceived, EDC said supplier data suggests that these disruptions can lead to adverse outcomes for workers.

"Across both countries, the findings emphasise the need for a deeper understanding of how such risks are managed within factories and the ripple effects of order disruptions on worker welfare. Addressing these challenges requires greater transparency and systems that mitigate the impacts of cancellations and other unethical practices," read the report.

"The majority workers in Bangladesh and Pakistan believe the industry should unite to stop unfair buyer requests."

Brand employees, however, view buyer requests differently and the survey found that most take pride in their company's operations and expect a degree of flexibility from suppliers.

The report stated that 4 out of 6 brand employees believe their company expects suppliers to accept purchase order changes as part of normal business operations.

The disparity between brand values and operational reality underscores the challenges in translating ethical ideals into concrete actions, EDC said.

The report also found consumers who want to shop ethically as 55.1 per cent of consumers said it was extremely unlikely they would purchase from a fashion brand that uses unethical purchasing practices.

However, the affordability of ethical and sustainable fashion continues to challenge consumers-even those who express a strong interest in ethical practices, it added.

The survey found that 71.4 per cent of consumers are not aware of buying practices like cancellation policies and 53.1 per cent are not aware of brands and retailers' rules of engagement with suppliers. However, 77.6 per cent of consumers agreed that buyers should honour payment terms even for canceled orders.

It also found that consumers are not fully aware of the ins and outs of garment manufacturing, signaling potential opportunities for increased transparency and education in the industry.

The EDC also outlined how it plans to confront ethical challenges, beginning with gaining support for the Non-Cancellation Compliance Clause developed with the Responsible Contracting Project.

The clause aims to protect suppliers from the financial instability caused by order cancellations and changes.

The council is also preparing for a conference for brands, suppliers, workers, advocates and government officials to discuss actionable solutions and policies.

"Listening to those whose livelihoods are directly impacted by unethical practices within the denim industry is critical to driving meaningful change," the EDC said, adding engaging workers and suppliers in this process ensures that the changes pursue are effective and address the root causes of these issues.

According to data compiled by BGMEA based on eurostat, Bangladesh fetched US$571.99 million from denim products shipments to EU during January to June period of 2024 marking a 5.29 per cent growth over the corresponding period of 2023.

Turkey and Pakistan are second and third largest denim exporters to EU.

Bangladesh's denim exports to US during the first half of 2024 earned US$281.70 million, according to OTEXA data.

Mexico, second largest denim exporter to US, recorded 4.92 per cent decline during the period to fetch US$297.64 million while Pakistan, third largest, marked an 11.99 per cent growth to the USA and earned US$184.73 million during January to June period of 2024.

munni fe@yahoo.com