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News - The Partnership for Sustainable Textiles (Textiles Partnership)

01 June 2022 Stronger criteria needed: A look at problems and gaps in the Green Button and Textile Alliance

In view of a legal regulation for large companies to comply with their due diligence obligations from January 2023 (Supply Chain Due Diligence Act, LKG), the question arises as to what role voluntary measures such as the Green Button or the Alliance for Sustainable Textiles (Textile Alliance) could have in the future.

FEMNET, together with about 130 other NGOs, has strongly advocated a supply chain law that was finally adopted by the old federal government in July 2021. The law was heavily watered down due to the influence of business associations. The draft of the EU Commission for a law at European level is more far-reaching, at least for the companies that are covered, and there should also be a legal remedy for those affected. But at least: As of 2023, there is a legal obligation for companies in Germany to exercise their due diligence obligations in their supply chain. This legal basis provides the foundation on which voluntary initiatives such as the Textile Alliance or the Green Button can build.

The textile alliance

Following the collapse of the Rana Plaza building in Bangladesh in April 2013, Federal Development Minister Gerd Müller launched the ‘Alliance for Sustainable Textiles’ – also known as the Textile Alliance (TB) for short – in 2014 with the aim of jointly improving social, environmental and economic conditions in textile production, from the cotton field to the hanger. The Textile Alliance is a so-called multi-stakeholder initiative with 125 members. About 70 clothing companies, 15 associations, but also the DGB, seven standard organizations, the Federal Government with three ministries and 16 non-governmental organizations (NGOs) are currently participating in it. Companies voluntarily commit to a so-called ‘review process’, in which they demonstrate every two years how they perform their due diligence throughout the supply chain. For this purpose, each member company publishes a report, a so-called roadmap. This review process corresponds in large part to what the future LKG requires of companies. Companies receive support and advice in the TB regarding the implementation of due diligence obligations, so that they are optimally prepared for the LKG. In addition to this individual commitment, the TB carries out projects in the producing countries on various social issues (improving working conditions in spinning mills, living wages, transparency, gender-based violence in the workplace, complaint mechanisms) and environmental issues (wastewater, chemical and environmental management).

NGOs that participate in the Textile Alliance, such as FEMNET, keep discussing whether the effort is worthwhile in the face of meager progress. After seven years, there is still almost no living wage paid in any country of production. Only 13 out of 70 member companies participate in an initiative to raise wages. Only 25 out of 70 companies disclose their supply chain. An impact measurement failed due to the fact that not enough companies participate in it. An evaluation of the information provided by the companies in their roadmap on the subject Gender-based violence in the workplace by FEMNET This shows that many companies are still very much at the beginning when it comes to gender-based violence. Seven years of the Textile Alliance have not yet led to widespread measures that would effectively remedy the risk. The objectives and measures of the roadmaps cast doubt on the fact that this will change for the majority of companies by 2023. The review process lacks sufficiently clear guidelines on how companies must monitor and report on the impact of their measures.

There are small successes in the textile alliance: The revised ‘Review process provides a much better basis for mapping the state of implementation of due diligence obligations for member companies. On the positive side, it looks at all 11 sector risks and all supply chain stages. The publication of the roadmaps is a success, anyone can read them on the website. There are some companies that work constructively and want to make a difference themselves, but they are in the minority. The different levels of ambition of the companies are not accessible to consumers or the interested public, because the textile alliance also lacks an evaluation scheme in its review process. One cannot at first glance recognize pioneers and laggards. Such transparency, however, would distinguish committed companies and at the same time be an incentive for others. This is why civil society in the Textile Alliance calls for an assessment grid based on guardrails and targets in order to make clear the level of ambition and progress made by companies on each of the 11 risk topics in the textile sector (so-called sector risks).

Corresponding improvements and greater commitment are hampering, in particular, the associations that represent the lowest common denominator of companies in the control group. So the process is often frustrating for the NGOs and it is questioned again and again whether the commitment is worthwhile.

But there are also a few good approaches: For example, there are alliance initiatives such as the one to test a complaint mechanism, but unfortunately only three companies (see Oliver, Seidensticker, Esprit) participate in it. FEMNET was able to initiate an alliance initiative in the Indian state of Tamil Nadu, in which four companies (Tchibo, Otto, KiK, Hugo Boss) and the BMZ participate. The aim is to improve the situation of young girls between the ages of 14 and 18 in the spinning mills. The girls are held there like slaves and work at extremely low wages for up to 12 hours, including at night. With the help of local NGOs, committees against sexual violence have so far been set up in spinning mills. At the same time, a dialogue between NGOs, companies and the government was initiated.

Green button

The Green Button (GK) created by the BMZ in September 2019 is a state metaseal and meets the need of consumers to get more insight into the cash jungle for textiles. It is a meta-seal that evaluates both the product and the company. The business valuation includes an assessment of whether the company is complying with its human rights and environmental supply chain due diligence obligations – an obligation that the new Supply Chain Act also requires large companies to comply with as of 2023. By also examining the company and its purchasing policy, the GK goes beyond the usual product seals. This combination of company audit and product seal is generally welcome.

