European Parliament calls the Commission to fix unfair trading practices in the textile sector

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.

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