News and press releases

Brussels, 12 July 2023 – The European Parliament adopted its position on the proposal for Ecodesign for Sustainable Products Regulation (ESPR). The position is a good step towards more sustainable products. However, social aspects are not covered which is a huge missed opportunity for policy alignment with existing and upcoming Due Diligence legislation. 

The position adopted today by the European Parliament is their answer to the proposal for Ecodesign for Sustainable Products Regulation (hereafter the ‘Ecodesign Regulation´) that puts forward environmental performance requirements for several product categories. The proposed Ecodesign Regulation is building on previous legislation on energy-related products. With this proposed regulation, the scope of the products that are covered has been broadened: this is a very good step, as not only energy-related products need to be produced more sustainably. Especially welcome is the inclusion of the textile sector. One big improvement both by the Council in May 2023 and now today by the European Parliament is the inclusion of a ban on the destruction of unsold goods (starting with textiles and electronics). This is a long awaited and crucial first step in the right direction.  

The proposed Ecodesign Regulation also introduces a so-called Digital Product Passport. This tool will require companies to provide information to recycling facilities and consumers on aspects such as recyclability and environmental performance. Transparency on the social aspects in the production process, such as existence of unions, health & safety or information on wages, were not part of the framework by the Commission proposal, and the Parliament also regrettably failed to introduce it. This is especially problematic for the textile sector, which is known for its labour violations within its supply chains: long over hours, low wages and unsafe factories are well-known problems in the garment industry.

“The products used in the European Union are produced by millions of workers worldwide, and therefore there is no way to speak about sustainable products without addressing their working conditions and human rights,” says May Hylander, Policy and Project Officer at the Fair Trade Advocacy Office (FTAO).  

Missed opportunity to align the Ecodesign Regulation with Due Diligence policies 

Under the Corporate Sustainability Reporting Directive (CSRD), companies are required to report on their sustainability risks and activities to mitigate these. This will also be the reporting tool of the proposed Corporate Sustainability Due Diligence Directive (CSDDD). The fact that the Ecodesign Regulation is not aligning with these other instruments that aim to regulate transparency and sustainability in global value chains is a real missed opportunity. Social aspects of the production process should have been part of the Digital Product Passport to make this information more accessible to workers, producers, consumers and civil society.  

The European Parliament also misses the chance to improve the rights of workers and producers by adopting a holistic approach to sustainability and include socially responsible public procurement and human rights standards the mandatory criteria for green public procurement (for example for textiles). Instead, they stayed with the limit to environmental criteria proposed by the European Commission. Finally, the FTAO welcomes that the European Parliament added that “No later than 4 years after the date of application of this Regulation, the Commission shall consider the inclusion of social sustainability and due diligence requirements within the scope of this Regulation.” Even if it is an important addition, it is too little too late, and the Commission must consider this inclusion as early as possible to not keep leaving out the people making the products. 

For any questions around our work on the Textile sector or Due Diligence legislation, please contact May Hylander at hylander@fairtrade-advocacy.org.

Brussels, 4 July 2023 – As part of the Small But Perfect (SBP) project, we release today the White Paper “Fair Thread: policy recommendations for a sustainable textile industry”. This White Paper, jointly written by the Fair Trade Advocacy Office and Fashion Revolution, including a Needs Analysis of sustainable SMEs done by Bocconi University, aims to tackle inequalities stemming from the current fast fashion model.

It highlights 19 policy recommendations urgently needed to improve livelihoods of millions of workers and farmers in the value chains of EU textile companies and show how these policy changes can also be good for Small and Medium Sized Enterprises (SMEs). 

The White Paper is based on the outcomes of the SBP project. The input for the Paper is taken from two multi-stakeholder Policy Dialogues exploring enablers and blockers for a fair and sustainable textile sector well as thorough research and the learnings from the network of SMEs, business support organizations and policy makers created during the SBP project. 

