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07 December 2023 Supply Chain Act has an impact: Fashion brands respond to indications of labour rights violations

[blocking period 08/12/2023]

Joint press release by FEMNET , ECCHR and Rosa Luxemburg Foundation.

Berlin, Bonn, Karachi. New research by the Pakistani trade unions NTUF (National Trade Union Federation) and HBWWF (Home-Based Women Worker's Federation) as well as the German human rights organisations FEMNET and ECCHR shows that in the supply chains of German companies, even the minimum wage is often not paid: The report: "No contracts, no rights: How the fashion industry is cheating its workers on minimum wages Exposes alarming labour rights violations in textile factories in Pakistan that have been ongoing for years and calls for immediate action by fashion brands. The German Supply Chain Due Diligence Act (LkSG), which entered into force on 1 January 2023, requires companies to ensure compliance with labour rights in their value chains. For this reason, the authors of the study informed those companies named by the workers surveyed, which are covered by the new law, about the labour rights violations committed by their producers in Pakistan. While many of the brands have not yet taken effective action, the law has been instrumental in ensuring that some companies now take responsibility for their due diligence obligations:

"We are pleased to see that companies are making a serious effort to investigate labour rights violations and take effective action to put an end to them. This has often not been the case in the past and shows that the LkSG is already having a positive effect. Miriam Saage-Maaß, Legal Director of ECCHR.

"We expect that even those companies that have done little so far will soon catch up to comply with the law. Otherwise, we reserve the right to lodge complaints with the competent control authority BAFA”, says Sina Marx, speaker at FEMNET e.V. and co-author of the study.

The Pakistani fashion industry is an important part of the Pakistani economy and employs around 15 million people. The study, conducted among 357 workers producing for international brands, found that little has been done to protect labour rights so far. Key findings of the report include:

1. Lack of contracts and payroll: 97% of workers said they did not have written employment contracts. 80% of workers said they did not receive pay slips, making it difficult to track their earnings.
2. Non-payment of minimum wages: More than a quarter of workers (28%) did not receive the statutory minimum wage. In 94% of these cases, no union was active in the affected factory. Many of the workers surveyed, who nominally received the minimum wage, were not (sufficiently) paid for overtime worked, received no or too little paid leave or were entitled to higher wages due to the exercise of qualified activities. Almost no worker received a living wage.**
3. Lack of social security and pension: An alarming 64% of respondents were not covered by social insurance, while only 15% had pension insurance.
4. Lack of trade union freedom: 73% of respondents reported the lack of active trade unions.

From the 22nd - 31 January 2024, members of the Pakistani trade unions NTUF and HBWWF, who carried out the study, will come to Germany to share first-hand their experiences and findings and discuss possible solutions for better implementation of labour rights and corporate due diligence with actors in Germany.Financially, the project is supported by the Rosa Luxemburg Foundation, which has already published several studies on the topic. Daniela Trochowski, Managing Director of the Foundation:

“Human rights organisations have been drawing attention to the precarious working conditions along textile supply chains for years. As an institution of civic education, we want to contribute to a broad social awareness of the conditions under which a large part of our clothing is produced. The law is an important step that must now pass the practical test.”

We very much hope that all the companies we have contacted about labour rights violations in Pakistan will respond with meaningful and effective measures, including by talking to our guests”, says Gisela Burckhardt, CEO of FEMNET e.V.

**The minimum wage for unskilled workers in Pakistan is PKR 25,000 per month at the time of the study.

More information about the Speakers Tour and the full report can be found at https://femnet.de/mindestlohn-pakistan

Contact:

Anne Munzert
FEMNET
+49 175 8465560
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Maria Bause
ECCHR (European Center for Constitutional and Human Rights)
+49 (0)30 69 81 97 97
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Alrun Kaune-Nüßlein
Rosa Luxemburg Foundation
+49 (0)30 44310-448
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