Cashing in: giant retailers, purchasing practices, and working conditions in the garment industry

This report examines the business practices of giant retailers such as Walmart, Tesco, Carrefour, Lidl, and Aldi. These retailers have a global reach and huge market share in many countries, using their size to dominate suppliers and push them into offering lower prices.The report focuses on the clothing industry, in which the giant retailers are big players, and examines the working conditions of the people who make these clothes.

The report finds that:

• women (the majority of the workforce) and their families absorb the costs as giant retailers push their garment suppliers into agreeing to lower prices, faster turnaround times, and greater uncertainty
• purchasing practices that increase pressure on suppliers mean women workers and their families are subsidising the profits of giant retailers through poor working conditions and terms of employment, and poverty wages

Giant retailers say they are taking steps to resolve the abuses of labour rights throughout their supply chains, but the evidence suggests these steps are not enough, and that the giants’ purchasing practices are making matters worse. The report makes several recommendations for giant retailers and their suppliers, including:

• adopt a code of conduct with labour standards equivalent to or higher than those set out in the Clean Clothes Campaign (CCC) Code of Conduct
• implement, monitor and verify compliance with the code through direct engagement with trade unions and labour rights groups in a credible multi-stakeholder initiative (MSI)
• assess the impact of their purchasing practices on all workers, take steps to remedy the negative impacts, and communicate the results of assessment and remediation to workers throughout the supply chain, their representatives and the public
• set retail prices in a responsible manner – refrain from advertising that creates consumer expectations of unsustainably low prices

Recommendations for governments in countries where garments are made and where they are sold, include:

• ratify, implement and enforce all relevant Conventions of the International Labour Organisation (ILO)
• ensure that concessions made to foreign direct investors allow host countries to regulate their investment and labour markets, and enforce existing labour law
• put in place a legal framework that holds giant retailers to account for workers’ rights violations throughout their supply chains, and gives workers a legal right of redress - this legal mechanism should exist both in countries where the products concerned are sold and in the country where the retailer is headquartered