The Paper covers the topics of:  

• Sustainable Business Models  
• Traceability and Transparency  
• Living Wage and Living Income  
• Unfair Trading Practices   
• Human Rights and Environmental Due Diligence  
• Sustainable Public Procurement 

The White Paper picks up on the momentum at EU level to regulate the industry: last month, the European Parliament recently voted on their position regarding two important policy instruments for improving the fashion industry: the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Strategy for Sustainable and Circular Textile. While this is very welcome  the CSDDD limits the scope to big brands with high turnover and therefore has small prospects of leading to real positive change in the textile and garment industry. At the core of the EU fashion industry – making up 98.8% of all EU fashion businesses in 2022 – are Small and Medium-sized Enterprises (SMEs). SMEs are well placed to drive systemic industry change, and should not be left out of the policy conversation. It is also crucial to improve due diligence in the textile sector as particularly power imbalances between brands and their suppliers (often SMEs) lead to numerous human rights and environmental abuses.  

Garment brands hold buying power over their suppliers. If manufacturers do not agree to specific buying terms, then the brand can choose to switch suppliers at any moment(1). Brands and retailers use this buying power to unilaterally enforce unfavourable purchasing terms. These unfair trading practices (UTPs) include buying at prices below the cost of production, unilateral changes to agreed contracts, late changes in lead times, and cancelling (semi-)produced garments. Afraid to lose future orders, manufacturers tend to not address these (often) illegal practices and absorb the losses instead. This means the factory does not have enough financial space to invest in safe working conditions, sustainable production methods or living wages for its workers.  

At present, the vast majority of fashion brands cannot prove that they are paying their workers a living wage(2). Low wages force people to work excessive overtime to make a living. Working excessive hours in hazardous situations can lead to hand numbness, back problems and eye strain when sewing(3). Respiratory issues, skin disease, burns and even death can occur due to working with toxic chemicals(4). Some workers are forced to skip meals because they cannot afford food for their families(5).  

Voluntary initiatives by the industry, such as commercial audits or sustainability platforms, have not been able to fix problems like power imbalances, lack of transparency and dangerously low wages. Companies that do want to take responsibility and produce sustainably are faced with unfair competition from brands that do not consider the environment or human rights in their supply chain.  

SMEs are particularly exposed to these challenges, both as brands having to compete with big fast fashion companies, and as manufacturers being faced with Unfair Trading Practices from their buyers. These challenges have not been taken sufficiently into account in upcoming EU legislation  

In the SMEs Needs Analysis in the Annex it is described in more detail what regulatory changes SMEs need as well as how current legislative proposals should look to work for SMEs. In order to support European circular and sustainable SMEs in fashion, customised policies are necessary, as well as a customised approach in the implementation of regulations. As highlighted in the Annex, customised approaches could be related to availability of dedicated incentives, adapted timing of implementation depending on the company size, availability of dedicated training for reskilling and upskilling, availability of specific toolkits dedicated to SMEs to reduce complexity. 

Read the full paper here. 

For any questions around our work on the Textile sector or Due Diligence legislation, please contact May Hylander at hylander@fairtrade-advocacy.org.  

References: 

1. Out of the Shadows: a spotlight on exploitation in the fashion industry, Clean Clothes Campaign (2020), p. 3. 
2. Tailored Wages: the state of play in the global garment industry, Clean Clothes Campaign (2019). 
3. Annie Delaney, Rosaria Burchielli and Tim Connor, Positioning women homeworkers in a global footwear production network: how can homeworkers improve agency, influence and claim rights? (2015) 57:4 Journal of Industrial Relations 641. 
4. Petr Bengsten and Danwatch, Toxic chemicals used for leather production poisoning India’s tannery workers, The Ecologist (2012). Available at: https://theecologist.org/2012/oct/26/toxic-chemicals-used-leather-production-poisoning-indias-tannery-workers 
5. Penelope Kyritsis, Genevieve LeBaron and Scott Nova, Hunger in the Apparel Supply Chain: Survey findings on workers’ access to nutrition during Covid-19, Worker Rights Consortium (2021). 

