Pressure by big brands on suppliers to deliver more quickly and cheaply contributes to labour abuses in factories that manufacture garments, footwear and textiles, according to a report published on Wednesday.
More than half the suppliers surveyed were affected by cost negotiation strategies that cut into their profits, according to the report by Better Buying, a Delaware-based group that rates purchasing practices of brands and retailers.
Suppliers, in turn, put pressure on workers, leading to abuses, according to the research, which was funded primarily by the C&A Foundation, a funding partner of the Thomson Reuters Foundation for human trafficking and slavery coverage.
The impacts on workers include excessive overtime, underpayment of benefits, insufficient wages, and use of unauthorized sub-contractors, said Doug Cahn, a Better Buying co-founder.
“Understanding and reducing the negative impacts of purchasing practices is the missing link in the movement to ensure decent conditions of work in supply chains,” Cahn said in an email.
The index included ratings from 319 suppliers across 38 countries and measured the performance of 67 retailers and brands, including Esprit, Nike and Gap.
Supplier ratings indicated that one third of buyers did not pay bulk order invoices on time, according to the report.
More than 20 percent of the orders received from retailers or brands were not priced to cover the cost of social, environmental, quality, and other compliance requirements.
“These practices create challenges for suppliers to pay their workers adequately and on time,” said Jill Tucker, Head of Supply Chain Innovation & Transformation at the C&A Foundation.
“We hope that with type of insight, buyers will change their practices in a way that make it possible for benefits to trickle down to workers.”
Pressure to deliver quickly has prompted the Tirupur Exporters Association to request workers in India’s textile hub in Tamil Nadu state to take only one or two days off during the upcoming Diwali festival, rather than the entire week.
“The peak manufacturing season clashes with two big festivals – Diwali and Pongal,” said Raja M Shanmugham, the association’s president.
Diwali, a Hindu celebration of lights, falls on Nov. 6 and 7, but workers traditionally take the whole week off, while the harvest festival of Pongal is in January.
Buyers will cancel orders if deliveries are delayed, putting financial strain on suppliers, Shanmugham told the Thomson Reuters Foundation by phone.