How Belgian fashion brands are also passing the financial burden of the corona crisis onto garment workers

JOURNALIST: SARAH VANDOORNE

From Belgium to Bangladesh: the impact of the coronavirus on the clothing industry

We are consuming less because of coronavirus. That’s why clothing brands, like many other companies, have cancelled orders from suppliers. The result though is tens of thousands of textile and garment workers in Bangladesh are left without work and without income. Have Belgian fashion brands taken-up their responsibility, or have they simply left their workers behind?

1,5 billion euros loss for the Belgian fashion industry

1.5 billion euros. That is how much the Belgian fashion industry lost between March and July, according to calculation by Comeos, the sector federation representing larger retailers such as ZEB and C&A.

If you put those figures next to figures from the Bangladeshi trade association BGMEA, you get a different picture. According to this organisation, which represents garment manufacturers in textile country Bangladesh, almost 3 billion euros worth of orders were cancelled at the start of the corona crisis. This translates to roughly a billion unsold garments and impacts over a million workers.

According to research by the Schone Kleren Campagne (Clean Clothes Campaign), workers were paid up to 4.9 billion euros less as a direct result of the cancellations. It is estimated that Bangladesh lost almost half a billion euros. 

50 to 60 million workers have been affected worldwide. It’s heartbreaking when you know that three out of four of those workers struggled to provide food for their families and that one in ten garment workers worldwide was made redundant. 

Among the fashion brands that cancelled or suspended orders in Bangladesh are sixteen medium to large Belgian clothing companies. Involving a total of 7 million garments, worth over 15 million euros. Research shows that in Bangladesh alone, Belgian brands’ cancelled orders affected almost 80 000 workers. 

Hans Cardyn, Comeos’ spokesperson, says it’s ​‘understandable that traders cancelled orders during the crisis’. It’s the first time we have ever been faced with a crisis of such magnitude’, writes Cardyn. ​‘In the spring, sales came to a stand still. It was difficult for production to continue: orders had to be adapted to the new reality’.

New reality? #PayUp

The difference between a bad year for a retailer and a worker without a job? ​‘One is still able to eat, the other is not. It’s as simple as that.’ Dil Afrose Jahan (29)

Comeos’ pragmatic view is at odds with the vision of human rights organisations at home and abroad. The Schone Kleren Campagne (Clean Clothes Campaign), for example, has been calling on brands not to selfishly cancel orders since mid-March. The organisation’s American counterpart, the Worker Rights Consortium (WRC), has even started a tracker to monitor which brands have done so. 

Pay suppliers in time for placed orders, even if they were cancelled or postponed due to the corona crisis: that is the call from organisations to fashion brands. The American organisation Remake, which wants to put an end to fast fashion, launched the hashtag #PayUp at the end of March and a petition, which was signed almost 300,000 times.

According to Bangladeshi Dil Afrose Jahan (29), freelance journalist for the newspaper Dhaka Tribune, we should ​‘not have too much sympathy’ for shops and brands in financial difficulty that cancel or suspend orders. ​‘There is a big difference between a bad year for a small or large retailer and a worker who loses their income or job’, says Jahan. ​‘One person will have food on the table the next day, the other will not. It’s as simple as that.’

Belgian brands are also involved

Which brands that produce in Bangladesh cancelled or postponed orders at the beginning of the corona crisis? This information is not easily available to the public, but was collected by the Bangladeshi trade association for manufacturers BGMEA to support research by Workers Rights Consortium, in collaboration with Penn State University.

The information was leaked by an anonymous human rights activist in Bangladesh, and journalist Dil Afrose Jahan received the dataset. This was done outside of BGMEA’s control. Jahan had previously worked with foreign investigative journalists and shared the Excel file with Reflekt, a Swiss investigative journalism platform, and the Dutch news site De Correspondent. The data is now publicly accessible via Reflekt’s website.

Jahan investigated the information together with Reflekt journalists Sylke Gruhnwald, Christian Zeier and Benedict Wermter and De Correspondent journalist Emy Demkes. They focused mainly on C&A.

In addition to this well-known European retailer headquartered in Belgium, fifteen other Belgian brands are mentioned. Together, they account for almost 7 million garments worth over 15 million euros. BGMEA’s data also states how many workers have been affected.

C&A accounts for half of these figures. According to the dataset, C&A cancelled orders destined for the Belgian market worth 7.5 million euros. Worldwide, the brand cancelled orders worth 151 million euros. The company has yet to promise they will pay 100% of those orders. WRC is keeping a close eye on this.

Leaked data

Journalist Dil Afrose Jahan has been working at Dhaka Tribune for almost five years. In recent years, she has focused more and more on the clothing industry. This has enabled her to build up a network of informants, including local human rights organisations and trade unions. This is how she received confidential information regarding the cancelled and delayed orders in Bangladesh.

