Download Document 2 - European Commission

Summary of the informal meeting with Member States on responsible management of
the supply chain in the garment sector– 23 October 2014
Summary: Member States underlined the added value of an EU flagship initiative on
responsible management of the supply chain in the garment sector, and presented similar
initiatives undertaken at national level.
The importance of coordination among actors, including at EU level, and of having a multi
stakeholder dimension was underlined. The central role of the private sector was pointed out,
from multinational companies to SMEs, taking into account the complexity of the value chain
and business realities (competition, relocations, subcontracting, complexity among suppliers
at country level). The necessity to improve information for consumers was also underlined.
The need for capacity building and technical assistance for suppliers and local auditors was
mentioned, as well as the objective to engage governments in producing countries on
implementation of rule of law and of existing international standards. Other issues were
raised, such as the role of women and girls, the need for coordination with ongoing OECD
work, the question of external supervision of companies or of antitrust law, the idea of
launching a pilot project in Morocco to foster in-country coordination following the approach
of the Bangladesh Compact.
The conclusion of the meeting was that Member States would be involved in a collaborative
and transparent way, that ongoing activities at national and EU level would be valorised as
mutually reinforcing, and that efforts would focus on further improving communication,
transparency, sharing of practices and information, and coordination, possibly through a
multi-stakeholder roundtable at EU level.
The Chair Klaus Rudischhauser, Deputy DG in DEVCO, presented the context and the
preparation process of a possible EU flagship initiative in the garment sector for the European
Year for Development. He recalled that the objective of the meeting was to gather experience
and share ideas with Member States to feed into the preparation process of this flagship
initiative.
Androulla Kaminara, principal advisor in DEVCO, recalled the objectives of the European
Year for Development and introduced the proposed objectives of the flagship initiative.
Commission colleagues then introduced the existing activities at EU level in different
Commission DGs:
- DG DEVCO is working on projects with ILO and CSOs of relevance for the initiative,
and published a Communication on private sector development in May 2014; relevant
projects and programs also exist in regional programs, in particular Asia (Switch
Asia) and the Neighbourhood South.
- DG ENTR introduced the key principles of the EU CSR strategy (non-prescriptive
approach and respect of international guidelines), and presented the review process of
the current EU CSR strategy, and the first results of the CSR public consultation. The
importance of a similar approach aiming at promoting the implementation of existing
international standards (such as ISO 26000, which provide guidelines for social
responsibility) and at establishing an effective partnership with industry and Trade
Unions in the context of this initiative was underlined. Two major new pieces of
legislation related to CSR were also presented, the directive on disclosure of nonfinancial and diversity information by large companies and groups and the directive
on public procurement which will extend the possibilities for Member States to
integrate social and environmental criteria into the respective steps of a procurement
contract.
- DG TRADE presented the main features of the EU Special Incentive Arrangement for
sustainable development and global governance (GSP+) and the trade and sustainable
development provisions in EU Free Trade Agreements, as well as the OCDE work on
Responsible Business Conduct, with the planned launch of a multi stakeholder
process, and the aim to develop government backed sector guidance for companies.
- EEAS recalled the need for more coordinated efforts, and the fact that due diligence
by companies would in itself not be sufficient to make progress; it was necessary to
improve communication, coordination and consultation, and to work with government
in producing countries, together with the Member States in a coherent and
comprehensive manner.
- DG EMPL underlined the close cooperation with ILO on the Decent Work Agenda,
including for the ratification and effective implementation of the core ILO
conventions, and the ongoing discussions in the G20 on occupational health and
safety. The Sustainability Compact for Bangladesh developed after the Rana Plaza
factory collapse, is an innovative approach mobilizing donors, partner country
governments, private sector and social partners at national level; the follow-up
meeting took place in Brussels on October 20th, and the outcome document will be
available on the Commission's website. DG EMPL also presented a project by
European industry and Trade Union (EURATEX and the IndustryAll) in the textile
and garment sector supported by the Commission to develop a CSR risk assessment
tool.
- DG SANCO recalled the role of European consumers, which should be able to make
an informed choice in buying products based on transparent information, and
presented the multi-stakeholder dialogue and a study being finalised on environmental
claims, in particular on misleading green claims ("greenwashing"), as well as the
activities of DG SANCO on consumer product safety, consumer market scoreboard
and consumer awareness raising.
