Five key takeaways from the OECD Forum on Due Diligence in the Garment & Footwear Sector

By Dr. Rachel Widdis

A few weeks ago, when I had the opportunity to join in the OECD Forum, it was immediately apparent that there is a high level of interest regarding the implementation of due diligence in this sector. Over two days, the Forum brought together supply chain workers’ representatives, companies operating in the sector, international standard setting organisations, and civil society organisations for high level discussions and engagement.

This is a sector which is long within the responsible business conduct searchlight. The question is thus- what lessons have been learned, and what does responsible business leadership look like now as we transition into the era of mandatory human rights due diligence? There was a feeling of urgency in the room, and the expert panels did not skirt around issues in many lively and learning rich discussions around the role and responsibility of brands in addressing and improving conditions in their supply chains.

Amongst the many themes explored at the Forum, these are my five key takeaways.

Buyer Supplier Collaboration is at the top of the list. The impact of purchasing practices was a constant theme, alongside recognition that individual brands are working hard on enhanced measures they can take. Collaboration was linked to supplier capacity building, with companies relating concrete ways in which they incentivise their suppliers, for example, to advance representative worker participation. In such ways, if appropriately implemented, buying companies’ purchasing practices are progressive and can support the realisation of worker participation. The benefits of support include that a brand gains continuity in building longer term relationships, raises its standard of responsible business conduct and leverage, and the supplier retains better business. Buyer supplier collaboration also has a key role to play, alongside governments, in developing methods and management practices which businesses can use to enable living wages in their supply chains.

Secondly, worker participation and representation. Dialogue with rightsholders is a crucial source of reliable information to advance responsible business conduct. For this, supplier management must enable an environment where workers can exercise their rights to freedom of association and collective bargaining. For buying companies in the era of supply chain due diligence, it is a clear expectation that they respect and support these rights, and promote social dialogue with trade unions and worker representatives. For women in particular, representation is a pressing problem in the garment and footwear sector. For example, the high level of vulnerable women workers in these supply chains should be reflected in proportionate levels of women supervisors and meaningful representation, but often is not. One presentation at the Forum showed India and Bangladesh, two key sourcing markets, with high proportions of female workers but levels of female supervisors in single figures.

‘we cannot audit ourselves out of problems in this industry’

Conference Participant

With national legislation mandating human rights due diligence already in force, and the forthcoming EU level framework, a key concern at the Forum was understanding how to conduct effective and appropriate due diligence. Many signalled the urgent need for practical advice for companies, to support them to target and tailor their resources. A solid first step is for companies to start, or extend, mapping their supply chains so as to understand what the risks are, where they are lodged in the chain, and who is potentially or actually impacted. Equally necessary is adapting due diligence to the risks on the ground, as copy and paste due diligence without tailoring to the context will not identify or prevent real risks to people. It requires solid information across stakeholder groups, as well as tracking the progress of due diligence efforts over time to measure effectiveness. Here, progress means that due diligence makes a positive difference to the working conditions of the people within the supply chain.

Fourthly, do Social Audits result in feedback, which when integrated, assists this kind of much needed progress? We heard that buyers and suppliers are locked together in a cycle of concurrent and recurring facility audits, but that it is not a solution to adopt procuring audits as a business model. Further, suppliers often bear the cost of the audits. Equally, co-dependencies in the practice of audits may dampen the effectiveness of scrutiny. As one panellist remarked, ‘we cannot audit ourselves out of problems in this industry’. This is particularly so when, even if audits include worker engagement, there is a lack of trust between those auditing and the workers on the ground. Without trust to yield transparency, it is less likely, for example, that audits will surface incidents of violence and harassment in factories and workplaces. Audit fatigue at production facilities exists alongside lack of remedy fatigue, particularly where workers’ representatives are not included in the design of mitigation measures and remedy. It is a good thing if the time of social audits operating in a regulatory vacuum has passed.

Finally, Risks of Unintended Consequences. Heightened and effective due diligence is positive and much needed, but it is crucial to avoid potential unintended consequences. There are real risks of companies ‘near-shoring’ parts of their supply chains, with related negative consequences on the livelihoods of workers and viability of the factories where these goods are produced. As regulation advances, this means considering the position of producing countries. In a fragile world which holds the potential for more economic and geopolitical crises that intersect with this sector, this was a needed and valuable Forum.

Many additional themes were debated by expert contributors, and more information and guidance is available from the OECD here.

At Article One, we partner with companies in the garment, footwear and other sectors to evolve and strengthen supply chain responsibility programs with the transition to mandatory due diligence. For more info, get in touch with us at hello@articleoneadvisors.com