Brussels, 26th June 2023 – The Fair Trade movement welcomes the introduction of a New Agenda for Relations between the EU and Latin America and the Caribbean and the fact that the agenda for relations between the EU and Latin America Caribbean (LAC) region has a strong multilateral approach for cooperation and engagement. As well as the fact that a European External Action Service is involved in the process and its implementation. 

However, the Fair Trade movement regrets the lack of reference by the EU to the need to address the root causes of systemic issues linked to sustainability in LAC countries, and the responsibilities deriving for the EU thereof. There is need of a wider vision to address the root causes of the spillover effects embedded in the EU trade policy. 

Continue to read the full joint reaction (in English and Spanish) here.

For any inquiries, please contact Virginia Enssle at enssle@fairtrade-advocacy.org

Brussels, 19th June 2023 – The Fair Trade Advocacy Office (FTAO), in partnership with Fairtrade International (FI) and the World Fair Trade Organization (WFTO), has released today its paper “Transforming the European Green Deal into a Global Green Deal – the role of Fair Trade”. The paper calls on the European Commission to work on transforming the European Green Deal into a Global Green Deal, by repositioning the role of trade and business models. This will decrease the externalities of the existing EU policies, in favour of people and planet all around the globe.

According to the signatories, it is high time to assume responsibility for the impact the European way of life has on other countries and, in particular, on those in the Global South. The ever-continuing EU demand for diverse material resources and a range of manufactured products creates significant negative spillover effects in many producing countries. Notable examples are environmental and biodiversity damages (the EU is responsible of 10% of deforestation), unacceptable working conditions, fatal accidents and a large proportion of outsourced greenhouse gas emissions. It is estimated that 40% of the total EU emissions are generated outside the EU borders in producing goods and services that satisfy EU consumers’ demands. The paper recognizes that the current European Green Deal rightly addresses some of these spillover effects, notably through its approved Carbon Border Adjustment Mechanism (CBAM) and Deforestation Regulation, but that there is an absolute need for more comprehensive and structural measures.

Eric Ponthieu, the FTAO’s Strategy Director, said: “The Fair Trade Movement can draw on decades of experience in establishing social and environmental justice through trade, both regionally and internationally. Promoting Fair Trade and regenerative business models is the best way to ensure more consistency between the European Green Deal and the EU development policy, in line with the Policy Coherence for Sustainable Development.”

The paper draws policy makers’ attention to the fact that the EU cannot afford to disregard global sustainability and the 17 Sustainable Development Goals (SDGs) while addressing climate change. Leida Rijnhout, WFTO Chief Executive, said: “There should be full coherence in terms of adequate policies, objectives, rights and responsibilities between European and non-European countries, hence a Global Green Deal to intertwine the global dimension with the European policies. Fair Trade Enterprises are a powerful driver of system change, they are the building block of a new, sustainable economy”.

The signatories highlight that mainstreaming Fair Trade approaches and FT enterprises in the Global Green Deal can lead to multiple benefits and facilitate the achievement of the 2030 SD Agenda. Sophie Aujean, FI Director Global Advocacy, said: “Smallholder farmers and workers are increasingly under pressure due to the impacts of the climate and inflation crises. The Fair Trade movement not only provides fairer prices to small producers, it also promotes sustainable farming practices, diversification of livelihoods, it supports farmers and cooperatives in adding value to products and it is working with businesses and governments committed to sustainability.”

The FTAO, FI and the WFTO will work together to promote more responsible trade and businesses, sustainable consumption and production patterns as well as social and environmental justice by calling upon the integration of Fair Trade principles and the role of Fair Trade Enterprises into a fully fledged Global Green Deal.

