A recent seminar hosted by The Industry We Want (TIWW), a multi-stakeholder initiative dedicated to driving industry-wide progress on key apparel and footwear issues, shed light on sourcing practices and brought together representatives from three different perspectives – Suppliers, brands and employees.
When brands receive feedback on their purchasing practices, they often respond separately from, and not in conversation with, their suppliers. The seminar raised the question of how the stakeholders involved can overcome this siled approach to empower supplier feedback and production through collaborative and communicative processes.
“The TIWW metric enables suppliers to make their voices heard and provides insight into the risks associated with their clients’ purchasing practices. This can serve as a conversation starter and move trade relations towards shared responsibility,” said Olivia Windham Stewart, Business and Human Rights Expert and Associate Director of the Responsible Contracting Project, who moderated the event.
Three lessons from the CFRPP
Wilco van Bokhorst, lead member of the Multi-Stakeholder Initiative (MSI) Working Group on Responsible Purchasing Practices and Policy and Advocacy Officer of the Fair Wear Foundation, started the seminar by sharing insights from the Common Framework for Responsible Purchasing Practices (CFRPP) and the Learning and Implementation Community (LIC). He said three lessons have emerged in improving purchasing practices, all of which are simple; but also noted that no one is currently following her.
The first lesson is that different departments in a company need to work together, for example management teams, trading and CSR. At present they may each have their own approach and not communicate with each other, leading to confusing and sometimes conflicting instructions for delivery companies.
“If brands want to improve their purchasing practices, all teams need to work together – they need to understand all the different needs internally. It is just as important that the suppliers give feedback and develop solutions together,” says van Bokhorst.
The second lesson is that companies need to understand their own purchasing practices. While multiple departments such as design, purchasing, and others are involved, few have an overview of the various practices or understand their full implications. This leads to the third lesson, which is to understand and evaluate how purchasing practices are affecting supplier operations.
challenges for suppliers
Fatima-Zohra Alaoui, Director General of the Moroccan Association of the Textile and Clothing Industry (AMITH) and Deputy Spokesperson of the Sustainable Terms of Trade Initiative (STTI), then highlighted the current challenges for suppliers in Morocco. She said planning and forecasting orders is still difficult, particularly since Covid, with the order situation being a “roller coaster ride” with order volumes either peaking or bottoming out.
Secondly, prices are still a problem and have fallen since Covid – so the lowest level is currently encountered. Last but not least, workers still did not feel safe enough to raise concerns and complaints; such a safe working environment has yet to be created.
“The well-being of brands depends on the well-being of suppliers. That’s why we need a common goal and we need to work together to find solutions to the problems we face today,” Alaoui concluded.
Suppliers as production partners
On the buyer side, Anna Rüchardt, Head of Impact and Responsibility at Hakro, highlighted the communication between the Schrozberg-based supplier of workwear and its suppliers. First, she said that the idea of co-ownership and partnership on an equal footing is reflected in the company’s terminology: Suppliers are therefore referred to as ‘production partners’.
“We don’t do audits for the sake of audits; we want to know how we can get better – we as a brand together with our production partners. That’s why we always start an improvement process together with our production partners immediately after the audit,” emphasized Rüchardt.
She also referred to Hakro’s unique business model, which is not based on fashion that is subject to trends, but can work with a constant portfolio. This allows long-term planning, at least six months in advance. She also emphasized that Hakro does not dictate prices or set target prices, but sets cost-covering prices together with its partners from the outset. She acknowledged that this requires constant communication, which is difficult but pays off.
Social dialogue is key
Finally, Yen Nguyen, country representative and strategic partnerships coordinator in Vietnam at the Dutch foundation CNV Internationaal and former project coordinator of the ILO, spoke about the obstacles suppliers in Vietnam face when providing feedback on purchasing practices.
“Social dialogue is needed as a basis for further improvements. We need to invest in building capacity at union level and making sure concerns can be raised without fear of repercussions,” Nguyen stressed.
Like Alaoui, she thinks an overall drop in prices and orders is a big problem, compounded by inflation and the resulting rise in costs. Referring to the feedback, she said that many brands think they are “good enough” in terms of their purchasing practices, when in fact they are not. She cited wages as another area for improvement, as Vietnamese garment workers are currently unable to earn a living wage without overtime.
CSDDD as a potential game changer
All participants agreed that the new EU Corporate Sustainability Due Diligence Directive (CSDDD), passed by the European Parliament on Thursday, could be helpful. For van Bokhorst, this means that companies that do not comply with the directive are no longer acting responsibly. Alaoui also welcomed the fact that purchasing practices are taken into account. “The responsibility shouldn’t just be shifted to the suppliers,” she said.
For Nguyen, too, this is a step to ease the pressure on them. But she also advised investing in training workers so they could represent themselves: “Trainers need to be trained so they understand the requirements and the role they have to play. Suppliers can play a more active role instead of waiting for brands to tell them what they can and can’t do,” she summarized.