Does fair trade clothing help the consumer and the retailer?

Gigi Douban May 9, 2013
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Does fair trade clothing help the consumer and the retailer?

Gigi Douban May 9, 2013
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Yesterday, eight workers were killed in a fire that ripped through a Bangladesh factory that makes polo shirts and underwear for Western retailers. Just a couple weeks ago, more than 900 Bangladeshi workers lost their lives in another factory incident.

Some American companies have since decided to pull out of Bangladesh all together. Others are mum about the tragedy. And some plan to be more transparent about how and where its clothes are made. But that… can be tricky.

Before that tank top ever made it to the rack, chances are it’s been through a really long supply chain: fabric here, assembly there, finish and trim at another factory.

Gary Chartier, who teaches law and business ethics at La Sierra University, says that’s sort of convenient for retailers when there’s a tragedy like the one in Bangladesh.

“Many companies as we know find ways to put many layers between retail operations and production operations so that they can claim that they’re really not responsible for what goes on on the ground,” he says.

So when a company notes on its website or on a label that a T-shirt was made in a certain country, that doesn’t always tell the whole story. Unless companies cut out the middlemen, it’s almost impossible to know where and how a product is made, says Renee Bowers, executive director of the Fair Trade Federation.

“And so with a shortened supply chain,” she says, “there is a much greater level of transparency about workplace conditions, about pricing, and about who is making the product.”

But is that practical for a retail giant like Walmart or Sears? Bowers says it won’t be easy. “Yes it is much more difficult to have a shorter supply chain, it is much more difficult to have direct partnerships,” she says, “and it is very difficult for companies to provide the level of transparency that’s going to help ensure workplace protections.”

And even if companies do try to improve workplace conditions abroad, that costs money. And Chartier says higher prices might turn some customers away. “While consumers are going to probably stay away from brands that they clearly identify with egregious abuses, apart from that most consumers are going to be pretty responsive to price,” he says.

But he says for those customers who do care about product sourcing, more transparency will go a long way.

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