For any inquiries, please contact Eric Ponthieu at ponthieu@fairtrade-advocacy.org

On June 1 2023, the European Parliament voted on an Own-Initiative Procedure (INI) in response to the Textile Strategy. The strategy acknowledges the human aspect of garment production and among other things calls for the European Commission to present legislation to minimise Unfair Trading Practices (UTPs) in the garment sector. This report is an answer to the European Commission strategy for sustainable and circular textiles that was presented March 30 2022. The strategy from the European Commission included some green ambitions but lacked actions on the social aspect of the textile industry, therefore this response from the European Parliament is very welcome.

Social dimension of textile production

The Parliament acknowledged that there cannot be a sustainable and circular textile sector without considering the social dimension of the industry, including a gender perspective. The Parliament highlights the occurrence of labour rights violations in the garment industry, such as unsafe working conditions and lack of living wages. It states that the Corporate Sustainability Due Diligence Directive (CSDDD) alone will not be able to fix these problems (as was suggested in the strategy of the Commission). A point that the Fair Trade Advocacy Office strongly supports, especially given that 99% of the garment sector is comprised of SME’s, that are not covered by the due diligence directive. The Parliament therefore urges the Commission to take additional steps towards addressing human rights in textile supply chains.

Call for legislation to tackle Unfair Trading Practices (UTPs)

The garment- and textile industry is known for its unequal power relationships between garment brands or retailers and their suppliers. This power imbalance creates pressure on garment factories. For example, garment factories might be pressured to offer low prices and make last minute changes or they get orders they cannot refuse and that workers end up paying for through (unpaid) overtime. In its initiative, the Parliament urges the Commission to minimize the problems that result from this.

The Commission is asked to provide an assessment of how to minimise unfair trading practices, including through legislation. A ground-breaking step that the Fair Trade Advocacy Office (FTAO) has pushed for many times. The FTAO is therefore pleased to see the Parliament bringing this to the attention of the Commission. In drafting legislation, the Commission could draw inspiration from the EU Directive 2019/633 on unfair trading practices in the agricultural and food supply chain. The legislation should practice such as last-minute cancellation of orders, unilateral disposition of discounts, last minute order changes and payment later than 60 days.

Transparency and traceability

The Parliament welcomes the initiatives brought forward by the Commission that stimulate transparency and traceability. Through increased transparency consumers are empowered to make sustainable decisions and garment workers know where they can address issues on working conditions when they arise. An important tool to increase transparency is the forthcoming Digital Product Passport (DPP). According to the Parliament this passport should be ‘accurate, complete and up to date’. The report does not elaborate on the details. As the garment industry employs millions of people worldwide, a passport for clothes or textiles would not be complete without information on social aspects. The FTAO therefore strongly encourages policy makers to include information on labour rights and working conditions in the DPP.

Public procurement needs to include social criteria

Public authorities have considerable buying power. Authorities should use this buying power to drive the development towards more sustainable textiles produced with respect of Human Rights. The Parliament acknowledges this and calls for a broader and more effective application of socially responsible and sustainable public procurement criteria for textiles. The Parliament has the potential to take action on this concretely in the frame of the Eco-Design regulation that is being negotiated at the moment.  According to the FTAO, effective application of socially responsible public procurement would also need a revision of the 2014 Directive on Public Procurement to require public buyers to do Human Rights and Environmental Due Diligence and to enable public procurement to be part of the administrative sanctions in the Corporate Sustainability Due Diligence directive.

Next step: action from the European Commission

The initiative was adopted with a big majority of 600 votes, sending a strong signal to the European Commission to take action. Together with other Civil Society Organisation, the Fair Trade Advocacy Office published a response to the own initiative of the Parliament. The FTAO will follow the process closely and hopes that the Commission, together with stakeholders and civil society, will address the above topics through effective legislation promptly. Textile workers have been waiting way too long for living wages and full respect of their human rights.

For any inquiries, please contact May Hylander at hylander@fairtrade-advocacy.org. 

