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Slavery case study: Patagonia

posted by Andrew Allen
21 January 2016

The official blogs of clothing retail chains tend to be filled with little more than ideas on how to combine various items of this season’s range for a great layered look.

Outdoor clothing retailer Patagonia broke the mould when it announced in its company blog in July 2015 that labour brokers in Taiwan were charging migrant workers $7,000 for factory jobs, creating a form of debt akin to modern slavery. Furthermore, it continued, this was happening “in our own supply chain”.

The company went on to say that social responsibility audits in 2011 had revealed red flags that led Patagonia to commission NGO Verité to conduct in-depth migrant worker assessments with four Taiwanese suppliers.Among the results of the investigation were the discoveries that it can take a worker two years to repay a labour broker and that most contracts last only three years before the worker has to return home and begin the process and paying the fees again.

As a result, Patagonia set out to develop a new standard, institute changes in its supply chain, repay current workers and share the new standards with other companies that want to eradicate similar practices by their suppliers.The new migrant worker standard was developed with Verité and is intended to cover pre-hiring practices, labour contracts, wages and fees, living and working conditions, grievance procedures and repatriation. It also intended to put a stop to practices such as retaining workers’ passports.

In December 2015, the company hosted a forum for Taiwanese suppliers to explain the new standard and tell suppliers they must stop charging fees to foreign workers hired on or after June 1, 2015. The rest of the standard went into practice in December.

Suppliers could choose to pay the fees themselves or hire workers directly without the use of brokers and were told to repay workers who were hired before 1 June.

Patagonia staff also met officials from Taiwan’s Ministry of Labour Workforce Development Agency, who agreed to provide training to suppliers.The standard states that legitimate fees to charge migrant workers include the cost of transportation from the worker’s home directly to the recruitment centre or embarkation point and passport fees.

It stresses that fees and expenses should be clearly communicated to foreign workers in a language they understand at the beginning of the recruitment process before leaving their country.

Suppliers must retain documentation on these workers for five years in case of audit and pay such fees directly whenever possible. Patagonia has now applied the migrant worker standard to its entire supply chain.

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January 21, 2016