The leaked information also reached a colleague of Jahan at a competing newspaper, The Daily Star. This colleague received the exact same dataset from two different sources. 

Jahan had previously worked with foreign journalists and decided to share the information with Sylke Gruhnwald, Christian Zeier and Benedict Wermter, journalists at the Swiss research platform Reflekt. They in turn shared the data with Dutch journalist Emy Demkes, clothing correspondent at De Correspondent. In July, a team of five journalists published articles in Dhaka Tribune, De Correspondent and the (German-language) Swiss magazine Beobachter.

Following a survey of the Belgian brands in the list, it’s clear that several of these brands are calling into question the data regarding their orders in Bangladesh. One company called the source ​‘not accurate’ and refused to respond to an interview. Another brand questions the way in which the data was collected.

Rubana Huq, chairman of BGMEA, rejects their claims. She calls the dataset ​‘correct but dated, given that the information was requested in March’. Benedict Wermter, journalist for Reflekt, describes the dataset as ​‘an incomplete snapshot that nevertheless paints a clear picture of the situation’.

Watchdogs such as WRC can check whether big brands keep their promises by contacting important suppliers and local trade unions. It is a lot more difficult to monitor whether smaller companies have also paid for their orders. All interviewed brands claim they did even if the orders were delayed or cancelled. However, when asked for proof of payment, none of the brands provided any for competition and privacy reasons.

What we do know though is that the fifteen Belgian companies from the leaked dataset decided to cancel or suspend orders from Bangladesh back in March.

Which brands cancelled or postponed their orders?

Data from the dataset shows that these Belgian brands suspended their orders in March:

• Stanley/​Stella,
• Xandres,
• JBC,
• Bel&Bo,
• Carodel,
• XML (Expert Manufacturer Leisurewear Zaventem),
• Vegotex international,
• Van Laere international,
• Bremed,
• Mongrel Fashion (Haze&Finn)
• Sogesma (Trafic).

Three Belgian brands partly cancelled partly suspended orders in March:

• Bel&Bo
• Malu
• LolaLiza.

And finally, three Belgian brands completely cancelled their orders in March:

• Euro Shoe
• Jovitex
• C&A, the well-known European retailer headquartered in Belgium.

According to the data, these seven foreign companies importing into Belgium are also definitely involved:

H&M, Damart, Carrefour, Quiksilver, TigerCo, Marni Clothing, Devred 1902 (Mathex), Sincia 4

If we tally up all the orders that were meant for the Belgian market, we arrive at a total of over 24 million euros. And that is probably just the tip of the iceberg of cancelled orders.

The leaked data also mentions other major brands that have shops in Belgium: brands such as Esprit, Vero Moda, Only and Jack & Jones are still not paying for their orders. But their listed orders were not specifically destined for the Belgian market. Other brands, including Primark and Gap, only confirmed their orders last summer.

“The majority of the interviewed brands admitted they temporarily postponed part of their order.”

The majority of companies temporarily delayed orders. According to the data, three companies decided to cancel some or all of their orders: Euro Shoe (the group behind the Bristol chain, red.), LolaLiza and Malu.

Malu denies that the cancellations in the dataset have anything to do with the corona crisis. LolaLiza’s response doesn’t mention cancellations but talks about ​‘reductions’. And communications with Bel&Bo show that they too cancelled some of their orders. A smaller brand that first put its orders on hold, Bremed, decided in the end not to put any new orders through this year. 

Most of the brands admitted they temporarily postponed part of their orders (don’t miss the fashion brands’ full responses here). Only JBC speaks of ​‘a few adjustments in terms of delivery dates’ and emphasises that it has ​‘not put anything on hold at all’.

Most brands explain that both postponing and cancelling orders were always done in consultation with the supplier. A number of brands say that the supplier even asked for it due to Bangladesh being in lockdown: delays were unavoidable. 

‘There have been delays due to Bangladesh being locked down twice’, says Patrick Desrumaux, CEO of fashion brand Xandres, which mainly produces in Europe. Bruno Van Sieleghem, head of sustainability at Stanley/​Stella, agrees: ​‘Our suppliers were especially happy that we did not cancel our orders, as so many other brands did’. Due to the exceptional circumstances, the brand received a one per cent discount from the supplier, ​‘which seemed fair to us’.

‘Postponing orders is equally problematic’

Like JBC and Bel&Bo, Stanley/​Stella is a member of the Fair Wear Foundation, an organisation that helps brands make step-by-step improvements to the working conditions in their factories. Fair Wear Foundation has advised brands since the beginning of the coronavirus crisis on the impact of their decisions on the lives of affected workers. The organisation will also assess how they dealt with the crisis in an annual Brand Performance Check.

