Health & beauty

Ethical clothing

Updated 01 Oct 2008

Introduction

What are local retailers doing to ensure that ethical clothing is sold here? With a few exceptions, not a lot.

In October 2007 we asked 20 retailers, from fashion designers to chain stores, what they were doing to improve labour standards and environmental practices in their supply chains. We received just 5 replies.

September 2008 update: We've revisited those 5 retailers to see how they have improved manufacturing processes since our initial questionnaire.

What is ethical clothing?

"Ethical clothing" is a broad term. An ethical T-shirt, for example, will be made from 100 percent organic cotton or "fair-trade" cotton. Cotton is a pesticide-hungry crop, and stories of poisoned workers and ruined environments are common in the cotton-growing world. Organic cotton can guarantee an end product grown without most of the damaging pesticides.

"Fair trade" means that workers in the field receive a reasonable wage for their toil, but it doesn't necessarily guarantee good working conditions for factory staff.

Beyond organic cotton, the factory where the T-shirt is manufactured needs to be run in a fair manner. Workers must be allowed to form trade unions; children shouldn't work on the production line; no one should need to work more than 60 hours per week; and even the lowliest cleaner should receive a wage that covers essentials, with some discretionary pay leftover.

These aren't new ideas; they're found in the eight core conventions of the International Labour Organisation (ILO). The ILO has been around since 1919.

We're playing catch-up

British consumers cottoned on to the concept of ethical consumerism before us. In 2006, major retailers like Marks and Spencer and H&M Hennes began to compete on how ethical they were. Organic and Fair Trade cotton ranges, at budget-basic prices, are now a common sight on the British high street.

Marks and Spencer's CEO Stuart Rose says: "customers care more than ever how products are made."

Oxfam New Zealand's chief executive Barry Coates says that awareness about how our purchasing practices affect vulnerable workers in the rag trade is still building in New Zealand.

But: "we are starting to see the emergence of suppliers who can assure their clothes are made from organic and fair trade cotton and/or sewn in factories that comply with international labour standards ... Some leading designers and brands are starting to see the opportunities. This provides the potential for far faster growth in the ethical clothing market in New Zealand."

Could do a lot more

We were extremely disappointed in the response we received to a questionnaire that invited 20 New Zealand retailers to outline what they're doing to improve labour standards and environmental practices in their supply chains. We covered outlets ranging from fashion designers (Kate Sylvester) to major clothing chains (Ezibuy) and large retailers with a clothing section (Farmers).

Only 5 retailers responded (see Kiwi brands and retailers).

Why ethical clothing?

Our current retail practice is described as one of "fast-fashion" by clothing campaigners. What this means is that we buy cheap clothes that are only meant to last a season. So our retailers turn to their suppliers and demand new clothes. Shorter lead-in times and lower costs are passed down the supply chain until the pressure is borne by the worker in the factory, the farmer in the field.

This chain reaction is called "the race to the bottom", where suppliers look for factories that can offer the shortest production times at the cheapest price.

Clothing campaigners argue that consumers can reverse the race to the bottom. If we demand that retailers stock only clothes made under ethical conditions and if we change our buying habits, then the lives of clothing manufacturers in developing countries will improve.

Many retailers note the contradiction between consumers who want cheap, up-to-date clothes and improved labour rights at the same time. Fashion Industry NZ chief executive Mapihi Opai told the New Zealand Herald: "we know consumers are concerned about sustainable clothing. But when it comes to spending money, it's still a question mark."

A small price to pay

The cost of labour when compared with a garment's final retail price is low. According to the International Consumer Research and Testing Organisation (ICRT), a 400 percent increase in benefits to workers is theoretically possible for only a 4 percent increase in price. "A major retailer selling products at this slight premium, on its ethical credentials, could transform the market."

How? The price structure for a pair of jeans looks like this:

worker: 1 percent
fabric and manufacturer: 12 percent
transport and packaging: 13 percent
brand, administration and advertising: 24 percent
retailer and GST: 50 percent.

The difficulty is making sure the 4 percent extra paid by the consumer makes it back through the supply chain to the workers. Demand for supply-chain transparency has led some major clothing companies (Nike, Reebok, Levi's and Timberland) to publish the addresses of all their supplier factories.

Ethical clothing in practice

You'll find that many clothing companies now publish a "code of ethics" that's circulated through their supply chains. Campaigners argue that this isn't enough without independent auditors to monitor the use of codes in factories. So some companies - including New Zealand's The Warehouse - now employ specialist international auditors.

Campaigners claim that fraud is a major problem in social audits. And it's also easy to pull the wool over the auditor's eyes. The International Consumer Research and Testing organisation (ICRT) was told by one Indian worker on piece-rate pay: "Whenever social auditors come to this factory, we are given a holiday."

Auditing an international supply chain is a massive and costly task. There may be many different components, different factories and complex layers of importers, contractors, sub-contractors and home workers in an international supply chain. Levi's jeans, for example, are made in 740 factories in 53 countries.