- DG ENV presented the EU Ecolabel for textiles, the EU Green Public procurement,
the product environmental footprint with two pilots projects on T-shirts and non-
leather shoes, and the international relevant actions, in particular the UNEP process to
promote exchange of information on chemicals in products.
Member States representatives then presented the initiatives undertaken at national level.
A representative of Sida (Swedish Development Agency) presented initiatives at national
level, in particular the Swedish Leadership for Sustainable Development, a network of 25
CEOs of Swedish companies engaging in sustainable business practices. Sweden presented
ongoing projects, with H&M to develop skills certificates for textile workers in Bangladesh,
on industrial relations in Cambodia, or a training on occupational health and safety for factory
managers in Bangladesh. Sweden also developed an initiative on sustainable water resources
management in India together with the private sector, to work with suppliers to reduce use of
water, electricity and chemicals in textile production process, which has developed positive
results and return on investments for companies and is being expanded to other countries.
Germany started in April 2014 a multi stakeholder process with a view to achieving concrete
improvements in social and environmental standards in the textile and clothing supply chain,
involving companies, trade unions, NGOs and the German government; several working
groups were set up, to map down the whole textile supply chain and define minimum
standards and best practices. On 16 October 2014, Germany launched an Alliance for
sustainable textile with an action plan including a roadmap setting ambitious targets that
companies have to fulfil; the objective is to gain more companies to become members of the
Alliance, and help them through the implementation process. In January 2015, Germany will
also launch an internet website to inform consumers on the reliability of existing standards in
the textile sector, using the standards listed on the Standards Map website developed by the
International Trade Centre and which the Commission also supports. Another part of the
German website is focused on public procurements in textiles. Germany underlined that
political will from the new German Minister for development had been decisive, and that
global companies recognized that they do not have complete transparency over their value
chains. Germany will also take this subject on the agenda of the G7 Presidency, and will
organize a meeting on 7 November in Berlin together with the Netherlands, to present the
German textile initiative.
The Netherlands informed that a national plan of action on textiles had been developed by
the private sector through a multi-stakeholder initiative; the plan has a focus on different areas
of CSR such as living wages, child labour or chemicals, and covers various producing
countries. A CSR risk analysis was also undertaken by the NL government, in particular
regarding the textile sector, with a view to address the specific risks through an agreement
between business and the government. NL also supports the ILO programs in Bangladesh and
plays an active work in the Sustainability Compact; it also works in partnership with IFC and
several brands for more sustainable water use, and has developed several relevant projects, for
instance on women rights.
Denmark launched six point plan for creating responsible global supply chain and Coporate
social responsibility, including a national initiative on textiles (dialogue with the Danish
textile and fashion sector) with a view to defining a national initiative in Spring 2015. DK
underlined the need to take into account the situation of SMEs; indeed many Danish SMEs
are engaged in this sector alongside the major brands, and they lack capacity to tackle the
sustainability issues. In Bangladesh, DK works on ethical trade in partnership with the Danish
Ethical Trading Initiative. DK also announced that by End October, an international
partnership initiative created at the Global Green Growth Forum platform would be launched
regarding the garment industry. The initiative under the heading 'A Race to the Top' seeks to
create large scale improvements in the social and environmental impact of apparel production.
The partnership aims at developing packages of interventions and incentives at a systemic
level that can encourage manufacturers to improve their sustainability performances and use
the experiences created in one country to be scaled to other countries engaged in the garment
industry. Amongst the partners involved are Levi Strauss & Co, IDH, ILO, IFC and the
Sustainable Apparel Coalition. The partnership is supported by the Governments of Denmark
and Netherlands and the Government of Vietnam is expected to join as well. The partnership
will result in more concrete outcomes in 2015. DK is also working with IDH on the Better
Cotton Program.
France underlined that a French report had been released in the framework of the OCDE
work to develop sector specific guidance on implementation of the OCDE guidelines for
Multinational Enterprises, with recommendations for business and public sector. This report
had been developed through a multi-stakeholder initiative at national level. France suggested
that EU action could take place in the framework of the OECD guidance.
Spain has developed a private sector working group (business, CSOs, NGOs, development
agency) and a national council for CSR. The only International Framework Agreement in the
textile sector has been signed with Inditex and global trade unions. It covers the whole value
chain, including subcontractors, and includes also Trade Unions from countries where Inditex
has factories, covering one million workers in over 3500 factories.
Latvia is organising public consultations on CSR at national level, including on the external
dimension. In Latvia, companies are not the main actors in the supply chain, but rather
consumers.