Brussels, May 30 – The adoption of the EU Deforestation Regulation (EUDR) is a major milestone showing the commitment of the European Union to contribute to reducing global deforestation. NGOs have repeatedly indicated the regulation can only be truly effective and achieve its objective, if it is smallholder-inclusive. Now the text is finalized and adopted, effective implementation and enforcement are essential to achieve positive change on the ground and tackle deforestation worldwide.

The annual conference of the Amsterdam Declarations Partnership (ADP), held in London on 10 May 2023, highlighted the urgency to ensure smallholders are included in the fight against deforestation. We commend this interest and focus, however, we still miss the level of action needed to ensure they are effectively supported, in a coordinated way. We believe that the ADP is a key initiative to make it happen. For this reason, we call upon the incoming Belgian Presidency to consider steering urgently the following actions through the partnership:

1. Immediately assess the EUDR impacts on smallholders and their needs for compliance
2. Urgently and significantly scale up support measures empowering smallholders and forest
   communities, especially women, enabling them adequate market access based on fairness and equity
3. Start engaging with all relevant producer countries based on a strategic framework
4. Enable producers, in particular smallholders and forest communities, to earn a living income

Read the full joint letter here.

For any inquiries, please contact Charlotte Vernier at vernier@fairtrade-advocacy.org

Brussels, 1 June 2023 – Today, the European Parliament adopted its position on the Corporate Sustainability Due Diligence Directive (CSDDD). This proposed directive provides a unique chance to enhance business responsibility for human rights and the environment.

The Parliament introduced significant improvements on the proposal from the European Commission, particularly in requiring companies to assess the potential or actual adverse impacts that their purchasing practices and business models may have on human rights and the environment. “This is a significant improvement to the proposed directive for workers and farmers who ultimately pay the price of Unfair Trading Practices (UTPs),” stresses May Hylander, Policy and Project Officer at the Fair Trade Advocacy Office.

The Parliament also improved the Commission’s proposal by recognising the right to a Living Income, alongside the right to a Living Wage. One-third of the food we consume is produced by smallholder farmers – independent economic actors who earn an income rather than receiving a wage. Many of them struggle to earn enough to afford a decent standard of living for their household, let alone adopt more sustainable production practices. “Elevating the recognition of the right to a living income within the CSDDD can prompt companies to closely examine their purchasing practices, making meaningful contributions to lifting smallholder farmers out of poverty” says Catarina Vieira, EU Policy Advisor for Solidaridad.

The importance of engaging meaningfully with stakeholders throughout the due diligence process and the extent to which companies must do so have been widely debated in the Parliament. “In line with the OECD Due Diligence Guidance for Responsible Business Conduct, meaningful stakeholder engagement goes beyond mere consultation. Its purpose is to help businesses understand and address the needs and concerns of affected stakeholders’ effectively, with special consideration for groups most vulnerable to adverse impacts. We welcome that the Parliament followed that approach” emphasises Meri Hyrske-Fischer, Human Rights Advisor for Fairtrade International.

Furthermore, the undersigning organisations appreciate the Parliament’s clarification that disengagement is only to be done as a last resort, taking into account the potential adverse human rights or environmental consequences. Unfortunately, the limitation in the Parliament’s position, where disengagement is only deemed necessary when companies are directly responsible for causing or contributing to harm, contradicts the principles of responsible disengagement outlined in the OECD Guidelines and UNGPs. “In line with international norms, a company should do everything in its power to end or mitigate the adverse impact, and only disengage as a last resort if it lacks the leverage to do so” – Fanny Gauttier, EU Public Affairs Lead at the Rainforest Alliance.

The Parliament’s position is not perfect. It fails to reverse the burden of proof, key to ensuring access to justice for victims, and eliminates the article that outlines the duty of directors in setting up and overseeing a company’s due diligence process. Despite this, the European Parliament possesses a robust mandate for trilogue negotiations. Its position is more closely aligned with the OECD Guidelines and UNGPs and offers a higher likelihood of practical effectiveness.

