Labour abuses in supply chains uncovered. Leather and leather shoes from India

17 April 2023

The leather and leather goods industry in India makes a substantial contribution to global demands for leather and leather goods, as well as contributing a decent share to the country’s Gross Domestic Product (GDP). In 2019, Indian leather exports totalled about 5.5 billion USD and helped to employ nearly 4.42 million formal workers. All stages of leather production take place in India – from larger export tanneries and factories manufacturing leather goods to smaller workshops and home-based workers stitching leather uppers for shoes by hand. The sector is often
associated with poor working conditions, such as low wages, long working hours, health and safety issues, informal employment relationships and challenges when it comes to freedom of association.

New information about the working conditions in India, Bangladesh and Pakistan was gathered for the Together for Decent Leather programme. Three field studies were carried out in each of these countries. In this briefing paper, we provide an overview of the study’s main findings about the working conditions of leather workers in the state of Tamil Nadu in India. This summary is based on the full field study report published under the umbrella of Together for Decent Leather. The full report can be found here.

Download the report here

Socially responsible public procurement of workwear with leather

31 March 2023

The Dutch government is a major consumer of workwear, including workwear-with-leather. Annually, millions of euros are spent, from army boots to belts, from representative pumps to welding gloves. The information in this publication is intended for everyone involved in the central and decentralised public procurement of industrial clothing, especially clothing and footwear made entirely or partly of leather. We provide information on the risks in the production of these items, and present tools to make the procurement of workwear-with-leather more sustainable.

Please note that this publication is in Dutch.

Please download the publication here.

SOMO

Unsafe and Underpaid: Working conditions in South Asia’s leather, leatherwear, and footwear factories

14 February 2023

Bangladesh, Pakistan, and India play a major role globally in the export of leather for further processing as well as for products, such as shoes, clothing, bags, suitcases, and belts. It is an industry that contributes significantly to these countries’ economies. There are approx. 200 mainly small and medium-sized tanneries in Bangladesh. Around 80% is produced for direct export and 20% for domestic processing. The main site is an industrial park in Savar, near Dhaka. There are also a smaller number of workshops and factories in the former tannery hub of Hazaribagh in Dhaka’s old town. Leather products, mainly footwear and accessories, are manufactured in the country’s many other production zones. Leather garments are produced in relatively low numbers. It is estimated that the entire sector employs more than 850,000 people.

Four recent regional studies on the leather industry and working conditions in Bangladesh, Pakistan, and India conducted in 2022 by the Together for Decent Leather consortium provide comprehensive information on the sector. The studies examine tanneries in Savar near Dhaka, tanneries and leather-processing facilities in Karachi in the Pakistani province of Sindh, and in the cities of Vellore and Ambur in the Indian state of Tamil Nadu.

All of the selected regions are key leather production hubs. The analysis is based on surveys of a total of 345 leather workers, interviews with local experts from civil society, business, and government, analysis of publicly available commercial data (e.g. concerning leather shoes produced in Bangladesh), as well as a survey of brand[1]name companies and leather importers. This factsheet summarizes the studies’ most important findings. Further details can be found in the respective publications.

Download the factheet here.

SOMO

Government, employers and labour rights organisations work together to improve labour issues in the Bangladesh leather industry

14 February 2023

Bangladesh produces leather and leather products such as shoes, belts, bags and wallets. The leather and leather goods industry are important for Bangladesh’s economy: it is the second-largest source of the country’s export earnings. Social and environmental compliance is poor, unfortunately, which also affects the export.

Bangladesh Labour Foundation (BLF), as well as other organisations, have for long pointed to the poor labour practices in the Bangladesh leatherware industry. Recent research by BLF as part of the Together for Decent Leather programme found new evidence of the low wages and precarious employment conditions of tannery workers.

After years of awareness raising, dialoguing and campaigning, a milestone was reached in April 2022 with the adoption of a National Action Plan for the Bangladesh leather industry. It is a joint effort of the Bangladesh government, industry and the labour movement. The action plan aims to improve the industry’s compliance with labour laws; boost environmental management; and work towards increased certification of Bangladesh’ tanneries by the Leather Working Group.

The action plan was jointly developed by BLF and the Department of Inspection for Factories and Establishments (DIFE – under the Ministry of Labour and Employment), and with active participation of many stakeholders including the Ministry of Commerce, the Ministry of Industry, the Bangladesh Tanners Association (BTA), the Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association (BFLLFEA), and the Tannery Workers Union (TWU).

Ashraf Uddin, Executive Director of BLF said the initiative is the first in its kind. “This is the first time in Bangladesh that government, employers, worker representatives and civil society developed together and unanimously agreed upon a plan to improve working conditions and address environmental and social compliance.” BLF and TWU took the lead in bringing workers’ perspectives and priorities to the negotiation table. As a result, the plan includes key workers’ issues such as the formalisation of employment relations, payment of minimum wages, access to social security schemes and the promotion of collective bargaining.

