Sustainable Garments and Textile Agreement achieves results in responsible business conduct during corona pandemic

The annual report of the Dutch Agreement on Sustainable Garments and Textile shows that visible steps forward have been taken, despite the corona pandemic. For example, the percentage of participating companies that meet the Agreement’s requirements rose from 63 to 80 percent.

A Bangladeshi worker carries Garments fabric after dries them under the sun at Narayanganj, near Dhaka, Bangladesh © Shutterstock

The production chains of participating companies are becoming increasingly transparent: the data of almost 6,000 unique production locations are now made public. The share of more sustainable raw materials increased from 28 to 38 percent. Several public calls for enhanced cooperation in the supply chain were made by the Agreement during the corona crisis.

The corona pandemic has major consequences for garment and textile companies in the Netherlands and for companies and workers in production countries. Orders were canceled with negative consequences for employment in the sector. At times, freedom of association came under pressure. The corona pandemic also made it more difficult to carry out audits on location. In various statements, the Agreement called on parties in the chain, governments, trade unions and social organizations to cooperate. Primarily to protect workers' income and health, and also to make supply chains more sustainable and fairer. “In a crisis, everyone is first focused on survival,” says Pierre Hupperts, chairman of the Dutch Agreement on Sustainable Garments and Textile (AGT). “However, the Agreement pursues a collective interest. In particular in times of corona it becomes apparent how important it is for companies to maintain good relationships with their suppliers and to achieve improvements in the supply chain through collective projects.” The results are described in the annual report 2020 (in Dutch) and representatives of AGT parties share their insights through short interviews.

Ongoing improvements

The assessment of the AGT companies shows that 80 percent comply with the AGT-requirements regarding international Responsible Business Conduct (RBC), 7 percent almost comply and 13 percent does not comply. This is an improvement compared to 2019, in which 63 percent of companies met the obligations, 19 percent almost and 18 percent did not. “The Agreement initiates change towards a more sustainable supply chain. Taking further steps requires a level playing field for companies, a continuously active government and even more cooperation between all parties involved in the Netherlands, Europe and worldwide. Ultimately, no company can be left behind,” says Hupperts. The Agreement’s requirements are a practical implementation of the OECD Guidelines for Multinational Enterprises and translated into assessment criteria (in Dutch) for policies, risk analysis, prioritization, approach, evaluation and communication.

In 2020, the assessment interviews focused in particular on whether AGT companies complied with the principles drawn up regarding purchasing practices during the corona crisis. As time progressed, it turned out that a very large proportion of the companies acted in accordance with the principles. Companies have been repeatedly questioned and addressed by parties and the AGT secretariat about their actions during the corona pandemic. Companies that did not (fully) act in accordance with the corona guidelines received a lower score on the purchasing practice component and a negative remark in their annual assessment.

Increasing transparency

When production locations are made public, it is easier to improve working conditions in garment and textile factories. With this information (local) stakeholders can report abuses, so that they can take action. At the end of 2020 it became clear that from 2016 to 2019 the number of unique production locations that AGT companies publish has doubled from 2,800 to almost 6,000. The locations can be found on the Open Apparel Registry (OAR): a worldwide database of textile production locations. The number of AGT companies taking an extra step by signing the Transparency Pledge increased to 18 (2016: 2). By signing this pledge, these companies promise to disclose, among other things, where they produce their garments, what type of garments are made and how many people work there.

Share more sustainable raw materials is rising

The corona pandemic has shown that attention to the living and production conditions of animals is important to prevent future pandemics. The AGT companies are paying more and more attention to animal welfare and have taken another step towards a more sustainable chain. The share of more sustainable raw materials has increased from 28 percent in 2018 to 38 percent in 2019. These are raw materials that are less harmful than traditional raw materials, particularly with regard to the environment and animal welfare, and meet the criteria of internationally recognized organizations such as the Global Organic Textile Standard (GOTS), Better Cotton Initiative (BCI) and Textile Exchange.

In line with OECD guidelines

The standards on international RBC of the AGT and its implementation are largely in line with the OECD guidelines. This became apparent from an extensive analysis conducted by the OECD. The OECD mentioned as strong points, among other things, the prevention of abuses, the prioritization of risks, the customization for small and medium-sized enterprises, the involvement of top management and the attention to purchasing practices.

There is also room for improvement. In the evaluation of companies, for example, too much attention is paid to internal control measures, the right risks can be prioritized more precisely, gender must be better included in the assessment process and the assessment of large companies could better fit their scale and size. The way in which stakeholders in the textile chain have access to the complaints and disputes mechanism should also be improved.

Ruling Complaints and Disputes Committee

The AGT has an independent Complaints and Disputes Committee that harmed parties of AGT signatories can turn to if they believe that their rights are being violated. In addition, the committee focuses on resolving disputes. In 2020, the committee made its first ruling on a complaint submitted.