• Oxfam Australia Chief Executive Lyn Morgain and Parvin* - Credit: Mohammad Rakibul Hasan/OxfamAUS. *Name changed for the wellbeing of the worker and her family.
    Oxfam Australia Chief Executive Lyn Morgain and Parvin* - Credit: Mohammad Rakibul Hasan/OxfamAUS. *Name changed for the wellbeing of the worker and her family.
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Oxfam Australia is calling on Australian fashion brands to clean up their business practices, after a new report into worker wellbeing revealed a system of entrenched inequality. 

The report, Shopping for a Bargain, revealed that purchasing practices from fashion brands operating in Australia – including aggressive price negotiation, inaccurate forecasting of orders, short lead times and last-minute changes to orders – is having a profound impact on the lives of garment workers.  

The research examined the purchasing practices of 10 fashion retailers operating in Australia – Best&Less, Big W, Cotton On, H&M Group, Inditex (Zara), The Just Group, Kmart, Myer, Mosaic Brands and Target Australia – that source clothes from Bangladesh.

Oxfam Australia chief executive Lyn Morgain said the research, conducted with Monash University, was the first detailed investigation of its kind.

"The research reveals unfair purchasing practices are pressuring factories into adopting poor working conditions and paying unacceptably low wages. 

"It found that these poor purchasing practices of brands are making it impossible for factories to increase wages, despite many of the same brands making public commitments to ensure the payment of living wages.

"Instead, wages are trapping workers – mainly women – and their families in a cycle of poverty," she said. 

To understand the impacts of these purchasing habits, the researchers conducted more than 150 surveys and 22 in-depth interviews with brands and factories. 

The results of the surveys were used to develop a comparative rating of purchasing practices, representing the score the brand gave itself against that given by the factories from which their clothes are purchased. 

Shopping For A Bargain found that H&M Group performed well in terms of an overall rating by factories of 3 out of 4.

Meanwhile, Big W, Kmart and Target Australia all rated 2.5 out of 4 by factories, followed by Cotton On*, Inditex (Zara)* and Myer* with ratings of 2 out of 4.

The survey results show that factories rated The Just Group* and Mosaic Brands** on the lower end of the scale, rating them 1.5 out of 4, while Best&Less had the biggest discrepancy between the self-rating of the brand and the factory rating, at 3.5 compared to 2. 

Morgain added that over the past three years, 12 major retailers had responded to Oxfam and its supporters by making public, credible commitments to paying a living wage. 

"The commitments made by brands, while yet to be implemented, are enormous steps in the right direction. 

"But this report shows that unless brands agree to improve the poor purchasing practices that are driving down wages, their commitments to ensure the payment of living wages risk becoming mere lip-service.

"Oxfam is calling on Australian brands to develop and publish responsible purchasing policies and to ensure that labour costs are ‘ringfenced’ in negotiations with factories – that is, separately calculated to ensure the payment of living wages to workers.

"And brands that are lagging behind need to take the step of making a public, credible commitment to living wages," she said. 

Key findings from the report include:

  • Brands claimed they never or rarely terminate a relationship or switch factories because of price, but 100% of factories surveyed reported that brands always terminate their relationship or switch factories if suppliers are unable to meet the buyer’s demands for a lower price.
  • Eight out of 10 factories surveyed reported that brands often apply high-pressure negotiating strategies to reduce price. Of those, 57% of respondents reported that in order to secure a reduced price, brands would tell factories about the prices they were offered by other factories, and 40% of the respondents reported that brands told factories to “take it or leave it” on pricing.
  • Four out of 10 factories said they had accepted orders at a price below what it costs them to produce the clothes safely and ethically.
  • Six out of 10 factories reported accepting other orders at low prices when order volumes fell short of the brand’s forecast.
  • Seven out of 10 factory respondents reported that to deliver orders that exceeded forecasts on time, they set steep production targets for workers and required them to work excessive overtime.

 

*The Just Group, Myer, Cotton On and Inditex (Zara) declined to participate in the survey.

**Mosaic Brands did not take up the offer to participate in the survey by the deadline.

The above brands are therefore only ranked on the results of factory surveys.

 

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