Fast fashion is an industry characterized by short lead times and the continued desire to attain "more for less." This attitude can be traced to one of the first links in the supply chain – to the production of the garments themselves. Retailers have come to expect extremely inexpensive garments and accessories from factory suppliers in order to maximize their own profits at retail, and factory owners are compelled to accept order quantities that are far often above their production capacities.
This practice of outsourcing and subcontracting that enables retailers to go far beyond their own manufacturing capabilities is an unsurprising progression in their efforts to meet the fast fashion-style deadlines in a cost-effective manner. It often involves employing strict practices of excessive working hours, paying garment manufacturers unliveable wages, maintaining often inadequate and unsafe working conditions, and even utilizing child labor.
In short: a vast number of garment workers are stuck in a poverty cycle due to such poor wages, and an unfathomable number are injured or lose their lives through flouted health and safety regulations, all so fast fashion retailers can profit enormously and consumers can get their hands on trendy garments and accessories at low prices.
When exploitation and abuse of the workforce is publicly uncovered, there follows a “shocked” fashion company director and a newly polished Corporate Social Responsibility policy. As if scripted, this seems to occur every time a retailer is linked to a fast fashion-related catastrophe, followed by audits and maybe financial recompense for the communities affected.
These instances also lead to the questions: For instance, how and when does the law intervene to prevent such poor practice? Livia Firth, the founding member of Eco-Age, a sustainable business consultancy, has announced that The Circle, a women’s advocacy group founded by singer Annie Lenox, will compile extensive legal research to support the recognized need of a standardized living wage. Their report, to be published in May 2016 will provide examples of effective labor laws, recognizing and seeking to address limitations in less effective legislation. It is proposed that the outcome will provide strong grounds on which to further the development of effective legislation whilst highlighting the importance of enforcing existing law and standards.
The Circle’s study is concerned largely with wages within the fashion industry. However, the Companies Act of 2006 (“the Companies Act”), an Act of the Parliament of the United Kingdom, incorporates broader considerations. It addresses the duties owed by directors to employees, to the community and environment affected by the company’s conduct, and to other stakeholders, “customers, suppliers and others” – all whilst requiring them to act in “good faith” in furtherance of the company.
In terms of fashion, the aforementioned language may be construed to extend to fast fashion suppliers, many of which are not owned by the fast fashion retailers themselves. And if the language, and thus, the Companies Act, does apply, fast fashion retailers are very likely failing to meet their specific duties as a result. According to the Companies Act, “to further the company” likely means to increase its revenue and profitability; to do so in “good faith” is judged by the standard of a reasonable person. Moreover, the Companies Act can be interpreted to mean that “community and environment” and “suppliers and others” includes all individuals implicated in the garment production stages, as well as final domestic business conducted in England and Wales, where the Companies Act predominantly operates. Similarly: low wages, structurally unsafe working environments, denied access to labor unions, and verbal and physical abuse fly in the face of a company director’s “due regard” for garment workers as stakeholders.
With regard to the environment, meeting the population’s fashion demand has created the world’s second most environmentally damaging industry. An easily illustrative example is the effect of denim jean production in China: with one in three pairs worldwide being produced in Xintang, since the 1980s the nearby River Pearl water quality has fallen to an undrinkable standard. Severely toxic chemicals and by-products are washed from Xintang’s jean factories, affecting not only this denim capital, but a number of large cities down river. Over one thousand brands source from Xintang, many English and American: it is hard to comprehend that these brand directors have practiced due regard for the environment and the communities affected by Xintang’s polluted waterways.
So, are fast fashion retailers that operate under UK law, such as Topshop and River Island, among others, being prosecuted under the Companies Act? It does not seem so. In the pursuance of justice, applying the equitable principles as incorporated into the Companies Act, could result in significant civil and criminal remedies against directors shown not to have shown due regard for their stakeholders, and yet, it is difficult to see where this legislation has been applied to companies in England whose businesses are so heavily reliant on fast fashion.
The good news: The Circle’s legal research will no doubt provide adequate grounds for lobbying national and international legislators and companies to effect change for a more sustainable future of this industry.
ELEANOR DEANE writes about fashion and law from an English law perspective.