‘Our collections will not be out of fashion, and dumping everything in the sales doesn’t seem sustainable to us.’ JBC

‘Our advice? Don’t cancel orders that are ready or almost ready to ship, that are already in production or for which fabric has already been bought or cut’, says Lotte Schuurman, communications manager of Fair Wear Foundation. ​‘Passing on orders to the next season and postponing payments has the same effect as cancelling orders’.

For Jasmien Wynants, sustainability expert at Flanders DC, it’s unrealistic to say that brands should just go through with their orders. ​‘It is a global and systemic problem, not something that only happens now and in Belgium. On the one hand, some of the brands will have to file for bankruptcy. That doesn’t solve anything. On the other hand, if you don’t cancel, you are going to overproduce: you are creating something for which there is no market. That’s also how you contribute to the problem’.

What about all the unsold clothing?

Some of the unsold clothing will be carried over to the next fashion season, others will be sold in the ​“outlet” section of the shop and in next year’s sales. That’s what Isolde Delanghe, director of the Belgian sector organisation Mode Unie, says. ​‘If the stock is not sold by then, it will go to a charity or to a buyer’.

‘We have let all orders go ahead and now have a huge amount of stock in our warehouse,’ says Valérie Geluykens, corporate social responsibility manager at JBC. ​‘Filled to the brim! We have moved some of the collections from spring to September, others will be brought out immediately before summer 2021. That’s a conscious choice: our collections will not be out of fashion, and just dumping everything in the sales doesn’t seem sustainable to us’.

Sara Ceustermans from the Schone Kleren Campagne (Clean Clothes Campaign) thinks this is positive. ​‘A much worse scenario would have been if they thought stocking costs were too high and simply destroyed the clothes. Although I have to admit: I assume this will happen in the industry after all, but perhaps first by other companies’.

“Postponing orders seems less drastic than cancelling them, but that, too, can have an impact on workers’ wages.” Sarah Cuestermans, Schone Kleren Campagne

Professor Huib Huyse, head of the research group for sustainable development (HIVA/KU Leuven), thinks it’s interesting that some brands deal better with summer collections being delivered late than others. ​‘Some companies say they will simply put away their stock until next year. Others say they no longer wish to purchase their order and cancel it. That makes a serious difference’.

Postponing orders seems less drastic than cancelling them, but that can also have an impact on workers’ wages’, points out Ceustermans. ​‘The orders will often already have incurred fabric and labour costs. Brands need to do their homework and assess how they can mitigate the impact of their decisions, so that garment workers are not the victims of them’.

‘What is crucial in this story is whether these decisions were made in agreement with the manufacturer,’ says Schuurman. ​‘That might sound simple, but the sad reality is that it’s rare for factories and brands to work together as partners. Brands have had a very hard time, as you well know. They are looking for ways to continue forward. Sometimes by consulting with the factory they succeed in finding a solution. Then together they can limit the damage.’

Friends in need

Compared to C&A, which according to Reflekt’s research did not consult suppliers before cancelling its orders. All the Belgian brands interviewed, emphasised that they always consulted before postponing or cancelling an order. ​‘In times of emergency, one gets to know one’s friends,’ says CEO Desrumaux of fashion brand Xandres. ​‘We have found a lot of friends at our suppliers’.

‘Cancelling orders when problems arise, after years of structural cooperation, that’s not ethical business management’.

‘In Belgium there are many family businesses with long-standing partnerships with suppliers to guarantee the continuity of their production,’ explains Boris Verbrugge, researcher at HIVA. ​‘That kind of relationship also brings with it responsibility. If you have been making purchases from the same supplier for five to ten years and then just cancel your orders when there are problems, that is not ethical business management’.

The researcher calls it a balancing act. ​‘If companies’ responsibilities become too great, they will just distance themselves from their suppliers. Then these kinds of situations arise and orders are cancelled without consultation. But at the same time, these long-term relationships hold a big part of the solution’.

Solutions? human rights due diligence and wage guarantee

Researcher Boris Verbrugge refers to European legislation about ​‘human rights due diligence’. At the end of April, Belgian EU Commissioner Didier Reynders (MR) promised to address this issue.

The new federal coalition agreement refers to this briefly, in two sentences. ​‘The government will play a pioneering role in the elaboration of a European legislative framework on duty of care’, it reads on page 76. ​‘Where possible, a supportive national framework will be worked out for this purpose’.

‘In light of future legislation on duty of care, it will become increasingly important for companies to respond appropriately and to take responsibility. On good and bad days’, says Verbrugge.

‘Brands can already get their ​“due diligence” in order,’ says Sara Ceustermans of the Schone Kleren Campagne (Clean Clothes Campaign). ​‘What disappoints me a bit, based on the reactions, is that brands didn’t seem to know what their possible impact was on employees’ wages. Even when orders were ​“just” suspended and later paid. Knowing that impact is an essential part of the duty of care’.

