A recent seminar by The Industry We Want (TIWW), a multi-stakeholder initiative dedicated to driving industry-wide progress on key issues in the garment and footwear sector, highlighted purchasing practices and brought together representatives of three distinct perspectives - suppliers, brands and workers.
When brands receive feedback on their purchasing practices, they often act upon it separately from their suppliers rather than in conversation with them. The seminar posed the question how the stakeholders involved could move away from this siloed approach to strengthen supplier feedback and production through collaborative and communicative processes.
“The TIWW metric allows suppliers to have their voices heard and offers insights into the risks linked to their buyer’s purchasing practices. This can act as a conversation starter and move commercial relationships towards shared responsibility,” explained Olivia Windham Stewart, business and human rights specialist and deputy director of the Responsible Contracting Project, who moderated the session.
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 off by sharing learnings from the Common Framework on Responsible Purchasing Practices (CFRPP) and the Learning and Implementation Community (LIC). He said three lessons emerged when improving purchasing practices, which are all simple ones but he also noted that no one is currently following them.
The first lesson is that different departments in a company need to work together, for example the leaderships teams, commercial and CSR. Currently, they may all have their own approach and not communicate with each other, leading to confusing and potentially opposite instructions at the supplier side.
“If brands want to improve their purchasing practices, all teams need to work collaboratively - they need to understand all the different needs internally. Equally important, suppliers are key to providing feedback and designing solutions together,” said van Bokhorst.
The second lesson is that companies need to understand their own purchasing practices. While multiple departments are involved like design, buying and others, no one has an overview of the different practices or understands their full impact. This part leads to the third lesson, which is to understand and assess how purchasing practices impact suppliers.
Challenges for suppliers
Next, Fatima-Zohra Alaoui, director general of the Association Marocaine des Industries du Textile et de l'Habillement (AMITH) and deputy spokesperson of the Sustainable Terms of Trade Initiative (STTI) shed light on the current challenges for suppliers in Morocco. She said that planning and forecasting of orders is still difficult, especially since Covid, with the order situation being “a rollercoaster ride” with order volumes either peaking or hitting lows.
Second, prices are still a concern and have been down since Covid, which was not the worst. “Rockbottom is still happening,” said Alaoui. Last but not least, workers do not yet feel completely safe to raise concerns; this kind of safe working environment still needs to be provided.
“The well-being of brands is dependent on the well-being of suppliers, which is why we need a joint destiny and to work together to find solutions on the issues we are facing today,” summed up Alaoui.
Suppliers as production partners
From the buyers side, there was Anna Ruechardt, head of impact and responsibility at Hakro, who shed light on the communication of the German workwear provider with its suppliers. For starters, she said that the idea of co-ownership and partnership at eye level is reflected in the company’s terminology; suppliers are not simply suppliers but production partners.
“We do not audit for the sake of auditing, we want to know how we can do better - we as a brand together with our production partners. That’s why we always enter a remediation process together with our production partner immediately after audits,” emphasised Ruechardt.
She also mentioned Hakro’s unique business model, which is not based on fashion that undergoes trends but can work with a constant portfolio. Hence, planning can be done with a long-term view of at least six months ahead. She also stressed that Hakro does not dictate prices or sets target prices but instead, sets prices that are cost-covering together with the partners right from the beginning. She admitted that this requires constant communication, which is difficult, but that it pays off.
Social dialogue is key
Last but not least, Yen Nguyen, country representative and strategic partnership coordinator for Vietnam at Dutch foundation CNV Internationaal and former ILO project coordinator, talked about the barriers that suppliers in Vietnam are facing when they are providing feedback about purchasing practices.
“Social dialogue is needed as a foundation for other improvements to take place. We need to invest in capacity building at trade union level and so that concerns can be raised without fear of retaliation,” stressed Nguyen.
Like Alaoui, she mentioned that a general reduction in prices and orders was a big problem, worsened by inflation and the resulting rise in costs. In terms of feedback, she said that many brands think they did “well enough” when it comes to purchasing practices when they actually did not. Wages remain another area with room for improvement with currently no Vietnamese garment worker managing a living wage without doing overtime.
Potential game changer CSDDD
The participants agreed that the new EU Corporate Sustainability Due Diligence Directive (CSDDD) that was just approved by the European Parliament on Thursday, would help. For van Bokhorst, it would mean that if a company goes below the directive, it would not act responsibly any more. Similarly, Alaoui appreciated that purchasing practices are taken into account. “The responsibility should not be shuffled towards suppliers only,” she said.
For Nguyen, it is a step in lessening the pressure for suppliers. But she also advised to invest in training for workers so that they can represent themselves: “Train the trainers and have them understand the requirements and the roles they have to play. Suppliers can play a more active role rather than waiting for brands to tell them what they can or cannot do,” she concluded.