Likes of Gap, H&M, doing more to ensure ethical sourcing from India

India’s widespread labour abuses are well documented, including terrible working conditions, pitiful wages and even slavery. Anindito Mukherjee / Reuters

Global brands are increasingly striving to ensure that their suppliers in India follow regulations to protect the rights of workers in factories and on plantations. But India still has a long way to go to solve many of its labour issues in its role as a key sourcing market for many international firms, experts say.

India’s widespread labour abuses are well documented, including problems such as child labour, terrible working conditions, pitiful wages and even slavery.

The “watershed” event that brought the issue of exploitation and poor working conditions in the region into sharp focus was the factory fire in the neighbouring Bangladesh in 2012, in which 112 workers were killed, says Ankur Bisen, the senior vice president at Technopak, a retail and consumer products consultancy firm based in New Delhi.

The factory had been producing clothes for global companies including Walmart. The devastating incident put pressure on international brands to crack down on poor working conditions faced by those employed by their suppliers worldwide.

“Before that, even international companies, retailers and brands used to take a ‘convenient’ approach and overlook these issues,” says Mr Bisen. “After that, there’s been a lot of realisation by international brands that this issue can not only disrupt the business but in the long term it can seriously harm the reputation of the brand.”

This has resulted in Indian suppliers having to comply with measures more strictly enforced by major global brands to meet “ethical sourcing” norms, to protect workers on matters including child labour, working conditions and minimum wages.

The Swedish clothes retailer H&M says that it has strict standards in place for working conditions in countries from which it sources its goods. It sources products from a number of factories in India.

The retailer says it only works with suppliers in India that have signed its code of conduct, which covers areas including a ban on child labour, health and safety conditions, and workers’ rights.

H&M creates jobs for more that 1 million people in the countries it buys goods from.

“Factories must work towards full compliance with the code and we conduct regular audits to assess their level of compliance,” H&M says. “We can easily visit factories to educate workers about their rights. We’ve already done this in India.”

Customers are also becoming more socially conscious and demanding about ethical standards when it comes to the products they are buying, adding to the pressure on companies to tighten their sourcing regulations.

Mr Bisen says that major global brands have put teams in place on the ground and have sourcing offices in India to ensure compliance with these ethical standards. They also use the services of independent agencies to carry out checks on factories.

“Brands have also formed associations and retailers exchange notes and meet often to identify issues or raise red flags, either in a region or a specific factory,” he says.

In India, the government in May permitted children under 14 to be employed in family businesses or the entertainment industry but banned child labour in all other sectors. Stricter punishments were also put in place for violations of these laws. The law previously prohibited children under 14 from working in certain hazardous industries.

India is also an important sourcing market for Gap, the San Francisco casual clothing company. It has sourced products for decades and the country is one of its 10 biggest sourcing locations globally.

“Gap has worked in an effort to build meaningful relationships and responsible practices with our vendor partners,” the retailer says. “In 2007, Gap launched the personal advancement and career enhancement workplace education programme in India. The programme offers female garment workers the life skills education and technical training they need to advance at work and in life. Currently 25 of the 64 manufacturing facilities that participate in the programme are based in India.”

Despite these efforts by global brands, there are still a number of problems with labour conditions when it comes India supplying firms worldwide.

“A number of times transparency is sacrificed in the name of costs, fast deliveries and sometimes the work gets subcontracted to different companies,” says Shailini Sheth Amin, the founder of Moral Fibre, a company in the state of Gujarat which produces handcrafted fabrics and focuses on ethical production of its goods and treatment of its workers. “Sometimes when you really go back, it’s a bit uncertain and you don’t know exactly where the production is being done.”

She explains that there is an entire chain of workers involved in the production of a garment beyond the factories, including the farmers who grow the cotton, the production of fabrics. These individuals are largely ignored when it comes to the ethical sourcing regulations put in place by global brands.

Many international companies are doing a lot with regard to ethical sourcing but “there are so many other companies that don’t”, says Ms Amin.

Cividep is an NGO in Bangalore which is striving to improve conditions for workers in garment and electronics manufacturing and in plantations.

Among its projects, it is working on reducing harassment of women in garment factories and improving employment conditions for coffee and tea plantation workers.

Cividep says that there are “a number of suicide attempts by women workers and continuous harassment in garment factories”.

“In the last few years, the garment industry in Bangalore has seen a steady rise in the number of migrant workers from north Indian states. These workers are housed in hostels by the employing companies under conditions akin to modern slavery,” says Cividep. “The fact that these young women are outsiders with no knowledge of the local language and little or no social capital makes them especially vulnerable. They are not able to advocate for their rights effectively, and are often not even aware of what these rights are.”

Gopinath Parakuni, the general secretary of Cividep, says there is “still a long way to go before any of these brands or multinational companies can really claim that their businesses are ethical”.

There have been some steps in the right direction by global brands when it comes to sourcing more ethically from India “but a whole lot of it is public relations”, he says.

There are “large-scale human rights violations” in garment factories, including violence against the largely female workforce, says Mr Parakuni. On average, the workers are paid just 260 rupees (Dh14) a day, he says.

“The factories look better but there are problems with the relations between the labour and the management and wages are nowhere near what we might call a living wage,” he says.

In electronics factories in India supplying major global brands, there are various health and safety issues, including use of chemicals that are hazardous to workers, he adds. While large global firms may have the financial resources to back ethical sourcing practices, this can be more difficult for less affluent companies.

“Let’s say that a brand is not doing well, they may take more of a lax approach to sourcing,” says Mr Bisen. “The pecking order of brands who ensure ethical sourcing keeps on changing depending on how they are performing in the market. Small retailers don’t have the wherewithal to put in money and resources to check … and so some of these brands may be susceptible to unethical sourcing standards.”

In addition, there are certain areas, particularly related to the environment, that still need work.

“In the apparel industry, a lot of the ethical standards concerns climate change, water usage, dyes’ chemical compositions,” says Mr Bisen, explaining that in some cases these are being less closely adhered to,

Ultimately, there remain challenges in India surrounding minimum wages and child labour, and safety of work environments, which need to be addressed at a government level, he adds.

“To say that it is the responsibility only of the brands is escapist for the policymakers and the Indian government. At the end of the day, it is the responsibility of the government and the citizens from where the sourcing is happening to ensure that the rules are enforced.”

Follow The National's Business section on Twitter