It is now a shared responsibility of the Parliament, the Commission, and the Council to work towards a compromise that reflects high ambition in advancing the goals of the CSDDD, addressing unintended repercussions and preventing a disproportionate burden of due diligence on less powerful actors in global value chains.

Press contact:

Fair Trade Advocacy Office

May Hylander

Policy and Project Officer

hylander@fairtrade-advocacy.org

Rainforest Alliance

Darla van Hoorn

Manager, Global Media Relations
+31 (0)6 20 09 13 12

dvanhoorn@ra.org

Solidaridad

Bram Verkerke

Press Officer

+31 6 296 01233

bram.verkerke@solidaridadnetwork.org

Fairtrade International

Meri Hyrske-Fischer

Human Rights Advisor,

meri.hyrske-fischer@fairtrade.fi

Brussels, 11 May – After our report documenting unfair trading practices in the European apparel industry, we release today a second, complementary report that looks at fair and responsible purchasing practices put in place by European fashion SMEs, and their barriers in remaining competitive in the current fast fashion industry.  

The report is based on research work – including interviews, surveys and comparative desk analysis – conducted by researchers from the University of Portsmouth. The result is a review of unfair trading practices (UTPs) in textile supply chains, and a case study analysis of emerging best practices in terms of companies that are implementing fair and responsible purchasing practices across a range of areas including: lead times, payment details, prices, discounts, technical specifications, volumes and stock management. 

Despite significant market challenges, especially the fierce competition by big conventional fast fashion brands, many sustainable SMEs (brands and suppliers) are innovating with purchasing practices that begin to shift power dynamics within fashion value chains. The report shows that, if supported, these companies have the potential to be industry front-runners and demonstrate fair purchasing practices that can be replicated and scaled across the whole garment sector. 

The report closes by giving concrete proposals to address power imbalances in garment value chains: 

• Public policy support to help level the playing field for SMEs and social enterprises. Big brands need to be held accountable for unfair purchasing practices in order to allow others to compete. Researchers point to the need to develop a regulatory approach to UTPs in textile at European level, for instance with a EU Directive. 
• Business associations and support for SMEs, as these have a crucial role in building alliances and coalitions that can connect positive dimensions, and shifting away from the current norm that associations representing the garment and apparel sector are frequently dominated by the interests of big businesses. 
• Supply chain transparency, including with the creation of publicly available factory lists accessible also to workers and unions for wider communication and action. 
• Worker-driven social responsibility instead of Corporate Social Responsibility (CSR): human rights protection in corporate supply chains must be worker-driven, enforcement-focused, and based on legally binding commitments that assign responsibility for improving working conditions to the global corporations at the top of the supply chain. 

For any inquiries, please contact May Hylander at hylander@fairtrade-advocacy.org. 

Read the full report here. 

Brussels, 25 April 2023 – The committee on Legal Affairs (JURI) of the European Parliament has voted today on their amendments to define the position of the Parliament on the proposed Corporate Sustainability Due Diligence Directive (CSDDD). This directive has the chance to make business more responsible in terms of human rights and the environment. But to avoid unintended negative consequences and that actors with less power in value chains bear most of the burden of due diligence, some crucial elements need to be improved from the Commission’s proposal. The European Parliament has the opportunity to correct the flaws, and even if the approved report is weaker than the original draft report by the rapporteur, MEP Lara Wolters, it is an important step in the right direction.

