News | Labour / Unions - Economic / Social Policy - Globalization - Union Struggles “Textiles Embody the Essence of Capitalism”

Sina Marx and Nadja Dorschner on the loopholes and pitfalls of Germany’s new supply chain law


 A worker operates a spinning machine at a textile factory in Suqian, China, 28 March 2023. Photo: IMAGO / VCG

Globalization, supply chains, and human rights — three things that are notoriously difficult, if not impossible to harmonize. Germany’s new Supply Chain Due Diligence Act, which came into force last January, does not do enough to change this state of affairs. It represents a start at best, by obliging German companies to improve the human rights situation along their supply chains. Of these, around 85 percent had previously declared themselves unwilling to make voluntary commitments as part of a national action plan according to a monitoring conducted by the Federal Foreign Office — blunt honesty that can be generalized to characterize the actions of corporations worldwide.

Sina Marx is an ethnologist and a staff member of FEMNET, an organization that supports women fighting for the rights in the textiles industry worldwide.

Nadja Dorschner is the director of the Rosa Luxemburg Foundation’s South Asia Office in New Delhi.

This article originally appeared in maldekstra #18. Translated by Juan Diego Otero and Marty Hiatt for Gegensatz Translation Collective.

Civil society, trade unions, and workers along the value chain now have more opportunities to take action against exploitative corporate practices. This would only really have an effect if there were sufficient international regulations to protect workers, the environment, and human rights. We're a long way from that. — and it won't happen without a fight. Kathrin Gerlof of maldekstra spoke with Sina Marx and Nadja Dorschner to learn more about that fight.

Global commodity and value chains are essential features of globalization. Offshore production and deregulation make it extremely difficult or impossible to identify the conditions under which a product was made and the mechanisms of exploitation and environmental impacts associated with it. That is how things currently stand. This raises the serious question: what can we, and what must we do to change the situation?

ND: We can’t turn back time. Global value chains are part of our reality, so we need to find ways of regulating them.

That’s easier said than done: what standards should be applied for such regulation? Which interests are legitimate, which aren’t? Those of consumers who want transparency about the manufacturing conditions of their products, those of small-scale producers, for example in agriculture, who are looking for sales opportunities for their products? Those of the workers along the supply chains, who must assert their rights against capitalist interests and power imbalances?

Almost all solutions on the table now are based on an economic model that is oriented towards growth. They don’t take social and environmental aspects into consideration at all.

Every commodity and supply chain embodies social relations and entails either respect for human rights and environmental protection standards or their violation. Transnational corporations are at the centre of this process. What does the critique of current exploitative relations entail, what does it consist in?

SM: I’m an ethnologist, and ever since my studies I’ve paid a lot of attention to climate change, environmental change, and their impacts on labour. In a roundabout way, I eventually arrived at the topic of textiles. It illustrates many of the issues related to globalization and its conditions of production.

The difference between textiles and food is that textiles are not vital in the same sense. Of course, they protect us from the cold, but they shouldn’t be used as consumable or disposable goods, although they often are. They embody the essence of capitalism: demand is created where there is none, where there is rather overabundance. Ecologically, this gets us into serious trouble. The textile industry is one of the biggest polluters: it causes an estimated ten percent of global CO₂ emissions, more than the combined emissions of international air and sea transport. On top of that, there is the textile waste and the chemicals used in manufacturing.

The extremely exploitative conditions of the textiles industry affect many people, especially in the Global South or in the poorer countries of Europe: vulnerable groups in general, be it the lowest caste in India, internally displaced people, migrants, or women in strongly patriarchal societies. The textiles industry has always shaped and exacerbated the relations of exploitation. Whether through slave labour in the cotton fields or precarious work in factories. It always goes where it is cheapest and where workers have few rights and are in the worst position to organize. This is a systemic issue.

Are women worldwide, but above all in the countries of the Global South, particularly affected by exploitation, discrimination, violence, lacking or non-existent labour protections, and precarious employment relations and working conditions?

ND: In my work in South Asia, I’ve observed that the conditions of exploitation for workers of all genders are much more evident here than in Germany, for example. More than 80 percent of people in India are employed in the informal sector, and the situation is similar in neighbouring countries. They have no social security, minimal labour protections, and very low wages.

But many forms of exploitation affect women in particular because of prevailing patriarchal social structures. This ranges from intimidation and sexual harassment in the workplace to abuse and violence.