For the implementation of the action plan for the leather industry a Working Committee was formed, comprised of representatives of the various stakeholder groups – employers, unions, and government. DIFE has the lead of this Working Committee and BLF is acting as secretariat.

“Whether the ambitious goals of the action plan will be reached indeed depends on the continued commitment of all parties – government, employers, trade union and civil society” says Ashraf Uddin. He adds that continuous monitoring and applying enforcement measures where needed are also essential elements.

Monitoring and regular inspections of factories is an ongoing DIFE responsibility. So far, under the action plan, DIFE visited 22 factories. Additionally, in January 2023, the newly established Working Committee visited six factories. Ashraf Uddin is positive about the rate of NAP activities so far and has good hopes that this will continue.

The idea is that the DIFE will share individual factory inspection reports with the Working Committee, including with the labour movement representatives on the committee. This means a step forward in the level of transparency shown by government to civil society. DIFE does publishes aggregated inspection reports, but these do not mention names of individual facilities. Employers that are found not comply with labour regulations will be notified. They will be given a timeframe of three months to implement improvements. If failure to live up to labour regulations is not rectified, DIFE may undertake legal steps.

European companies silent about their links to labour rights issues in Bangladesh tanneries

6 December 2022

Leather tanneries in Bangladesh are well-known for their poor working conditions. Although it is clear that companies like Bristol, Scapino, and Wortmann (known for the brands Caprice and Marco Tozzi) source leather shoes from Bangladesh, whether they use leather from Bangladesh remains unknown. When asked, the companies did not answer. Questions to these companies on what they do to prevent labour rights risks in leather production, or to solve actual problems, also remained unanswered.

Martje Theuws (SOMO): “These shoe and leather brands’ supply chains remain hidden, while transparency and open communication should be the norm in such a high-risk sector. It is impossible to engage with buying companies about abuses in a country like Bangladesh if there is no public information about who buys what from where.”

For this research, SOMO contacted 13 shoe companies and 14 leather importers. Only six companies responded to SOMO’s questions.

Insecure, unhealthy, underpaid work

The Bangladesh Labour Foundation (BLF), an organisation that SOMO works closely with, conducted investigations into 26 leather tanneries in Savar, close to Dhaka. This research confirmed that labour rights are grossly violated in the production of leather in Bangladesh: very few workers have a contract; payment below the minimum wage is common; and working days are long. Workers in these tanneries also face severe health problems due to exposure to chemicals.

Ashraf Uddin (BLF): “Despite the efforts of the international labour movement, and the national plan of action of the Bangladesh government to address social security problems in this sector, much remains to be done. Foreign buyers of leather and leather products have a great responsibility in this regard. How they act towards producers and towards the government has a great impact on working conditions in the supply chain.”

Untransparent supply chain

It is extremely difficult to map leather supply chains from slaughterhouse to shop. Shoe brands, factories, tanneries, subcontractors, and leather traders together form an opaque web. This prevents civil society and others from holding buying companies publicly accountable for abuses in their supply chains.

Legislation on transparency needed

Since companies do not voluntarily share information about their supply chains, legislation is needed, according to the researchers. Upcoming legislation on corporate accountability at the European level and in EU members states that will oblige companies to conduct business with respect for human rights, the environment, and the climate should therefore also include firm provisions on supply chain transparency,” Theuws said.

Download Indecent work

Luxury brands must reveal the origin of their leather goods

3 November 2022

Luxury brands including Armani, Versace, Michael Kors and Coach don’t provide key information on the origin of their leather products. An analysis carried out by SOMO shows that 35 out of 44 luxury brands examined do not publish supplier lists that show where they source their leather jackets, trousers, shoes, belts, gloves, bags, and other leather goods. This is concerning because the global leather industry is notoriously associated with labour rights abuses and environmental pollution.

Online table with the scores of the companies

Only a handful luxury brands give some information on the origin of their leather products. Among these are Bally, Zegna and Fendi. But there is still a long way to go. The information provided by these companies is far from complete. Meanwhile, most brands do not publish a supplier list at all, failing to meet even the most basic standards.

Martje Theuws of SOMO said: “Our analysis shows that companies in the luxury segment are particularly lagging behind. This is shocking. If a company knows its suppliers and supply chain, then there is no reason not to publish a supplier list. If a company does not know its supply chain, this raises serious questions about the company’s due diligence.”

The importance of supplier lists

Supplier lists are a well-established tool in the apparel sector, allowing different groups – workers, investors and consumers – to trace the origin of goods. Supply chain disclosure is considered an important step on the long road to ensuring decent working conditions.

