The garment and footwear sector is one of the largest consumer goods sectors in the world, and yet, it is one of the most highly unregulated when it comes to human rights, as evidenced in part by the tragic collapse of the Rana Plaza factory in Bangladesh in 2013. With this in mind, the Organization for Economic Co-operation and Development (“OECD”), an intergovernmental economic organization devoted to stimulating economic progress and world trade, has issued its Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.
The result of an extensive, multi-stakeholder process, this sector-specific guidance aims to assist companies in identifying and preventing potential negative impacts related to human rights, labor, the environment and corruption in garment and footwear supply chains worldwide. The 186-page study specifically addressed to the "garment and footwear sector" and is intended to help enterprises in the sector implement the due diligence recommendations contained in the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights.
In particular, it offers comprehensive and government-backed recommendations to business that address risks they may face in both manufacturing and sourcing materials. The guidance provides, for the first time, a common understanding of supply chain due diligence for the garment and footwear supply chains in line with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.
For instance, it puts forth basic recommendations for supply chain due diligence processes and supporting measures called "Core Due Diligence Guidance" (Core Guidance): Embed responsible business conduct in enterprise policy and management systems; Identify potential and actual harm in operations and supply chain; Cease, prevent or mitigate harm in operations and supply chain; Track (verify, monitor and validate progress on due diligence and effectiveness); Communicate (communicate publicly and with affected stakeholders); and Provide for or cooperate in remediation when appropriate.
The guidance also promotes a systematic and integrated approach to managing risk and purchasing, involving on-going, proactive and reactive processes, with a focus on progressive improvement. It recognizes both the diversity of the sector as well as the complexity of the challenges that the sector faces. The guidance recommends that enterprises take a collaborative and risk-based approach to identify ways to address impacts of its operations and sourcing decisions and monitor progress over time, while encouraging ongoing engagement with business partners in developing economies.
It also calls on buyers to embed social, human rights and environmental considerations into their purchasing practices, and collaborate with common buyers to avoid supplier audit fatigue, so that companies can direct their resources towards prioritizing the prevention of more severe impacts.