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01/28/2014

Weighing the Human Element in Fashion Sourcing

Jessica Binns
Senior Editor
Jessica Binns profile picture
The world of fashion sourcing is full of nuances and complexities that are only exacerbated by the "naive popular view" held by consumers enraged by high-profile disasters such as the catastrophic fires and building collapse that have rocked Karachi and Dhaka and killed scores of workers, according to Fashion Institute of Technology professor Guillermo Jimenez.

"When we hear about a fire in a factory and rugs being sewn by 11-year-old boys and girls, we're horrified," said Jimenez, speaking at Benjamin N. Cardozo School of Law's semi-annual Fashion Law Symposium. "And I know people just jump to the assumption that you have to get rid of that factory. There are employers who hit their employees and make them work 80 hours and then don't pay them. This goes on all over the place, and it creates a lot of suspicion of the fashion industry. There are a lot of NGOs out there that just hate fashion sourcing."

The realities of righting the industry's wrongs, of course, are not so straightforward. Factory auditors have to weigh a number of competing factors, especially the human and moral component, when conducting facility inspections. Jimenez pointed to an auditor colleague who in the course of his inspections will intentionally not look directly at a worker who appears to be underage, knowing that calling attention to her will mean she'll be out of a much-needed job.

Many brands today opt for the "dominant philosophy," according to Jimenez, of striving to fix that factories in which improvement seems possible. "It's our moral obligation to overlook some really bad things [in these factories] if we think that in the long run, we can improve," he added.

Separate efforts on worker safety
In the wake of the deadly Bangladesh factory, two divergent approaches to worker safety in that country have sprung up. Because the Europeans' Bangladesh Accord on Fire and Building Safety heavily involved union groups, "most American companies were suspicious," explained Jimenez, and chose to pursue a less stringent way of addressing the core issues in Bangladesh, resulting in the Alliance for Bangladesh Worker Safety.

"When the Worker Rights Consortium took a leadership role in the European Accord, American companies were scared," he noted, and they were particularly concerned that the Accord requires brands to make contractual commitments. "That might sound good to the NGOs but to [brands] it sounds like exposure to lawsuits. They could be guilty of negligence."

Despite the efforts by both European and U.S. companies, Jimenez said there's "broader suspicion" in Bangladesh that these movements are little more than "window dressing" and won't actually do much to help workers in the manufacturing industry. 

Out of China, into Bangladesh
A number of factors have led major apparel brands to move significant volumes of production out of China and into countries such as Bangladesh, the world's second largest clothing producer, according to Mike Medina, vice president of manufacturing for Michael Kors. While cost of labor, which has jumped roughly 65 percent over the past three years might seem like the driving factor, it's really the effects of the one-child social policy that are taking a toll on factories. "Believe it or not, labor is very hard to get and keep and retain in a lot of major Chinese factories," said Medina. "Every year, pre- and post- Chinese New Year, it becomes more and more difficult to get employees back to work.

"What we're seeing as a company firsthand is that the very same suppliers and sourcing vendors that we deal with in China are going to foreign countries like Thailand, Vietnam and now Bangladesh," Medina continued, whose "maiden voyage" to Bangladesh in December 2013 was arranged by a Chinese vendor with whom Michael Kors worked for many years — but no longer could produce in China at competitive prices.

New challenges of auditing
Every country has its own unique set of issues when it comes to compliance and safety, according to Adam Ziedenweber, production coordinator for G-III Apparel Group. "In China everything has been built in the last 10 to 15 years so you have [fewer] issues with structural integrity as opposed to places like Bangladesh where everything was built 50 years ago and the electricity hasn't been checked in 25 years," he explained.

Apparel companies must also consider the cost versus benefit of manufacturing in certain countries — as well as the general perception of operating in that area. Many conscientious brands consider which other companies are producing or have manufactured in the country in the past. "We look at other companies who have been there before," Ziedenweber noted. "No one wants to be the guinea pig in a new country. No one wants to go to Myanmar just yet."

Debate still rages on over the best approach to auditing: using an internal team or hiring an independent third party. Ziedenweber said G-III maintains its own internal group, with the philosophy that "the more you can trust your team, the better the results are."

There also are "cultural" advantages to operating with an internal auditing team: third-party auditors have no real relationship and history with the factories they inspect. "They don't understand what you're facing as a company, the issues you faced in the past and what you're doing differently," Ziedenweber explained. 

What's more, the wildly varying range of brands' standards can be challenging for factories to maintain. "If you put yourself in the factory's position, you've got this brand with this high standard over here that wants it this way, and this one wants the fire extinguisher over here," Ziedenweber explained. "You can imagine how confusing it is for a factory that's in it to make garments. Suddenly they have a whole team of people trying to figure out exactly what it is their customers want."

And having to follow the equivalent of federal, state and local guidelines on wages, labor and a host of other issues further complicates the matter, said Medina. "It's not just doing a singular-step audit just on wages, it's making sure every single facet has been kept up to date and making sure records have been kept."