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Economy & Labor , World

New Hope for Pakistan’s Mistreated Workers

by Louise Donovan April 2, 2024

Co-published with Foreign Policy

Nasir Mansoor has spent 40 years fighting for Pakistan’s workers. Whether demanding compensation on behalf of the hundreds of people who died in a devastating 2012 factory fire in Karachi or demonstrating against Pakistani suppliers to global fashion brands violating minimum wage rules, he’s battled many of the country’s widespread labor injustices.

Yet so far, little has improved, said Mansoor, who heads Pakistan’s National Trade Union Federation in Karachi. Despite spending most of his time dealing with issues in the country’s garment sector, labor laws are still routinely flouted inside factories. Not even European Union trade schemes such as the Generalized Scheme of Preferences—which benefits developing countries such as Pakistan but requires them to comply with international conventions on labor rights—have helped curb violations in an industry notorious for them. Regulations and trade protocols look good on paper, but they rarely trickle down to the factory level. “Nobody cares,” Mansoor said. “Not the government who makes commitments, not the brands, and not the suppliers. The workers are suffering.”

But change might finally be on the horizon after Germany’s new Supply Chain Act came into force last year. As Europe’s largest economy and importer of clothing, Germany now requires certain companies to put risk-management systems in place to prevent, minimize, and eliminate human rights violations for workers across their entire global value chains. Signed into law by German Chancellor Olaf Scholz in January 2023, the law covers issues such as forced labor, union-busting, and inadequate wages, for the first time giving legal power to protections that were previously based on voluntary commitments. Companies that violate the rules face fines of up to 8 million euros ($8.7 million).

For decades, Western companies based in countries with highly paid workers and strong labor protections have sourced from low-income countries where such laws don’t exist or are weakly enforced. While this business model cuts costs, it’s made it incredibly difficult for workers to seek justice when problems arise. Given the garment sector’s long history of poor labor conditions—whose victims are a predominantly female workforce—rights groups say the industry will feel some of the highest impacts of new due diligence laws such as Germany’s.

Until now, promises made by fashion brands to safeguard workers stitching clothes in factories around the world have been largely voluntary and poorly monitored. If the promises failed or fell short and that information became public, the main fallout was reputational damage. As governments come to realize that a purely voluntary regimen produces limited results, there is now a growing global movement to ensure that companies are legally required to protect the people working at all stages of their supply chains.

The German law is just the latest example of these new due diligence rules—and it’s the one with the highest impact, given the size of the country’s market. A number of other Western countries have also adopted similar legislation in recent years, including France and Norway. A landmark European Union law that would mandate all member states to implement similar regulation is in the final stages of being greenlighted.

Although the United States has legislation to prevent forced labor in its global supply chains, such as the 2021 Uyghur Forced Labor Prevention Act, there are no federal laws that protect workers in other countries from abuses that fall short of forced labor. That said, a proposed New York state bill, the Fashion Act, would legally require most major U.S. and international brands to identify, prevent, and remediate human rights violations in their supply chain if passed, with noncompliance subject to fines. Since major fashion brands could hardly avoid selling their products in New York, the law would effectively put the United States on a similar legal level as Germany and France.

Abuses in textile manufacturing have been well documented. Horror stories about brutal violence or building collapses make the news when there’s a major incident, but every day, members of a predominantly female workforce live on low wages, work long hours, and endure irregular contracts. Trade unions, when they are allowed, are often unable to protect workers. A decade ago, the European Parliament described the conditions of garment workers in Asia as “slave labour.”

As of January, Germany’s new law applies to any company with at least 1,000 employees in the country, which covers many of the world’s best-known fast fashion retailers, such as Zara and Primark. Since last January, German authorities say they have received 71 complaints or notices of violations and conducted 650 of their own assessments, including evaluating companies’ risk management.

In Pakistan, the very existence of the German law was enough to spark action. Last year, Mansoor and other union representatives reached out to fashion brands that sourced some of their clothing in Pakistan to raise concerns about severe labor violations in garment factories. Just four months later, he and his colleagues found themselves in face-to-face meetings with several of those brands—a first in his 40-year career. “This is a big achievement,” he said. “Otherwise, [the brands] never sit with us. Even when the workers died in the factory fire, the brand never sat with us.”

Nearly 12 years on from the 2012 fire, which killed more than 250 people, violations are still rife for Pakistan’s 4.4 million garment sector workers, who produce for many of the major global brands. Several of these violations were highlighted in research conducted by FEMNET, a German women’s rights nonprofit, and the European Center for Constitutional and Human Rights (ECCHR), a Berlin-based nongovernmental organization, into how companies covered by the Supply Chain Act were implementing their due diligence obligations in Pakistan. With the help of Mansoor and Zehra Khan, the general secretary of the Home-Based Women Workers Federation, interviews with more than 350 garment workers revealed the severity of long-known issues.

Nearly all workers interviewed were paid less than a living wage, which was 67,200 Pakistan rupees (roughly $243) per month in 2022, according to the Asia Floor Wage Alliance. Nearly 30 percent were even paid below the legal minimum wage of 25,000 Pakistani rupees per month (roughly $90) for unskilled workers. Almost 100 percent had not been given a written employment contract, while more than three-quarters were either not registered with the social security system—a legal requirement—or didn’t know if they were.

When Mansoor, Khan, and some of the organizations raised the violations with seven global fashion brands implicated, they were pleasantly surprised. One German retailer reacted swiftly, asking its supplier where the violations had occurred to sign a 14-point memorandum of understanding to address the issues. (We’re unable to name the companies involved because negotiations are ongoing.) The factory complied, agreeing to respect minimum wages and provide contract letters, training on labor laws, and—for the first time—worker bonuses.

In February, the factory registered an additional 400 workers with the social security system (up from roughly 100) and will continue to enroll more, according to Khan. “That is a huge number for us,” she said.

It’s had a knock-on effect, too. Four of the German brand’s other Pakistani suppliers are also willing to sign the memorandum, Khan noted, which could impact another 2,000 workers or so. “The law is opening up space for [the unions] to negotiate, to be heard, and to be taken seriously,” said Miriam Saage-Maass, the legal director at ECCHR.

After decades of issues being swept under the carpet, it’s a positive step, Mansoor said. But he’s cautious. Of the six remaining global fashion brands contacted, three are in discussions with the union, while three didn’t respond. Implementation is key, he said, particularly because there has already been pushback from some Pakistani factory owners.

Last month, EU member states finally approved a due diligence directive after long delays, during which the original draft was watered down. As it moves to the next stage—a vote in the European Parliament—before taking effect, critics argue that the rules are now too diluted and cover too few companies to be truly effective.Still, the fact that the EU is acting at all has been described as an important moment, and unionists such as Mansoor and Khan wait thousands of miles away with bated breath for the final outcome. Solidarity from Europe is important, Khan said, and could change the lives of Pakistan’s workers. “The eyes and the ears of the people are looking to [the brands],” Mansoor said. “And they are being made accountable for their mistakes.”

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