Sina, you work at FEMNET. Please tell us what kind of organization it is, what kind of work do you do, what do you stand for?

SM: FEMNET is a non-governmental and feminist organization that campaigns for women’s rights in the textiles industry. We fight for women in textiles to achieve progress regarding labour rights. We are active in larger partnerships, especially in the Clean Clothes Campaign, a worldwide network of NGOs and trade unions in manufacturing countries, but also in countries where most of the clothes are sold.

We try to work together with solidarity and on an equal footing. The topics are chosen by those who suffer exploitation and insufficient labour rights. More than 235 organizations in 45 countries are connected through the Clean Clothes Campaign.

How do FEMNET and the partnership see the supply chain law that was recently passed?

SM: It’s too early to tell. The law has been in force since January 2023. Companies are now assessing the risks in their supply chains. Take the freedom to unionize, for example, which is a huge problem in almost all manufacturing countries: union members are heavily repressed, threatened, fired, and sometimes imprisoned or forcibly silenced. With the new supply chain law, companies must now ask themselves: in what countries should we locate production, and is there a right to organize in trade unions there? Then they must consider the measures they would have to implement to ensure compliance with the law.

We often hear from partner organizations that workers who organize are affected by union busting and are afraid of losing their jobs. The only way to help them is to organize a larger number of workers so as to exert more pressure.

We’re saying that just because a company has to conduct analyses and submit reports, it doesn’t mean that anything will actually change. For that to happen, the measures the company adopts would have to be proportional to the level of risk. If I own a multinational corporation with billions of dollars in turnover and I’m supposed to address the risk of trade unions being repressed, I might implement two or three training courses in different factories. Shortly thereafter, the same old repression returns. Many companies get away with it.

The same applies to social audits, which are spot checks on conditions in factories carried out by private companies like TÜV, the German Technical Inspection Association. Since companies can outsource human rights compliance to a certain extent, a whole inspection industry has developed, which, however, has proven completely inadequate for uncovering or fixing the main problems in factories. These include a lack of freedom to organize, forced overtime, withholding of pay and holidays, or discriminatory practices in hiring and promotions.

Even in the case of safety deficiencies that are very easy to detect, audits are insufficient. The most notorious examples include the Ali Enterprises factory fire in 2012, the devastating Rana Plaza building collapse in 2013, and the boiler explosion at the Multifabs factory in 2017: thousands of workers were injured or killed despite each of these factories being declared safe by several leading audit firms, including TÜV Rheinland, Bureau Veritas, and RINA. The devil is truly in the details.

Does that mean the supply chain law doesn’t make much difference for now?

SM: We want to know whether it truly has a positive impact on workers’ lives, and on labour rights. The law will have to demonstrate that. There must be clarity on how those affected can lodge complaints locally if things aren’t going well, and on the mechanism for making complaints to the German authorities responsible for ensuring compliance with the law. We see serious problems in this regard. It was already clear during debates over the law that there will be no civil liability, meaning that victims of labour law violations will not be able to sue on the basis of the law.

When a company violates human rights, the German authorities can merely report the company for a regulatory offence. Civil liability would provide the possibility for compensation payments to victims of rights violations. At present, victims can only file a complaint with the authorities. But they won’t pay them any compensation, at most they’ll fine the company. This is of no use to workers in Bangladesh, for instance.

So, there won’t be many complaints. Because, as a worker in a textile factory in India or Bangladesh, I would first need to know that the law exists, know how and where to file a complaint, and do so in writing and in English, which I may not be able to do at all. And all this while knowing that I personally wouldn’t get anything out of it.

ND: With massive influence and huge amounts of capital, transnational corporations are at an advantage. They are free to choose their production locations, while the countries of the Global South undercut each other and create special economic zones in which the country’s labour rights are further eroded. Politicians welcome the corporations with open arms because they want to create jobs for the young population, which in some cases is growing rapidly. The relations of exploitation in the present are primarily shaped by global inequalities.

SM: So if a location becomes more expensive, for example when there is trade union organizing, the corporations simply move on to the next low-wage country. Then new production sites open in, say, Myanmar or Ethiopia.

In this context, what is it about export processing zones that accelerates the increase in informal employment?

ND: We see this in different parts of Asia. Workers there have even less protections. But there are also trade unions, for example in Sri Lanka, that have specialized in organizing workers within special economic zones. These cases are almost always linked to production for export, and there are many encouraging examples where organizing and solidarity along the supply chain have been successful.