Some companies try to strike a balance between clothing campaigners (and some consumers) and economic considerations. Contradictions result. Oxfam International applauded Reebok for improving trade union rights in Asia, only to find that Reebok strongly opposed the establishment of trade unions in its US distribution centres.

Increased costs

On top of this, ethical clothing costs more to source. New farming techniques and fabrics require effort and investment; and switching to ethical factories can rack up costs. Even companies with small supply chains find it hard.

Kiwi fashion designer Kate Sylvester stated in a 'Sunday Star Times' article ethical production "is enormous, like Pandora's Box. You lift the lid a little bit and all this stuff comes roaring out. If we were to say overnight, 'OK that's it; we're going to be completely green and ethical', the business would go under."

Attention to detail

Many businesses make a small nod towards ethical fashion such as a supply-chain code of conduct. But how do you know if a company is committed to sustainability? The answer is in the details.

In 2007, Untouched World was invited to attend United Nations' workshops in Germany as an example of corporate sustainability. The company has since been awarded a UN certification.

Untouched World's story isn't one of overnight success. Its "ecopossum" material (a blend of wool and possum fur) was first used by the company in 1992. Sixteen years later, owner Peri Drysdale still pays a premium for wool from select stations that don't use mulesing to prevent fly-strike (mulesing is a painful process that cuts wool and skin from a sheep's hind-quarters).

As for the possums - it's an elegant use of a pest.

The same attention to detail stretches from the materials used by Untouched World to the small group of factories in Portugal and China that make around 5 percent of the company's clothing (the rest is manufactured here).

The decision to manufacture clothes overseas isn't taken lightly. Recommended off-shore factories are visited personally. They're then used on the condition that Untouched World's management is allowed unscheduled and chaperone-free access to all factories and staff.

And that's the point. "It's important to get past the concept of sustainability as an added extra to an organisation and move the concept into the DNA of the organisation."

Cotton co-ops

There's a factory in Calcutta that can pick out Winton, New Zealand (population 2100) on a map. Every few months, it ships organic cotton T-shirts north to England where they're sold in Marks & Spencer department stores. But a small order of T-shirts is boxed and dispatched south to Winton.

Winton-based Micah Clothing opened in December 2007. Owner Darren Frazer studies international development at Massey University and he decided to start a Fairtrade certified clothing company after learning about lousy working conditions in the international rag-trade.

Darren spent 6 months researching cotton suppliers for his clothes. Eventually, the Fair Trade Association put him in touch with a cotton co-operative in India.

Nature Spot also sources cotton from a Fairtrade certified farmers co-operative in India. Nature Spot's in its second year of production. The company sells only certified organic cotton garments. Like Darren, owner Isha Fichadia pays a premium to a co-operative to guarantee both farmers and workers receive fair wages.

In return, the co-operatives adhere to environmental standards that restrict the use of agrochemicals. Fairtrade inspectors also monitor labour standards where the garments are made. Isha says paying a premium for Fairtrade organic cotton, as well as using recycled paper for stationery and packaging, means her profit margins are small. That doesn't deter her: every year she flies to Bangalore to see how her co-operative has progressed.

Darren struggles with supply and demand. There's a limited supply of Fairtrade organic cotton - and so shipments must be ordered well in advance. That means it isn't always possible to cater for large or unexpected runs. "I think that I can make money - but that isn't the reason I started this company," he says.

How much for your soul?

You can pay more for organic or ethical clothes. When Consumer went shopping for a plain white T-shirt, the cheapest price we found was $13 for a standard cotton tee from Hallensteins. The cheapest organic option was $22 from Micah Clothing.

Conscientious shoppers say that there are other ways to view the "cost" of the ticket price. For example, you may want to reduce the environmental cost of producing standard raw cotton (the pesticides used). Or you might see the extra you pay for a Fairtrade certified T-shirt as money that's finding its way back to the cotton grower.

Untouched World's Peri Drysdale also recommends that you look at the cost of a garment against its usable life. Is a $40 shirt that falls apart after a few months really value for money? How many 'wears' did you get from it?

Kiwi brands and retailers

In October 2007 we asked 20 New Zealand retailers what they were doing to improve labour standards and environmental practices in their supply chains. We got only 5 replies. Nine months later we revisited those 5 to see how they had improved manufacturing processes. Details are noted below.

We asked British magazine 'Ethical Consumer' what they thought of the low response to our survey:

"What are retailers saying if they refuse to engage with their stakeholders (that includes their customers) by not giving info when it's requested? It's disrespectful of their customers and obstructive of efforts to create change for the better."

The companies that responded:

Icebreaker

Icebreaker provided a good outline of its efforts to make sure manufacturing processes were ethical. This information is available on its website. A short documentary on Icebreaker's supply chain is also available on the website.

We say

From the information Icebreaker gave us about its monitoring of environmental and labour standards, a garment bought from Icebreaker should qualify as a piece of ethical clothing. Icebreaker wants to launch a "traceability" system in 2008, where a consumer will be able to trace individual garments back to their original sheep station. We hope Icebreaker includes in the system the name and address of the Chinese factory where the garment is made.

