NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

Why the fashion industry keeps failing to fix labour exploitation

By The Conversation by Kevin B Sobel-Read, Georgia Monaghan
Other·
25 Nov, 2017 08:50 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Worker exploitation is rampant. So why haven't fashion brands cleaned up their acts? Photo / Getty Images

Worker exploitation is rampant. So why haven't fashion brands cleaned up their acts? Photo / Getty Images

Worker exploitation is rampant in the global fashion industry, according to countless investigations, studies and reports. So why haven't fashion brands cleaned up their acts?

Even if brands want to be part of the solution (as they are frequently asked to be) they are hindered by the current legal system. The problem is if brands are to eradicate labour exploitation, they must take more control of their supply chains. But if they take more control over their supply chains, they open themselves up to the risk of tremendous legal liability.

To effect real change in the global fashion industry, the countries where brands are headquartered need to reconsider their legal policies. The existing liability rules need to be amended to incentivise the brands' direct involvement in labour issues in their chains.

A recent report from Oxfam found that garment workers earn as little as 2 per cent of the price of clothing sold in Australia - a A$27 billion (NZ$30b) industry.

Earlier this month, shoppers at a Zara store in Istanbul allegedly found messages in the clothing that garment workers had hidden in protest of unfair wages.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

The messages read "I made this item you are going to buy, but I didn't get paid for it". The Rana Plaza tragedy saw more than 1,000 people killed when a garment factory in Bangladesh collapsed. This occurred more than four years ago.

These are just a few examples from a long list of horrors. But still the problem has not been fixed.

Global value chains

Over the past few decades, the production process for garments (and other things) has evolved and become very complicated. These "global value chains" include all the activities that are necessary to a product's life-cycle - designing, making, selling, and sometimes even recycling.

Advertisement
Advertise with NZME.

When it comes to the relationship between these vast networks of suppliers and the law, there is a connection between responsibility and liability. Generally, a brand is only legally responsible for the actions of suppliers if the brand directly controls that supplier. In a global value chain, most suppliers are typically outside of the brand's direct control.

Like many activist organisations, Oxfam places the onus on Australian fashion brands to improve the labour practices of their subsidiaries and suppliers in developing countries.

For instance, Oxfam calls for brands to implement a "living wage" - a wage that is sufficient for workers to meet their basic needs. Their report estimates that enforcing a living wage will only increase the final product price by 1 per cent. This, they suggest, could be absorbed by the chain in order to keep prices from rising.

The key is this: to ensure individual garment workers receive a living wage, brands would need to exert additional oversight and coordination of their suppliers and subsidiaries. In other words, brands would have to take stronger control not only of their suppliers but also of their suppliers' suppliers, and their suppliers' suppliers' suppliers, and so on.

This is known as chain integration.

Workers make socks at the Shuangjin Knitting & Textile in China. Photo / Getty Images
Workers make socks at the Shuangjin Knitting & Textile in China. Photo / Getty Images

And in fact, in certain respects, brands themselves are also keen to integrate their supply chains but for different reasons. From the brands' perspective, integration can help ensure production efficiency, product quality control and effective management of brand reputation.

In many ways then, activists and the brands want the same thing: greater chain integration.

What then is stopping the brands from doing so? The answer is the legal landscape that risks exposing the brands to colossal liability as a consequence of their efforts.

It is impossible to put an exact number on how much such liability might cost a fashion brand. But by analogy, an Australian court has ordered a domestic company to pay over a million dollars for workplace misconduct that occurred against a single employee.

So one can understand why brands might fear being liable for all the misconduct directed against every overseas worker in their supply chains.

Advertisement
Advertise with NZME.

What will it take to create change?

In this regard, brands are in something of a Catch-22. As the law currently stands (and because brands consequently limit integration), brands are rarely liable when a supplier or subsidiary in their chain commits a wrong.

The problem for brands is that they are likely to lose these legal defences if they proactively take control of their chains. This is true whether the control is for purposes of what they selfishly want (more efficient supply chains) or what activists want (better labour practices).

This dilemma played out following the 2013 Rana Plaza tragedy, when many European brands signed a safety accord that seeks to protect Bangladeshi workers from unsafe working conditions. Some American and Australian fashion brands refused to sign the accord precisely because of the fear of future liability.

Oxfam's estimation of a 1% price increase certainly does not account for the enormously expensive risk of litigation that brands may expose themselves to if they promise a living wage to workers.

To get brands on board with improving their supply chains and stopping worker exploitation, we must first recognise the complex landscape that brands operate in. In the current environment, it is often safer for brands to limit their involvement in labour issues, hiding behind third-party "monitoring" and "audits".

We must instead find ways to transform what are now risks of action into incentives for change. Although it is of course right to seek to hold companies responsible for labour abuses, brands must also not be punished with potential liability where they take control of their chains for the purpose of bettering the lives of workers.

Advertisement
Advertise with NZME.

This article was originally published on The Conversation. Read the original article.

Kevin B Sobel-Read, Lecturer in Law and Anthropologist, University of Newcastle and Georgia Monaghan, Research Assistant, University of Newcastle

Save

    Share this article

Latest from Business

Retail

'Challenging conditions': Luxury retail giant DFS closing Kiwi stores

11 Jul 07:43 AM
Premium
Shares

Market close: 'Green shoots' for Ryman – positive reaction to earnings outlook

11 Jul 06:25 AM
Premium
Retail

Push Gummies halts sales amid creatine content controversy

11 Jul 06:20 AM

Audi offers a sporty spin on city driving with the A3 Sportback and S3 Sportback

sponsored
Advertisement
Advertise with NZME.

Latest from Business

'Challenging conditions': Luxury retail giant DFS closing Kiwi stores

'Challenging conditions': Luxury retail giant DFS closing Kiwi stores

11 Jul 07:43 AM

Duty Free Shoppers is exiting the Oceania market after 30 years.

Premium
Market close: 'Green shoots' for Ryman – positive reaction to earnings outlook

Market close: 'Green shoots' for Ryman – positive reaction to earnings outlook

11 Jul 06:25 AM
Premium
Push Gummies halts sales amid creatine content controversy

Push Gummies halts sales amid creatine content controversy

11 Jul 06:20 AM
Watch: 'My raging backyard river' - North Shore homeowner fears stormwater torrent

Watch: 'My raging backyard river' - North Shore homeowner fears stormwater torrent

11 Jul 06:00 AM
Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP