As the online retail world continues to offer incredibly low prices, the human toll behind these products is becoming increasingly evident.
The Dark Side of Low Prices
The trend of low prices has been spearheaded by retailers such as Shein and Temu, notorious for their cheap products that come with a multitude of hidden costs. In 2023, a U.S. congressional commission linked these companies, along with several other Chinese retailers, to allegations of forced labor and poor working conditions.
This issue extends beyond Shein and Temu, permeating a larger fashion industry riddled with dubious working conditions. A court ruling in Italy against a company that manufactures handbags for luxury fashion brand Dior highlighted the endemic poor labor conditions in the fashion industry.
The Struggle for Ethical Supply Chains
According to Walk Free, a global human rights watchdog, an estimated $161 billion worth of clothing and textiles annually fall into a risk category prone to production by forced labor. This is driven by the relentless pursuit to keep prices low and labor costs down. Despite numerous commitments to maintain ethical supply chains from major industry players, these are challenging promises to fulfill.
Richard Danderline, CEO for shipping container company Staxxon and former CFO at fashion retailer Kenneth Cole, suggests that the concept of an ethical supply chain is somewhat at odds with the industry’s long-standing practices.
The Challenge of Transparency
Angela Santos, an attorney who assists companies in navigating ethical labor practices, highlights the current lack of transparency as a significant obstacle. It is challenging for companies to effectively monitor the practices of their numerous suppliers, especially when materials for a single item of clothing can originate from multiple countries.
Regulatory Measures and Their Impact
New regulations such as the Uyghur Forced Labor Prevention Act (UFLPA) passed by the U.S. in 2022 and the EU’s regulations passed in 2024 have given authorities the power to detain imports linked to forced labor. However, companies and their suppliers are still learning how to navigate these new regulations.
The Rise of Fast Fashion
The rise of fast fashion, as exemplified by Shein and Temu, has further complicated the pursuit of ethical supply chains. These companies have seen their market values soar while maintaining ultra-low prices.
Success Stories: The Case of Waitrose
Despite the challenges, there are success stories outside the realm of online retail. British grocery chain Waitrose committed in 2020 to ethically source the cocoa in its store-branded chocolate bars and all other branded products by 2024. This move was in response to the chocolate industry’s lax labor standards.
Waitrose’s approach may not be a universal solution, but it offers valuable lessons for any industry. Chloé Rotureau, an ethics and sustainability specialist at Waitrose’s parent company, the John Lewis Partnership, emphasizes the importance of understanding and learning about your supply chain as the starting point.