Of the 100 companies SOMO reviewed in total, which included 44 luxury brands as well as footwear and other companies that sell leather goods, less than one-third (29 out of 100) publish a supplier list. Only 17 companies provide information on processing facilities and suppliers of raw materials. The luxury goods companies performed below average. Only 20 per cent of the luxury brands (9 out of 44) disclosed their suppliers.

Poor working conditions

Workers in the global leather industry often face harsh working conditions. Low wages, long working hours, and job insecurity are frequently reported in low-wage production countries. The chemicals used in the processing of leather can be toxic and, for workers who are not provided with proper protection, exposure can lead to serious health problems. Labour issues have also been reported in Europe, where migrant workers in particular may face poor employment conditions.

Very limited information disclosed by the brands

Not a single company in our sample discloses information on the wages that workers in their supplier facilities earn. A mere 4 of the 29 companies that publish a supplier list include information on indicators related to freedom of association and collective bargaining in these lists. In the luxury segment, only Zegna provides any information on these issues.

“These companies publish information and reports, some of which present very positive pictures of their corporate responsibility, but the failure to publish full supplier lists is problematic. Scattered information on supply chain issues does not allow for proper scrutiny. Such an approach can conceal as much as it reveals”, Martje Theuws noted.

Voluntary initiatives don’t enforce transparency

More than fifty per cent the luxury brands analyzed (24 out of 44) participate in voluntary multi-stakeholder initiatives or certification schemes.

Martje Theuws said: “SOMO’s analysis shows that these kinds of voluntary initiatives do not guarantee supply chain disclosure because they don’t enforce transparency on their members. Therefore, it is extremely important that upcoming legislation on corporate accountability at the European level and in EU members states should include obligations for companies to publicly disclose supply chain information.”

Investigating public information of 100 companies

For this analysis, SOMO selected 100 companies in the luxury goods and footwear segments in the leather industry. Additionally, we included a number of online retailers. Among these 100 companies are some of the largest players in terms of company size, turnover, and market share. SOMO used information from a range of public sources for its analysis, including company websites and the Open Apparel Registry. Together with our report, we are publishing a discussion paper on what kind of supply chain information companies should disclose.

SOMO asked Armani, Coach, Michael Kors and Versace to respond to the concerns about their failure to publish a supplier list. The companies did not reply.

Together for Decent Leather

SOMO’s investigation is part of the programme Together for Decent Leather co-funded by the European Union. SOMO is a participating partner in the programme.

Report: Employment and working conditions in Bangladesh’s leather industry

14 September 2022

In this study among 120 tannery workers reveals severe labour rights risks in Bangladesh’s leather industry. Problems include low wages, health hazards due to unsafe working conditions, heavy pollution, insecure jobs and forced overtime. The survey was conducted by Bangladesh Labour Foundation (BLF) and (RAPID).

The survey shows that 111 of the 120 interviewed workers were employed on a non-permanent basis. Of the surveyed workers, 95 per cent were appointed without a signed contract or any other formal employment arrangements, which leaves them without any written confirmation of their employment terms and without any proof of employment. More than half of the surveyed workers (56 per cent) received a monthly wage that was less than the national minimum wage of Tk. 13,500 ($ 158) set by the government for tannery workers. Tannery workers toil for long hours, sometimes with forced overtime, and are subject to the whims of their employers because of scant union activism and weak workers’ representation. A lot of workers in Bangladesh’s leather industry suffer from health problems due to unsafe working conditions like skin diseases (28 per cent), shortness of breath (13 per cent), stomach ailments (32 per cent), and headaches (63 per cent). Three-quarters of those interviewed work without proper protective gear, and 79 percent lack training in how to use chemicals safely during tanning work.

Download now

Download here a short summary in Bangla: Bangla translation Bangladesh field research

Campaign for Decent Leather

21 June 2022

Working conditions in the leather industry in Pakistan, Bangladesh and India are very harsh. At the same time, western brands refuse to provide information about working conditions in their supply chain. Among them is industry giant Wortmann with its Tamaris brand. Simultaneously, Wortman places great emphasis on social responsibility in their marketing. We want to know under what conditions leather and shoes are produced and what the company is doing to respect human rights. Join us and send Wortman an e-mail.

www.faysalsframe.com

Session: solutions to address social conditions in the leather-based garment supply chain

15 March 2022

During the third UN South Asia Forum on Business and Human Rights, Together for Decent Leather is hosting the side session ‘Solutions to address labour rights challenges workers in the leather-based garment supply chain’. The session will take place on Friday, 25 March from 11:30 to 13:00 am GMT +6. During the session, the consortium will reveal first insights from newly conducted research on working conditions of leather workers in Bangladesh, Pakistan and India, who is responsible for solving the problems and what should be done.

