Impact of Global Clothing Retailers' Unfair Practices on Bangladeshi Suppliers during Covid-19

Background to the project and Research Summary

A research team led by Professor M. Azizul Islam at the University of Aberdeen, in collaboration with Transform Trade explore the impacts of Global Clothing Retailers' Unfair Practices on Bangladeshi Suppliers during Covid-19.

Based on a survey of 1,000 Bangladeshi factories/suppliers producing clothes for global fashion brands and retailers, this research highlights reports of unfair trading practices encountered by manufacturers during Covid-19. Suppliers reported that retailers/brands cancelled orders, refused to pay for goods dispatched/ in-process and demanded a reduction in price for orders already placed before March 2020. Since then, they further pressured the suppliers to reduce prices. Suppliers reported that in December 2021, despite the rising costs of inputs and the additional costs of Covid-19 mitigation measures, 70% of brands/retailers were still buying garments at similar prices to those in March 2020 from at least some of their suppliers . More than 50% of factories reported at least one of the following four unfair practices by brands/ retailers: cancellation of orders, price reduction, refusal to pay for goods dispatched/in production and delaying payment of invoices. Such unfair trading practices impacted suppliers’ employment practices resulting in worker turnover, loss of jobs and lower wages. Importantly, one in five factories reported that they had struggled to pay the Bangladeshi legal minimum wages since the factories had reopened following the March and April 2020 lockdown. We recommend countries with large consumer markets where global retailers and brands sell their clothes legislate to curb unfair purchasing practices by outlawing them and appointing an adjudicator or a fashion watchdog. This would ensure that buyers/retailers cannot dump disproportionate and inappropriate risks onto their suppliers and that retailers and brands conform to the norms of fair commercial practices

This project is funded by the Scottish Funding Council (GCRF - SFC Allocation for 20/21).

Project Team

Lead Investigator

Professor Muhammad Azizul Islam

Co-Investigators

Professor Pamela Abbott
Dr Shamima Haque (University of Dundee)
Ms Fiona Gooch (Transform Trade Charity)

Resources

Research report

Impact Of Global Clothing Retailers' Unfair Practices On Bangladeshi Suppliers During COVID-19

Policy Brief/s

(TO BE INCLUDED SOON)

Case videos

(WILL BE PROVIDED SOON)

Publications

Related prior studies

Islam, M. A., Deegan, C., Haque, S. (2021), Corporate human rights performance and moral power: a study of retail MNCs’ supply chains in Bangladesh, Critical Perspectives On Accounting, vol. 74, 102163 (https://www.sciencedirect.com/science/article/pii/S1045235420300162?via%3Dihub)
Nolan, J., Ford, J., Islam, M. A. (2021), Regulating Transparency and Disclosures on Modern Slavery in Global Supply Chains: A 'Conversation Starter' or a 'Tick-box excercises? Commissioned by CPA AUSTRALIA. CPA Australia. 22 pages (https://www.cpaaustralia.com.au/-/media/project/cpa/corporate/documents/tools-and-resources/environmental-social-governance/modern-slavery-global-supply-chains.pdf)