Fair Trade, data from the report on the protection of EU textile workers

If you are buying a branded dress at a not too low price, think for a moment about the road it has come. And if once the answer would have led to distant Asia, to obscure Third World factories where trade union rights do not exist and even less environmental standards, today the answer comes above all from the Balkans.

The textile road is the story of the latest Report “Fast fashion purchasing practices in the European Union”, just published by the Fair Trade Advocacy Office (FTAO) and based on field research conducted by the Clean Clothes Campaign (CCC) . Based on interviews with suppliers, experts and trade union representatives in six EU Member States, the Report gives a clear overview of the volatile, risky and unbalanced commercial relationships between brands and manufacturers also in the garment manufacturing sector. The Report will be presented and discussed on 25 April at an event at the European Parliament, hosted by MEPs Delara Burkhardt and Saskia Bricmont.

It is a one-way relationship between big brands and very small suppliers. «The contract with Moncler – said one interviewee – was like a book, that is, they protected their brand so much that if they thought they had lost a piece, you could find yourself offering compensation enough to go bankrupt».

“Brands want very fast and very cheap products”: this is the emblematic phrase of a Bulgarian executive of a clothing manufacturing company. It tells of small and fast orders, at low cost, with extremely short delivery times (sometimes 2 weeks) under very uncertain trading conditions.

Shipments are usually made by road trucks and unlike ships and containers, they can deliver the finished products to the shops in a matter of days. Furthermore, there are no customs duties either internally or externally, as the EU has concluded free trade agreements with most of its neighboring countries.

“European clothing production – reads the Report – benefits from the geographical proximity to the brand headquarters and retail markets and benefits from long-established know-how and equally consolidated production experience”.

At the same time, brands benefit from cheap labor in Europe itself. «The volatility and flexibility of orders placed in countries such as Bulgaria, Romania, Croatia or the Czech Republic are facilitated by an EU production and trade system introduced in the 1970s: the outward processing regime (TPP). This means that the fabrics, mostly pre-cut, are delivered to neighboring countries with low labor costs, where the sewing and finishing operations are carried out, to then be re-imported free of customs duties. Apparel supply chains within a TPP arrangement are characterized by particularly unbalanced relationships of power and influence, with little prospect of escaping this role and improving. The PPT therefore creates regional clusters of poverty, cover-up, fear and informality.”

And this mechanism also survives in Italy, which for decades has had legions of “contractors” working in homes and back shops. An Italian supplier told Fair Trade researchers that «the contracts proposed by the brands never provide for a commitment on the quantities to be produced or even a commitment on prices. Contracts for brands consist in saying that the supplier must respect quality and delivery times because if he doesn’t do so, penalties will be triggered. Safeguard clauses are never inserted to protect the interests of the supplier”.

And things are getting worse. The research highlighted a general trend towards lower prices, shorter delivery times, increased order changes, lengthened payment terms and an increase in “hidden” costs, such as the production of initial samples, all of which are transferred to the producers. Obviously this puts suppliers in progressive difficulty, who are unable to make investments and sometimes even to pay salaries.

In some cases, suppliers accept low prices just to maintain the relationship or to survive, sometimes without making any profit. Also, when you are heavily dependent on only one buyer, the risk of failure is very high. The Orljava factory in Croatia was forced to close when German brand Olymp withdrew orders in 2020.

In the conclusions, the Report launches an appeal to the European Union to arrive at a directive that prohibits unfair commercial practices in the clothing sector, such as late payments or prices below production costs, guarantees effective enforcement of the legislation, provides detailed guidance on how brands and retailers can ensure and uphold freedom of association, collective bargaining and decent wages along their supply chains. Payment for orders is requested within 60 days; prices that cover production costs and guarantee decent wages for workers; compensation for order changes; a clear definition of the terms of risk and ownership of the assets. And this is the moral: the protection of workers’ rights passes through the protection of the entire production chain, including small owners.