September 2008 update

Icebreaker released its traceability system as promised. The "baa-code" allows you to trace the creation of your Icebreaker garment through the manufacturing process (in China) to the merino station where the wool was sourced. The system works because Icebreaker is able to keep track of merino wool batches through its supply chain. You can type the number into the company website to see how your garment was made.

The Warehouse

The Warehouse publishes a reasonably candid report about ethical standards in its supply chain. The 2007 report is available online at www.thewarehouse.co.nz. In addition, The Warehouse also let us interview sustainability manager Trevor Johnston.

We say

The Warehouse's supply chain is large and complex - much like a major international retailer.

The Warehouse uses many of the same corporate-responsibility systems practised overseas. It publishes online a set of workplace standards, employs international auditors (for factories that produce goods solely for The Warehouse) and so on. But its size makes it difficult to audit the entire supply chain.

Trevor Johnston says: "Of course there will be factories unknown to us that don't meet our standards and conversely those that do. We try to minimise the risk by focusing on larger factories where we have both influence and exposure."

September 2008 update

The Warehouse is about to publish its "Society and Environment Report". In it, you'll find The Warehouse audited 111 factories in 2008. It now has a pool of over 250 audited source factories. Fifteen factories were struck off in the last year for failing to meet the retailer's labour standards. The Warehouse also dabbled in a line of organic cotton T-shirts - they should be available again this summer.

Postie+

Postie+ provided a small amount of information about its efforts to improve labour practices in its supply chain.

We say

Postie+ is considering more ethical practices - including an audit programme of its supply chain - in the coming year. It could start by approaching organisations like Oxfam and the Sustainable Business Network for advice. Working alongside independent non-governmental organisations is one benchmark for ethical trading standards.

September 2008 update

Postie+ has an audit process in place: factories in the supply chain are visited at least every two years. Postie+ recently developed "terms and conditions of trade" as well as a quality-assurance manual. Both documents set out the company's stance on labour standards. That's a start: Postie+ will be putting its new standards online.

Esprit

Esprit provided brief answers to most of our questions.

We say

Esprit runs two environmental compliance programmes. One programme is based on local environmental standards and is worth very little in our opinion; the other is much better because it monitors environmental standards to ISO14000 - a recognised international standard.

Esprit's membership in the BSCI (Business Social Compliance Initiative) - and its refusal to source clothing from Burma - offers assurances that labour rights are respected in its supply chain. But Oxfam Hong Kong (Esprit is based in Hong Kong), awarded the company a paltry 10 marks out of 100 for supply-chain transparency in a 2006 report. Esprit disputes Oxfam's report. A new report is due later in 2008.

September 2008 update

Esprit has put money into campaigns to help victims of natural disasters (for example, those caught in the Sichuan earthquake). But as we pointed out above, Oxfam Hong Kong had criticised the lack of transparency in Esprit's supply chain. According to Oxfam, a new report is due out in either November or December 2008. We'll keep you posted.

Barkers Men's Clothing

BMC answered all sections in our questionnaire - but some answers weren't detailed.

We say

From the information supplied, BMC considers labour and environmental standards in its supply chain. We note that the company visits all overseas source factories every second year. BMC also sells 4 different T-shirt styles made from certified organic cotton.

But we didn't receive enough information to properly gauge ethical standards in BMC's supply chain. The company stated: "Barkers considers itself to be a good, fair and ethical employer ... though there is always room for improvement." We think BMC could improve its supply-chain transparency.

September 2008 update

Barkers sold 4 lines of organic cotton tees when we last looked. We're happy to report there will be 8 lines this summer. The company cites two labour-standard developments in its supply chain:

Barkers' main supplier has begun auditing source factories through an independent organisation called Li & Fung Limited.
China passed a new labour law designed to give workers greater job security in January this year (although 'The Economist' magazine, among others, calls the new law a "sop").

The rest

The 15 retailers that didn't respond to the questionnaire; or who told us that they were not interested in taking part were:

Ballentynes (the clothing chain)
Cue
Ezibuy
Farmers
Glassons
Huffer
JacquiE
Kate Sylvester
Levi Strauss
Macpac
Max
Rodd and Gunn
Swazi
Sussan
World

Our view

Retailers

Companies should know where the clothes they sell are made, and they should have access to the source factories. The leading ethical retailers publicly disclose the addresses of their source factories and work alongside clothing campaigners to improve labour standards at these factories. We think Kiwi retailers should do likewise.
We'd like to see more companies carrying organic cotton and fair-trade products (approved to international standards). This would allow consumers to decide whether it's worth the extra cost to make sure the clothes on our shelves are ethical.
Increasing wages to workers in some cases may not mean a major increase in the costs of clothes - not much more than 4 percent says the International Consumer Research and Testing organisation (ICRT).

Consumers

Buy good-quality timeless clothing. Look at each purchase as a long-term investment rather than a disposable one-season item.
You'll find a massive range of ethical clothes online. While the New Zealand dollar is strong, look at UK websites like Adili or US labels such as American Apparel.

More information

Ethical clothing information:

Retailers

More from consumer.org.nz

Ethical investing

Report by Luke Harrison