Know the Chain says companies should join forces to eradicate forced labour across corporate leather supply chains

Know the Chain says companies should join forces to eradicate forced labour across corporate leather supply chains

Publicly available information reveals very little on how - apart from auditing suppliers – brands and retailers address forced labour risks in countries where they produce hides, process leather, and manufacture leather goods. However, German sportswear giant Adidas marks the exception, new research shows.

A case study by 'Know the Chain' – a resource for understanding and addressing forced labour abuses in the supply chain – assessed how a sample of five footwear companies and five luxury clothing brands address forced labour risks across their leather supply chains.

The study follows Know the Chain's first apparel and footwear benchmark, which found a lack of transparency and action to address forced labour abuses beyond first-tier suppliers, particularly in leather. Its research found company action at the commodity level was inconsistent with, for example, cotton receiving greater attention than leather.

Now, the group says companies should join forces to eradicate forced labour across corporate leather supply chains. It also calls for brands and retailers to adopt the concept of saliency of the UN Guiding Principles on Business and Human Rights and look at human rights risks through the "lens of risk to people, instead of risk to business".

"Forced labour risks are often hidden," it explains. "Therefore, Know the Chain asked companies what practices they had in place to address forced labour in countries with known risks, such as Brazil and China, as well as in other countries where companies might have identified such risks."

According to the group, companies disclose "little to no information" explaining how they work in high-risk countries. Where examples are disclosed, they usually refer to broader labour practices. Adidas was the only company that provided concrete examples of how it addresses forced labour risks in high-risk countries.

As part of its Modern Slavery Outreach programme, the German sports giant trained tanneries in Taiwan and China on forced labour indicators and how to address and manage these risks. Further, to address forced labour risks in its leather and rubber supply chains, the company is developing multi-stakeholder partnerships and collaborations with the Fair Labor Association, International Labour Organisation, civil society groups, and other brands. Through these collaborations, it aims to reach second-tier leather tanneries in China, Indonesia, and Vietnam, and third-tier leather hide suppliers in Brazil and Paraguay.

Adidas also requires its Brazilian leather suppliers to ensure that leather only comes from cattle raised at farms that meet the requirements of Brazil's National Pact on the Eradication of Slave Labour. Suppliers on the "Dirty List" (i.e., those listed by the Brazilian Ministry of Labor as employing workers in slavelike conditions) are to be suspended immediately. Lastly, Adidas has engaged JBS, the largest global meat processor, to explore the role of multinational meat processing companies in driving responsible labour standards at slaughterhouses and tanneries.

According to Know the Chain, footwear companies have often developed extensive due diligence systems and transparency in the first tier of their supply chains. While action below tier one is limited, the study found some companies extend some of their practices down to tier three.

Apart from China's number-one shoe retailer, Belle International, all footwear companies analysed disclose the names and addresses of their first-tier suppliers. Puma and Timberland also disclosed names and addresses of second-tier suppliers, but information on tier three is limited, with Adidas the only footwear company in the sample that discloses key sourcing countries of third tier suppliers of bovine hide.

Other highlights include US sporting goods behemoth Nike for providing "very detailed" information on the workforce in the first tier of its supply chain, indicating it has a good understanding of whom the workers are and the potential risks they might face. For each first-tier factory, Nike's supplier map includes the total number of workers, the number of line workers, the percentage of female and migrant workers, as well as the average age of workers. Nike is also the only company that provides a company contact details, although this practice is limited to factories that manufacture licensed collegiate products.

In addition, Puma requires its suppliers to source most of its leathers from nominated tanneries which are included in the company's compliance programme, while VF Corp (Timberland) discloses that its Ethics Helpline is available to supply chain workers and their communities in tiers two and three and that suppliers' workers have used the mechanism. VF reports that during audits it checks if suppliers have effective grievance mechanisms in place.

Meanwhile, Know the Chain said luxury clothing brands disclose "limited details" on their suppliers and supply chain due diligence. That said, where companies have some disclosure in place, the group added it often includes information beyond the first tier of their supply chains. PVH (Tommy Hilfiger and Calvin Klein), Kering (Gucci, Bottega Veneta, etc.), and Prada provide some transparency on their leather supply chains by disclosing their main first-tier supplier countries.

Notably, Hugo Boss discloses a first-tier supplier map that not only includes the number of suppliers and product categories by country, but also the social audit results by region. None of the luxury clothing brands analysed disclose supplier names, Know the Chain said, "let alone addresses or contact details of the person legally responsible for a given factory". However, at the same time, the companies often do provide some transparency on their supply chains beyond the first tier, with Kering (Gucci, Bottega Veneta, etc.) disclosing information down to tier three.

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