Global commodity chains, so the promise goes, increase incomes, generate more and better jobs, and reduce poverty, as the World Bank claimed in its World Development Report 2020 — meaning that the expansion of the value chain on a global level goes hand in hand with social and economic improvements. That is either only a half-truth, or a complete lie, isn’t it?

SM: The textiles industry is a pioneer. Little investment is needed to start production — a house, sewing machines, and people. That’s why it’s often the first industry to enter a country.

Women in textile factories bear a double or triple burden, due to care work. If you still manage to organize, those primarily responsible for the suffering are not sitting at the negotiating table.

It’s also often the only one that brings women into wage labour. This can result in women achieving financial independence for the first time, for example from their husbands, but it doesn’t justify the conditions under which they have to work while the corporations reap profits in the billions.

What happens when workers want to organize? We know that protests tend to be violently repressed, workers and trade unionists are often imprisoned. Does the supply chain law that has now come into force change anything in this regard?

ND: No, not at first. Our work is aimed at informing workers about the law and about companies’ due diligence obligations. However, we often hear from partner organizations that workers who organize are affected by union busting and are afraid of losing their jobs. The only way to help them is to organize a larger number of workers so as to exert more pressure.

This is exactly the aim of many Rosa Luxemburg Foundation projects in South Asia. Providing information, organizing, documenting abuses through research, developing policy proposals to improve workers’ bargaining leverage, formalizing working conditions, and creating legal protections.

Is there hope for more union organizing, more international solidarity?

SM: The balance of power is unequal — very much so. The classic trade union work that we know from Europe is not possible in the Global South. The factory owners are not the same people as the capital owners. They don’t collect the surplus value, at least not most of it. Those who are making the biggest profits aren’t even on site, so they don’t negotiate with the trade unions directly.

Women in textile factories bear a double or triple burden, due to care work. If you still manage to organize, those primarily responsible for the suffering are not sitting at the negotiating table. It’s not Adidas, C&A, H&M, but the factory owner who is sitting there. But they are only partly responsible for the working conditions and wages, because the prices are dictated by their buyers, the corporations.

Globalized supply chains call for globalized networks in the fight against exploitation, in order to redress this imbalance of power.

Perhaps we can illustrate this with the example of the Partnership for Sustainable Textiles, which at least sounds. Bringing together around 122 members from business, the German government, civil society, and trade unions with the aim of improving working conditions in the textiles industry worldwide. Is it helpful or just an alibi?

SM: This textiles partnership was initiated by politicians after the collapse of Rana Plaza. The idea was to bring everyone to the table: companies, certifiers, trade unions, politicians. It got off to a good start, and there was no supply chain law yet. The goal was to achieve improvements together. They also addressed the fact that a company operating a textile factory in Bangladesh or India is seldom using its full capacity on its own, but that four or five companies are usually operating there, who should sit down together and think about how to improve working conditions.

We got involved because we had high hopes, but they’ve been dashed in most areas. The companies that try to bring about change find their efforts thwarted by those against it, by means of the partnership. Many have used the latter as a green-washing method. Initiatives like the partnership are not effective instruments to hold companies accountable for abuses, to protect people from human rights violations, or to provide victims of human rights violations with access to compensation.

While multi-stakeholder initiatives may be important and necessary forums for learning, dialogue, and trust-building between companies and other stakeholders, they ultimately bring scarcely any positive change for workers. This is why being a member in the partnership or similar initiatives must not be considered sufficient when it comes to the human rights obligations of companies. That would be a kind of free pass, as if being a member meant that a company had already done its due diligence.

What steps are needed for creating a truly effective instrument to improve working conditions along supply chains?

SM: At least we’re moving in the right direction. That is, not leaving it at the discretion of companies whether they want to comply with human rights or not, but rather making it obligatory. But what does it actually mean to make respecting human rights obligatory? If someone should find out that a company isn’t complying, and it can be proven with certainty — a task the seamstress on site must carry out by herself — the company might then have to pay a small fine.

Obviously, we want the penalties for rights violations to be harsher, and for the burden of proof not to lie with the victims, which is unrealistic. NGOs in Germany should be able to file complaints on behalf of the victims more easily. We would like to see significant improvements in European supply chain law and the German one replaced by a better regulation that allows for civil liability and is more sensitive to environmental issues.

There also needs to be rewards for sustainable, fair manufacturing, for example by subsidising such products. Because, at the moment, those who want to produce in a fair and environmentally responsible way are still at a competitive disadvantage.