We welcome that the JURI committee’s report introduces significant improvements, with regards to the Commission’s proposed directive and the Council’s general approach from December 2022:

• One of the central improvements is that it stipulates that buying companies must assess the potential or actual adverse impact that their purchasing practices may have on human rights and the environment. For workers and farmers in the textile and agricultural industries, where Unfair Trading Practices (UTPS) are particularly prevalent, this is a significant improvement to the proposed directive.
• The JURI committee also improved the Commission’s proposal by including living income, in addition to living wage, as a human right to be respected. A third of the food that we consume is produced by smallholder farmers who often do not earn enough to afford a decent standard of living for their household nor have the means to pay a living wage to their workers. Valuing the right to living income to the same level as living wage in the CSDDD has the potential to urge companies to look more closely at their purchasing practices and contribute to lift smallholder farmers out of poverty.
• We welcome that the JURI report puts meaningful stakeholder engagement in a central place of the due diligence process, and clarifies that it goes beyond mere consultation. Its objective is to help businesses understand and identify effective ways to respond to affected stakeholders’ needs and concerns. Most importantly, in line with the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines, the report highlights that companies should engage in a gender responsive way and pay particular attention to groups that are likely to be the most vulnerable to adverse impacts.
• Last but not least, we welcome that the JURI report expressly states that disengagement should only be used as a last resort and that the potential adverse human rights or environmental impact of disengaging also must be taken into account. Unfortunately, the JURI report limits the responsibility to disengage to instances where the companies either caused or contributed to the harm, which contradicts the logic of responsible disengagement developed in the OECD Guidelines and UNGPs, which state that a company should only disengage if it lacks the leverage to mitigate the adverse impact.

Now it is up to the whole Parliament to show support for this report in plenary. Despite some weak parts, it is a vast improvement over the Commission’s proposal and would give the Parliament a strong mandate of negotiations for the trilogues.

Read the full joint press release here.

Press contact:

Fair Trade Advocacy Office

May Hylander

Policy and Project Officer, hylander@fairtrade-advocacy.org

Rainforest Alliance

Fanny Gauttier

EU Public Affairs Lead, fgauttier@ra.org

Solidaridad

Catarina Vieira

EU Policy Advisor, catarina.vieira@solidaridadnetwork.org

Fairtrade International

Meri Hyrske-Fischer

Human Rights Advisor, meri.hyrske-fischer@fairtrade.fi

Brussels, 18th April – We release today a new report based on field research undertaken by Clean Clothes Campaign (CCC) Europe that demonstrates the existence of unfair trading practices in the European apparel industry.

Based on interviews with suppliers, experts and trade union representatives in six EU member states – Bulgaria, Romania, Croatia, the Czech Republic, Italy and Germany – the report “Fast Fashion Purchasing Practices in the EU. Unfair business relations between fashion brands and suppliers” paints a clear picture of the volatile, risky and unbalanced trade relations between brands and manufacturers.

The research shows a general trend of lowering prices, shortening lead times, increasing order changes, lengthening payment terms, and increasing shares of “hidden” costs, such as the production of initial samples, being shifted to manufacturers. This leaves suppliers in financial trouble, unable to make investments and pay wages.

The report focuses on two major clusters of apparel production in Europe: Italy and Eastern Europe. Brands sourcing from the surveyed manufacturers include ASOS, Metro, MS Mode, Moncler, and the Otto Group. Luxury brands were also included but are not named as requested by research participants.

Urgent solutions are needed to eliminate unfair trading practices from garment supply chains, and the “Fast Fashion Purchasing Practices in the EU” report contains a set of recommendations to that effect.

The Fair Trade Advocacy Office and Clean Clothes Campaign Europe are calling for:

1. The payment of orders within 60 days
2. Prices that cover production costs and guarantee living wages for workers
3. Compensation for changes of orders
4. A clear definition of the terms of risk and ownership of goods

Recommendations also include a call for the European Union to adopt a directive that bans unfair trading practices in the garment sector such as late payments and prices below production costs. Such UTP Directive should also ensure effective enforcement and provide detailed guidance on how brands and retailers can ensure and uphold freedom of association, collective bargaining, and living wages throughout their supply chains.

For any inquiries, please contact May Hylander at hylander@fairtrade-advocacy.org.

Read the full press release here.
Read the full report here.