However, the Green Button is only credible if its criteria are sufficiently demanding – and this is currently not the case. So far, the seal does not cover the entire supply chain, but only the last stages of processing: Fabrication and wet processes such as washing and dyeing. The catastrophic conditions in the spinning mills, for example, are not covered, not even child labour in the cotton harvest. In addition, so far only the payment of a minimum wage is guaranteed, not that of a living wage. In most producing countries, the statutory minimum wage is far below the wage that would be necessary to secure livelihoods. In general, it must be assumed that the statutory minimum wage for clothing in most countries of production is two to three times lower than a living wage.

In September 2021, the GK celebrated its two-year anniversary. At that time, according to the BMZ, 78 companies – a tripling of the number since 2019 – held the seal and 150 million textiles with GK were sold. Caritas, Diakonie are large customers for hospitals and nursing homes, Deutsche Bahn equips its 43,000 employees with them. However, major international fashion brands such as H&M, Zara or C&A are not yet part of it, and the label is too ‘German’ for them.

Green Button 2.0 company audit

The BMZ intends to further develop the GK into GK 2.0 and has developed a proposal for this. The final version will be published at the end of April. In 2021, there was an opportunity to comment on the proposal, involving 45 participants from different stakeholder groups, including FEMNET.

Although GK.2.0 plans that companies should know their entire supply chain for their risk analysis and complaint systems, the initial audit only requires more detailed knowledge of assembly and wet processes, only in the monitoring audit after 3 years does the company have to show further progress in mapping its supply chain. In addition, no external transparency is required. So there is no obligation to publish the supplier list, not even just for the assembly. Many large companies (H&M, Tchibo, Aldi, Lidl, Hugo Boss) are already continuing to publish their supplier list on their website.

On the positive side, the use of materials and fibres is to be re-introduced into the review, so that the supply chain is to be expanded by a further stage of production, but working conditions in spinning mills or on the cotton field are still not sufficiently covered.

It is also positive that working towards living wages is called for by recording the gap between current and living wages of companies. However, the GK 2.0 still does not require the payment of living wages, not even progress in the successive increase, but only the presentation of a strategy for wage increases. This is sobering, as for many years the textile workers have been fighting for decent wages, which have even declined in the coronavirus pandemic. There have been many plans and memoranda of understanding, but implementation is still lacking.

FEMNET teamed up with Public Eye after one year of GK Reporting by 31 companies They had been there since the beginning and had already noticed in 2020 that the reports were insufficient.

Most companies reported only superficially on the risks in their supply chain and did not identify any actions they would take to address particularly central and frequent human rights violations, such as gender-based violence in factories or violations of the freedom of association of trade unions. By focusing on the issue of payment of wages in GK 2.0, such serious labour rights violations threaten to be neglected again. While in the TB companies have to address the most serious and likely problems for each individual sector risk, the GK 2.0 is expected to allow a prioritisation of particularly significant sector risks. It is therefore again possible for companies to ‘prioritise away’ issues such as gender-based violence or freedom of association.

Product testing

The products specifically identified with the GK must meet certain existing seals such as the Global Organic Textile Standard (GOTS) or the Fair Trade Seal. However, the BMZ does not check the product requirements at the GK itself. This will also be the case with GK 2.0. These seals are based on factory audits by private profit-oriented companies. Audits are known to be unable to detect certain labour rights violations, such as discrimination against women or the obstruction of trade union work. In the last 20 years, a massive social audit industry has emerged without any significant improvements in these sensitive areas.

The problem here is also that these product seals sometimes have massive gaps in human rights standards and, for example, the GOTS seal is only trustworthy in the environmental sector, but not for compliance with social standards. The GK 2.0 continues the gaps in these product seals.

conclusion

On the one hand, it is welcome that the GK reviews companies' due diligence for their supply chain. At the same time, however, the claim of the metaseal is too low. I fully agree with the statement of the scientific advisory board of the GK here: “For the legitimate discussion on the right level of ambition of the GK 2.0, a high level of ambition and a deep penetration of the supply chain should, in case of doubt, take precedence over the goal of allowing as many companies as possible to label products with the GK2.0.”

The GK advertises ‘Social. It's ecological. of the state. Independently certified’. As can be seen from the above, this statement is not true, especially not for the entire supply chain. The statement suggests to consumers that products with the GK are socially produced, but not even a living wage is paid in the supply chain, nor is there a guarantee that the product was produced without discrimination against women or other labour rights violations. The Green Button 2.0 therefore does not guarantee consumers any significant improvements in the supply chain. There is therefore a very real danger of state-sanctioned greenwashing.

Voluntary initiatives such as the Green Button or the Textile Alliance represent progress if they go further than the legal requirements or seals. At the GK, the strong focus on existing product seals with their fundamental weaknesses is a problem. In the case of the textile alliance, there is a risk that the review process will be watered down. Instead, however, the opportunity should be used to pursue a claim that goes beyond legal requirements.

Dr Gisela Burckhardt, May 2022

 

GK 2.0, 'GK 2.0'