With fewer protections and less means to adapt, women are disproportionately affected by economic shocks. Perhaps nothing more greatly exposed this than COVID-19.

For those working in the fashion industry, it was garment workers that were most affected as brands canceled approximately US$40 billion in orders to stave off immediate losses. Beyond the immediate industry response, as noted by the ILO, lower consumer demand, government lockdown measures and blockages in the import of raw materials contributed to a significant decrease in exports from garment-producing countries. Thousands of factories have closed either temporarily or indefinitely.

Faced with the economic challenges of COVID-19, Denica Flesch, Founder of SukkhaCitta admits that it would have been easier to quit, but instead, she pushed through. SukkhaCitta was founded on the principle of ending exploitation of artisans and seeks to make “meaningful clothes” by applying sustainable and ethical principles in production and by investing in the empowerment of the women who make their clothes. In 2020, SukkhaCitta focused on innovation – adjusting production to match demand, such as switching to making masks, selling Heirloom dolls made from traceable cotton to raise funds for community projects and even exploring new natural dyes to keep evolving their designs. Most important was to maintain a living wage for the 1,282 people that rely on them for their livelihoods. What followed were the hardest 10 months for the brand, and the crisis is not over yet. But as Ms. Flesch states; “While millions of women care for their families through handmade fabrics, the way the system currently works keep her in poverty. Through layers of factories and middlemen, she's kept small and invisible. We're here to change that.”

But the approach taken by SukkhaCitta was not common across the industry. With the majority of garment production in Asia (65 million garment workers, mostly women), the region was particularly impacted by the cancelation or orders. By March 2020, millions were already affected, with many sent home without their paychecks or severance, and without knowledge of when they could return to work.   

The difficult situation imposed by the brands, forced governments to step in. Governments have had to identify and prioritize aid based on urgency, while also ensuring continued public services. All this against finite resources during difficult economic times.

In response to COVID-19, UNDP launched a Rapid Financing Facility to support countries with urgent socio-economic challenges. From garment producing countries, requests for support reflected the impacts on the fashion industry. These included support for social protection measures, identification and generation of green jobs and legal aid related to workers’ rights — with emphasis placed on the disproportionate impact of the pandemic on women and the need for targeted interventions. UNDP’s Protecting Women’s Livelihoods in Times of Pandemic has called for a shock-resistant, unconditional Temporary Basic Income (TBI) to help secure basic needs and compensate for job and income losses, as well as to boost women’s economic independence.

The crisis is bringing to the fore the urgency of a committed discussion on social, institutional, and labour market reforms for the unambiguous and permanent improvement of women’s income generating capacity in the long term.

– Protecting Women’s Livelihoods in Times of Pandemic, UNDP

The difficulties faced by garment workers was immediately recognized and communicated widely by sustainable fashion activists, journalists and authors, such as Elizabeth L. Cline. I spoke with Ms. Cline about what is needed to better protect workers going forward and the response to the cancelations.   

It is clear that change is needed. Where do we start?

Elizabeth L. Cline: Any reform must start with greater corporate accountability and putting strong democratic and binding systems back in charge of globalization and trade. Fortunately, I see a wave of change coming to advance these systems of greater accountability. There are laws being proposed globally to hold brands accountable for human rights abuses in their supply chains, including in Germany (and hopefully soon across the EU). In California, a novel bill called the Garment Worker Protection Act aims to hold brands jointly liable when there is wage theft in their factories. And of course, labor rights advocates hope to see binding agreements in the private sector between unions, brands and suppliers. Historically these kinds of agreements have gone the furthest to raise working standards because they give workers the most immediate access and the largest stake in improving their own conditions. For this work to be truly transformative, we need to rein in unethical business practices while pairing these new rules with incentives, grants and investments that reward companies for doing things the right way.

To ensure decent work and economic growth, corporate investment must be aligned with the sustainable development ambitions of the partner country. Brands’ Corporate Social Responsibility (CSR) standards and Environmental, Social and Corporate Governance (ESG) targets are meant to provide an indication of values in these areas, and even a blueprint for how companies will ensure that ambitions are backed up by actions.  Perhaps confusing to consumers is that the response of brands to cancel orders did not reconcile with these ambitions.

What happened?  What is keeping brands from fully integrating their ESG targets throughout the value chain?

Elizabeth L. Cline: It’s time for us to stop looking for so many solutions to social problems in business and look instead to the labor movements and our democratic institutions. Corporations have a pretty narrow function, which is to grow profits and satisfy shareholders. They are not optimized to, nor should we put them in a leading role of, protecting labor rights or the environment. Corporate CSR and ESG can of course have some benefits, but it has to be balanced with regulations, strong democratic institutions that are accountable to the public and enforceable agreements that fully protect people and the planet. CSR in particular can tip into serving as reputation management for corporations and can even have negative impacts like pushing social and environmental compliance onto suppliers without paying more for products. The system is just broken. If we really want to make the fashion industry fair, the companies that sit atop it need to be accountable, transparent and responsive to the public. We need to create laws, institutions, and leaders who set out to give workers and suppliers more leverage, more rights, and more power.

In this case, many companies were indeed held accountable, but it was not through labor regulations or protections.  Where corporate citizenship failed, social pressure succeeded. The #PayUp campaign used social media to expose brands that canceled orders in response to COVID-19 and resulted in US$20 billion in redeemed orders – an incredible accomplishment and a lifeline for many factories, and therefore garment workers.

How has #PayUp benefited factories and workers?

Elizabeth L. Cline: #PayUp helped to recoup an estimated US$20 billion in money owed for orders that went directly back to factories and thus to garment workers, many of whom are young women supporting families and living paycheck to paycheck. #PayUp’s work was absolutely crucial in getting factories cash flow to cover payroll and to keep garment workers’ employed during the early months of the crisis. Ensuring that money was settled helped in part to avoid massive wage theft and a humanitarian crisis, at least at the offset of COVID-19. Honestly, one of the most validating moments was when the money #PayUp won back showed up in trade data parsed by the Center for Global Workers’ Rights; we could see the money that was missing but could also confirm that billions got back to factories. #PayUp brought together hundreds of thousands of consumers, labor rights activists, and garment workers around the world to fight for basic decency and ethical business practices during the pandemic. It was an extraordinarily successful campaign, and I can’t wait to see what this novel coalition accomplishes next.

“The impact of the pandemic is really real economically. In the nearby city of Pekalongan that’s famous for handmade textile, orders just dried up. Everything was cancelled, and within months more than 11,000 artisans lost their jobs. We were scared. We didn’t know if the same fate would happen to us. When you (Ms. Flesch) called us and told us that everything was gonna be fine, that we’ll work together through this, I cried.”

–       Ira Fuadi (cooperative leader, producing handwoven fabrics for SukkhaCitta)

The decision by brands to cancel orders on such a large scale showed that workers were undervalued, and their needs overlooked. Legislation and protections are needed, as is greater transparency to ensure compliance. And as standards increase, financial and technical support along the supply chain will be needed so that these higher standards can be met. Perhaps nothing sums up why as this from Ms. Flesch, “We are being born into a new normal, with a chance to redefine what it means to be human.”