The Session

In a panel setting, Mahmudul Hasan Khan (Bangladesh Labour Foundation), Farhat Parveen (NOW Communities Pakistan) and Pradeepan Ravi (Cividep India) will speak about vulnerable leather workers in their countries. What are the specific obstacles for homeworkers, women workers and tannery workers face? How to improve their living and working conditions? SOMO will share its preliminary insights from research on transparency of international brands producing leather garments and footwear and explain how advanced supply chain transparency is key to enhancing the social conditions for leather workers.

> Go to the webpage where the session will be hosted

Tamil Nadu footwear sector minimum wage revision: A reminder for global brands to pay living wages

8 March 2022

Last year, in July 2021, the Tamil Nadu government notified the revision of minimum wages for workers employed in the state’s footwear manufacturing industry. This latest revision, although late by two years, assumes significance as it was announced at a time when workers in the sector were facing enormous hardships. While the state government revised the minimum wages, the key question is whether it is justifiable for the industry to continue to pay workers using minimum wages as the basis when they are still recovering from the debilitating effects of the pandemic?

Revised wages – does it make a difference?

As per the revised rates notified in July 2021, the minimum basic wage rate for an unskilled worker in Ambur is fixed at INR ₹4,843 per month. This is a 24 per cent increase from the basic wage rates fixed for this category of workers in 2014. Similarly, basic wage rates for other categories of workers in the footwear sector have also been increased proportionally. In addition to the increase in basic wage rates, all categories of workers are also eligible to receive a variable Dearness Allowance (DA) which is linked to the Consumer Price Index (CPI). At the outset this increment comes across as a progressive step towards increasing the wage standard for the industry, and any increment is a succour in these pandemic-ridden times. Nevertheless, it is pertinent to look at this wage revision in view of the current economic model.

The pandemic has made visible workers’ vulnerabilities in global supply chains like never before. Several studies have pointed out that low-wage workers do not have any savings to tide over crisis periods and they resort to borrowing money to make ends meet. One of the main reasons for this is the poverty wages that workers receive. It does not allow them to save for crisis periods. Since 2019, the rate of retail inflation in India has been rising consistently. In the last two years the average rate of inflation has been above six per cent. The price of essential commodities such as cereals, pulses, vegetables, fruits, meat and cooking gas has gone up. In light of this economic situation, the revision in minimum wages is nothing more than an eyewash that simply allows workers to sustain their hand-to-mouth existence.

Industry fixation with minimum wages

Low wages are one of the main features of employment in India’s leather and footwear sector. The main reason is that the industry prefers to use minimum wages as the basis for wage payment. Whereas in the footwear sector, a majority of workers are women who are not organised. Their lack of power to bargain makes it impossible to negotiate better wages with employers. This has resulted in stagnation of the wage rate for several years, leaving workers at the mercy of minimum wage rates set by governments.

The Minimum Wage Advisory Board set up by the state government decides the basic minimum wage rates. It follows a set of rigid criteria pronounced in the Minimum Wages Act, 1948. In practice, however, its process has been critiqued for not being completely transparent and for not having enough consultations with workers or their representatives. The very fact that revised wages were announced after a two-year delay, and without any measures to compensate workers for back wages points to this.

While suppliers stick to paying only minimum wages, the shortcomings of this are not completely unknown to international brands who source from footwear units in Tamil Nadu. International brands rely on social audits to ensure compliance with social standards in their supplier factories. These audits use minimum standards prescribed by local laws as indicators of compliance. The result is that such an exercise reinforces minimum wage as the standard wage for supplier factories. Although international standards encourage brands to pay living wages in their supply chains, they have not made any visible efforts to move in this direction.

Paying living wages is the way to go

We know from studies that the purchasing and other business practices of brands, and the standards they adopt to monitor their supply chains have a direct bearing on working conditions in factories. Therefore, shouldn’t living wages be the basis of labour costing in manufacturing contracts, instead of minimum wages? Unless brands address this question, it is very unlikely that suppliers will make real efforts towards paying wages above the minimum floor wage. While there are various efforts by civil society actors to push brands to review their purchasing practices, what is really required are statutory interventions mandating them to pay living wages to workers. The proposed EU-level mandatory Human Rights and Environmental Due Diligence (mHREDD) legislation has a huge opportunity to address this gap. If this law is successful in making it mandatory for brands to ensure payment of living wages, it would pave way for addressing many other connected supply chain-related risks to human rights. In addition, the legislation should also obligate brands to implement effective grievance mechanisms for workers, and ensure that freedom of association is respected. Providing an enabling environment where workers have the opportunity to bargain collectively for better wages will also contribute towards improved working conditions. Finally, a robust and ongoing system to conduct human rights due diligence in supply chains involving all relevant stakeholders would go a long way in mitigating social risks and maximising social outcomes.

This blog is written by Pradeepan Ravi from Cividep