UK fashion industry still owes Cambodian garment workers for unpaid wages during the pandemic.

Garment factory workers commute to work in Cambodia | Tang Chhin Sothy/AFP/Getty Images

The people making clothes for the fashion industry suffered greatly during the pandemic. Buyers cancelled thousands of orders when the lockdowns hit, and as shockwaves coursed through the supply chain, factories closed overnight and millions of workers were thrown out of work. They were owed a lot of money when the doors shut. Some particularly brave employees took their complaints of mass wage theft directly to the brands, but still – years later – they haven’t all received their final paycheques.

The mostly women workers of the Wai Full garment factory in Cambodia woke up one morning in 2020 to learn they were penniless: their factory had closed down without paying them their final wages or legal severance pay. They weren’t the only ones. Major fashion brands were pulling orders across Asia and refusing to pay for the piles of clothing that had already been produced. This caused a huge cash flow problem for producers, who adapted by laying off workers, withholding wages, or simply disappearing without settling accounts.

Factory workers making clothes for major fashion brands are estimated to be owed $12 billion in lost income from that first year of the pandemic alone. This invisible injustice, carried out on women already on poverty pay, was simply brushed away when the high street geared up again. New orders came in, but nobody looked back.

Exhaustion as a negotiation tactic

In Autumn 2021, the Cambodian Alliance of Trade Unions (CATU), representing 308 Wai Full workers, started to work on the case with Labour Behind the Label – a UK NGO campaigning for workers’ rights in the fashion industry. We contacted brands who had been sourcing from the factory shortly before it liquidised its assets and closed, leaving workers owed over $500,000.

Voluntary negotiations with four big fashion brands ensued. At first things seemed to be going well, and we thought we’d nearly won when the brands asked for a confidential settling figure and started to discuss the logistics of a disbursal fund to workers. But what’s the best way to avoid responsibility? Act like you care while you run the clock. Which is exactly what happened.

"We are dependent on companies’ good will when we go searching for justice, and they have precious little incentive to show mercy"

Negotiations continued for two more years. Workers fought with dignity, arguing again and again that brands must step up to their duty and pay. Two of the four brands eventually made some contribution towards the workers as a concession. The other two, however, backed out. They said they had paid for their orders and what happened next wasn’t their problem.

Negotiations broke down. With no regulator to independently assess or adjudicate supply chain justice, and with no law criminalising brands for causing harm, there is nothing to stop brands from acting with impunity. The Wai Full story isn’t an isolated event. Brands regularly offer false hope to human rights groups, unions and workers, feeding them crumbs and wasting their time before in the end turning their backs.

We are dependent on companies’ good will when we go searching for justice, and they have precious little incentive to show mercy. Only stronger regulation could change this. Fashion isn’t unique in this regard, but it does offer a perfectly formed example of how companies brutally undermine the rights of people around the world and walk away with no consequences. It shows us exactly why we need new regulation to hold business to account.

Will the UK regulate to support workers in global supply chains?

Global supply chains are primarily governed by the soft law approach of the UN Guiding Principles on Business and Human Rights. These guidelines say that companies have a duty to respect human rights in their supply chains and provide remedy when their operations cause or contribute to harm to people or the environment. But they are only descriptions of better practice. They are not binding international law.

Thankfully, many EU states are now turning soft law into hard legislation. They are bringing in new mechanisms to hold companies to account for human rights abuses and environmental harms, mandating them to undertake due diligence processes to protect people and the planet. One of the first was the French Duty of Vigilance Law, nicknamed the Rana Plaza Law after the 2013 collapse of a garment factory in Bangladesh that killed 1,100 workers. The Norwegian Transparency Act in 2022 and the German Supply Chain Act in 2023 followed. This June, the European Parliament voted in favour of new legislation that would require EU companies to risk-assess and prevent harm to human rights, the climate and the environment in their global value chains. This is the kind of law making needed to protect workers like the women from Wai Full.

What about the UK? Few believe it will follow suit as long as the Conservatives remain in power, and the scepticism is understandable. But the Tories may yet be convinced by big business. Over 50 companies and investors – including Primark, ASOS, New Look, Oliver Bonas, and Tesco – have signed a statement calling on the government to create a new law on business and human rights. They say that, especially with the EU law on the horizon, it’s important to set a level playing field for businesses in different jurisdictions.

Ordinary people also want it: a YouGov poll showed that four in five Britons want a new law to end the exploitation of people and the environment in supply chains. Labour claims to have this in their sights. Their policy platform for the 2024 manifesto includes a commitment to “examine the best way to prevent environmental harms and human rights abuses in supply chains”. While this is not yet a firm commitment, such legislation is on their radar. So there is reason for hope.

For people and the planet, this kind of baseline corporate accountability is urgent and pressing. It might not sound sexy, but it is how we keep tabs on corporate abuse around the world and bring offenders to justice. Covid showed clearly how big fashion brands can make choices that devastate the lives of millions of women, causing mass job losses and billions of dollars in unpaid wages, with zero consequence. The just transition that we need, which puts affected people and the planet at the centre, is only possible when the building blocks of justice are in place. We need mechanisms that hold companies accountable for their impact, and that require business to act with respect and care in the future world. We need these new laws, and more of them.

The Wai Full workers recouped some of their money only because two brands did the right thing voluntarily. The other two walked away without consequence. This kind of incomplete justice will continue to get visited on the lowest paid in supply chains until there is some way for worker movements to regulate the actions of big fashion brands under the law, and get the justice they are owed.

We stand in solidarity and hope.

Original Contents by Open Democracy