Blog: Leonie BarrieTwists and turns in Yue Yuen strike

Leonie Barrie | 28 April 2014

A strike by thousands of workers at shoe maker Yue Yuen continued with a number of twists and turns last week, including an order from Chinese officials that the firm must provide back pay for past unpaid social insurance.

The move creates an important precedent, according to observers, since unpaid social insurance is a pervasive issue in most Chinese factories - including suppliers to major international brands.

It may also have marked the beginning of the end for the two-week dispute, with Adidas confirming to just-style on Friday that its production at Yue Yuen is now up-and-running again.

The first-year anniversary of the Rana Plaza building collapse in Bangladesh coincided with the release of a new report examining major remedial plans established in the wake of the disaster. These, it says, are failing to address the greatest risks posed by the systemic weaknesses of the Bangladeshi RMG sector.

Meanwhile, the country's government lacks the resources, administrative capacity and sheer will to protect garment workers; while international brands need to recalibrate their business relationships to prioritise transparency and long-term commitment.

Without knowing the precise history of the products they sell, the apparel industry will struggle to make a real difference to issues ranging from sustainability to illegal subcontracting. So a tool piloted by M&S to great fanfare more than two years ago is now going back to the drawing board in a bid to tackle traceability across the clothing supply chain.

US clothing giant Gap Inc has set its sights on growing operating margin beyond 13%, as it looks to gain a larger share of the US$1.4 trillion global apparel market. Key to this is building a more responsive supply chain, seamless inventory, international expansion, and omni-channel capabilities.

Progress on the Trans-Pacific Partnership (TPP) continues to falter, yet many garment makers continue to ramp up their investments in Vietnam - one of the negotiating countries - despite ongoing uncertainties over the rules of origin issue.

And a number of changes over the past month to Chinese government policies on both the production and sale of raw cotton are also continuing to cause uncertainty.

 

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