The Siren of Novgorod

Covid-19 has not only brought uncertainty and deaths. It also revealed corrupt systems, including fast fashion industry and its relation with Covid-19 in developed countries. The inhumane treatment to the workers and low safety standard apparently not only present in developing countries, but also the heart of the UK – Leicester.

Since the beginning, the fast fashion industry supply chain has become a problem and Covid-19 makes it worst. Usually, the retailers use foreign manufacture in a third world country to suppress the cost, making it as cheap as possible. Many of these suppliers faced export difficulties during Covid-19 lockdown. This circumstance made retailers aware of the importance of using domestic industries.

Unfortunately, it will lead to more social and security problems for domestic workers, if they are still abusing the workers. This time in Leicester in the spotlight, so that all stakeholders can move to bring better change (hopefully).

What happened in Leicester

Earlier in July, the textile industry in Leicester has become the spotlight after Covid-19 case spike in the city. Leicester then put under a local lockdown. We cannot blame the case only in the garment industry, but it helps open the eyes of the government about the exploitation of workers for the textile industry.

The Guardian, BBC and FT’s journalists came to Leicester and found out that the workers are still working during the previous nationwide lockdown. The workers that interviewed by Archie Bland from The Guardian also said that they did not do physical distancing or follow any health procedures, and the factory is under poor condition.

Most of these factories are supplying Boohoo, one of the biggest UK fast fashion retail company. Boohoo has several fashion lines under it as well like Pretty Little Things. Boohoos’s and its lines’ main unique selling point is their production speed and the ability to provide to the latest trend.

During the lockdown, suddenly the fashion trend turned into the loungewear. No one has the stock yet, but Boohoo could directly pivot to loungewear because they sourced locally and they chose Leicester, a place where they can produce new trends quicker but with the same cost as manufacturing in the third world country. Fast fashion could cater a sudden need but Covid-19 revealed its dark side.

The garment workers’ condition

The condition for the Leicester workers is as bad as the third world country. While the UK’s minimum wage per hour is £7.83, in Leicester £5 is the top salary. Most people receive around £3.5-4/hour. They also work for 20 hours/day. Most of the workers itself are the second or first generation of immigrants who could not speak English properly, some are unskilled and some are not even documented.

The factory itself is not like a usual garment factory. Manufacturers usually use old, dangerous buildings with cables dangling everywhere as their main building. There is more than one factory inside a building. Typically, one factory in Leicester consists of a maximum of 10 workers. The tailors and workers must secretly work and move from one struggling factory to another struggling factory.

Why are they letting this happen?

In the 70s, Leicester was the textile manufacturing hub with an excellent working condition for the workers. It has been known that retailers want to find cheaper options and in 2000ish most of them left the country to produce garments in developing countries which offer decent quality clothes at a lower cost.

The factories and workers that left behind are struggling to compete with the third world country now. They have to offer lower price to operate. Suppliers and manufacturers blame each other for this. Manufacturers feel that suppliers are always pressuring them to compete with the lowest prices.

In contrast, suppliers blame because they say they order in large manufacturers that are subcontracted with these small factories. For me, none of them are innocent. fast fashion has created a lot of fundamental problems and Covid-19 is just one of the tip of the iceberg.

Ethical Trading Initiative

The central government is investigating this illegal operation now. However, the community, local government and retailers have known this all of this time. There is an organization called the Ethical Trading Initiative, which is an alliance of retailers and unions that work together to build an ethical and sustainable garment industry in the UK.

ETI retailer members will audit their suppliers in Leicester and terminate contracts with suppliers that break the law. Retailers have more power than suppliers. Therefore, ETI feels that retailers should be able to change the condition by supporting manufacturers who try to remain (more) ethical even though they must continue to compete.

After doing the factory audit generally, ETI members cut most suppliers from Leicester. In example now ASOS only uses 16 factories, whereas in the past it worked with 130 factories. Boohoo himself is not an ETI member, so there is no obligation to conduct in-depth audits.

Problem with supply and demand of the fashion industry

Covid-19 has exposed many bad things related to the fashion industry, including supply chain issues. The fashion industry always manufactures abroad to get low prices without listening to market input. Generally, there will be 30-40% excess of products; that will result in accumulation of stock. This certainly creates financial and environmental waste.

After Covid-19, many suppliers were aware of the importance of locally sourced products. Several benefits can be obtained from local sourcing. First, it will be easy for retailers to keep abreast of changing trends to make their sales superior. Second, there will be a reduction in logistics and stockpiles so as not to cause a lot of waste, losses or discounts in the next season.

In addition to local sourcing, an on-demand manufacture model is also possible. So retailers only order at manufacturers after receiving order, so there is no waste of goods either. However, this is not possible to be done by fast fashion with or without Covid-19, because the essence of fast fashion is they can provide a new trend as quickly as possible. You could say that people’s desire to continue buying fast fashion products is the basis of the problem itself.

Retailer departure is not an answer

Many people will entirely blame the retailers and buyers, but manufacturers also make mistakes. Buyers usually offer unreasonable prices, as long as they can get a 60% profit. This makes production costs so low and hoping that the revenue will come in volume.

Retailers have a strong presence and financial capabilities, while these factories don’t. They depend on the work that can be given. Retailers know that their position is higher and they abuse this power. To lower the production cost, they suppress the welfare of workers and exploit them, especially the undocumented workers.

Fashion supply bottlenecks that occur due to lockdowns make many retailers aware of the benefit of having local many suppliers. This momentum should be used by unions, ETI, and the government to create stronger regulation to create a more ethical and sustainable future for garment workers. Retailers should not merely leave and make factories forced to rely on Boohoo and similar retailers who exploit them unfairly.

The departure of ETI retailers is not empowering factories to do better, because they do not have the capital. Therefore, these factories should be supported financially to be more ethical and train the employees, prioritize documented workers first and assist the undocumented workers to be legal. By helping these factories to be more ethical, the sustainability goals will be more achievable, rather than just leaving Leicester factories and hope it can can improve its condition.

Transparency and open costing

Since the garment factory accident in Bangladesh, garment industry stakeholders suggest transparency or open costing. Unfortunately, this has not been fully applied anywhere. Open costing is the transparency of the total cost of garment production, from raw materials, manufacturing, salaries, packaging and so on. Open costing can provide a clear understanding for retailers and also foster a trusting relationship between suppliers and retailers.

When suppliers seek profit by pushing down the production price, the factory will have difficulty increasing its capacity and quality. Retailers are expected to build good relations by providing transparency, improving the audit model and fostering ethical suppliers. On the other hand, manufacturers also shows the total cost of garment production, so that retailers know the condition of the factory if they cut down the production prices, can trust the factory, and not make salaries as a residual cost.

Open costing will help massive collaboration between retailers, labour unions, factories and the community. In the people’s perspective, when they buy something, they can also see the open cost of production of the clothes they buy. Customers will understand why clothing prices cannot be too low, and they also could track the suppliers. This system will help the check and balance process between all stakeholders in the fast fashion industry.