Ceustermans is not pinning all her hopes on political processes, and this autumn will also be entering into discussion with brands about a wage insurance or wage guarantee. ​‘Brands must free up resources and guarantee to the public that all employees in their supply chain will receive a normal wage. This includes overdue wages and severance payments if a factory has to close’.

This wage guarantee would be there in times of crisis, but Ceustermans is hoping for more permanent contributions. ​‘Clean Clothes Campaign is currently working on a proposal to tackle the problem of late wages and missing severance payments, by means of a fund.’

What do the brands themselves think of this? The brands we interviewed and who responded to the proposal are still holding back. Some refer to their ongoing engagements with Fair Wear Foundation. Tine Buysens of Bel&Bo does respond positively and says that through their Fair Wear Foundation membership they will look at ​‘how we can concretely translate our acquired knowledge into our current expanded structures’.

How are the Belgian brands doing now?

My biggest question looking at the numbers is what the underlying intention was of the cancellations and postponed orders’, says Professor Huyse from the research group for sustainable development. ​‘If it were only about safeguarding profit margins so that the company would be perfectly healthy again in two years while hundreds of thousands of people ended up in the streets then that’s obviously bad.’

Fashion brands are not all doing so well at the moment. One of Vegotex’ customers went bankrupt, so that brand had to postpone their order.

Euro Shoe (Bristol), which is operating at a loss and did not want to respond to this article, announced earlier in the press that it might have to close forty extra Bristol shops.

‘We even financially supported two large factories, one in India and one in Bangladesh,’ Van Craen MALU

However, none of the brands that we were able to interview were completely negative about the recent period, despite a significant loss of turnover. ​‘We manage our business like a good family man and can withstand a though period,’ says, for example, Tine Buysens, corporate social responsibility manager at Bel&Bo. Bruno Van Sieleghem from Stanley/​Stella said: ​‘We grew less than expected, but will still grow by eight percent despite the circumstances’.

‘This has not been an easy year for anyone, but we have held up pretty well,’ concludes Roger Van Craen, owner of Malu, a clothing supplier to major retailers in our country. ​‘Through contact with suppliers in China, we were able to anticipate quite quickly.’

‘We even financially supported two large factories, one in India and one in Bangladesh,’ says Van Craen, ​‘when they were unable to produce because, among other things, they were no longer getting fabric from China. That’s the kind of relationship we have with our suppliers.’

And how are the workers doing now?

The same Roger Van Craen, owner of fashion brand Malu, let on that he is not 100% sure that the garment workers in Bangladesh have been paid. ​‘We know that a number of factories have gone into lockdown. I cannot say with certainty whether those manufacturers have paid their workers. There is a big difference between the social safety net here and the lack of a safety net there’.

‘This shows a lack of understanding of responsibility’, concludes Ceustermans, referring to the duty of care that she previously spoke of. ​‘It is, of course, true that there is hardly any social safety net. That’s why brands need to make that effort to identify and remedy risks’.

‘If I don’t work, I’ll starve at home’, Kulsum garment worker C&A

De Bengalese journaliste Dil Afrose Jahan sprak met arbeiders die kleding in elkaar stikken voor C&A. ​‘Als ik niet werk, zal ik thuis verhongeren’, getuigde één van hen, Kulsum (schuilnaam), haar anoniem. ​‘Als ik corona krijg, zou ik niet genoeg geld hebben voor een behandeling.’ Luister zelf naar deze korte opname van een gesprek met haar:

Ook onderzoek toont aan hoe moeilijk arbeiders zoals Kulsum het de afgelopen maanden hadden. Uit cijfers van de Global Alliance for Improved Nutrition blijkt dat 43 procent van de kledingarbeiders in Bangladesh ondervoed was tijdens de lockdown. Andere cijfers, van BRAC en de Universiteit van California, stellen dat 77 procent van de kledingarbeiders het momenteel ​‘moeilijk hebben om hun familie te voorzien van eten’.

Een op de tien kledingarbeiders werd ontslagen tussen januari en juni, volgens een recent rapport van Worker Rights Consortium. Het zijn cijfers die niet enkel opgaan voor Bangladesh: de nieuwe studie focust ook op de kledingindustrie in Cambodja, India, Indonesië, Myanmar, Pakistan, Vietnam, Egypte, Ethiopië, Kenia, El Salvador, Guatemala, Nicaragua, Mexico en Peru.

Die cijfers dekken waarschijnlijk de volledige lading van de coronacrisis nog niet: de onderzoekers houden er rekening mee dat de komende maanden nog eens 35 procent van de textielarbeiders de laan uitgestuurd kan worden. ​‘Dit is heel alarmerend.’

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