During the discussion, the following issues were underlined:
-
Member States underlined the importance of coordination among actors and the
possible added value of a flagship initiative at European level on responsible
management of the supply chain in the garment sector.
-
It was suggested that the Commission could undertake a mapping of what is already
being done in the EU.
-
Having multi stakeholder approach including of traditional and non-traditional actors
is important. It is necessary to include all European stakeholders, taking into account
the complexity of the value chain. Regarding companies, this means including
international companies, producers, buyers, retailers who do not produce but only
design, SMEs, suppliers. The involvement of relevant international organisations, as
well as Trade Unions and CSOs who have a major role to play, is also very important.
-
The need to have the necessary market force, and to have the major players on board
was underlined as a necessity to be able to trigger changes at local level (DE). The
need to give companies responsibilities and to promote examples and best practices
was signalled as a key to success (DG ENTR), as their role is essential as they are
among the main actors who need to act. On how to gain commitments from the private
sector, the opportunity to give companies more influence on the standards in the
countries where they are active was underlined, as well as the involvement of CEOs
(SE). The European Year for Development was mentioned as an opportunity to
increase the incentive for companies to participate. The reputational risk was
underlined as an important driver for companies to act.
-
The global business dimension and the fact that the issue concerns European but also
other global brands should be taken into account to address tailor made programs in
each country where the problems are the most accurate.
-
The risk of companies deciding to stop their production in some countries also needs
to be taken into account.
-
The need to inform and involve SMEs, which need assistance to face these challenges,
was underlined.
-
The need for capacity building and technical assistance for the supply side should be
taken into account (LV). DE mentioned the need for capacity development of auditors
on the ground.
-
Corruption was also identified as an issue to be addressed.
-
There is a need to improve transparency in particular in the intermediate parts of the
supply chain (in particular as regards subcontracting). DE signalled that companies
underlined that they need governments to step in on these issues, and that there is
opportunity for a win-win situation to make the value chain more transparent.
Regarding the objective of increasing transparency in the supply chain, the
competitive dimension should also be taken into account, as suppliers are shared
between international companies.
-
The complexity of the supply chain among suppliers at country level should be taken
into account, to avoid creating two layers of companies in developing countries with
different sets of standards, those producing for exports and those who do not.
-
The need to obtain the buy in of partner government in producing countries to commit
and engage on implementation of rule of law, of existing international standards and
conventions was also underlined. In this regard, it will be necessary to clarify the
possible role of EU and MS with development assistance regarding enacting and
implementing legislation in developing countries.
-
The role of women and girls needs to be recognised in the initiative (SE).
-
The need to improve information for consumers was underlined (LV).
-
On external supervision of EU companies, ES underlined that the WTO had failed to
come up with a mechanism, and suggested that possible EU actions could be part of
the scope of the initiative.
-
NL also suggesting considering antitrust law in the scope of the initiative.
-
The issue of social labelling on textiles was raised (as it had been mentioned by
several Member States during the informal Foreign Affairs Council in July);
companies and CSOs are rather reluctant to create new labels. Some MS underlined
that at this stage there is no need for further legislation but that implementation of
existing legislation and instruments need to be improved. COM underlined that
creating a new European label would not be the objective at this stage of the initiative.
Ratings such as for the A, B, C letters Energy Consumption, e.g. the Higg Index being
developed by the Sustainable Apparel Coalition were mentioned as a possible
alternative to labels to improve consumer information.
-
The need for coordination with ongoing work at OECD level - in particular the
creation of a multi stakeholder platform - was underlined (FR).
-
FR suggested choosing a pilot country (Morocco) in the framework of the flagship
initiative, using the methodology applied for Bangladesh for in-country coordination.
-
The need for an increased coordination at EU level was underlined, as well as the need
to have all MS on board, including those not present in the meeting. The message to
citizens should be that initiatives at national and EU level are mutually reinforcing.
-
The need to have a coherent, coordinated and progressive approach in the preparation
of this flagship initiative was underlined (DG ENTR); at this stage high level political
announcements which might create confusion and promote excessive expectations
should be avoided.
In his concluding remarks, the Chair thanked participants and underlined that the objective
was to involve Member States in a collaborative and transparent way, and that all ongoing
activities are to be valorised. Our efforts will focus on further improving communication,
transparency and sharing of practices and information and coordination. This would result in
increased consumer awareness of what is being done at all levels and showing that the EU and
the Member States are active players. A multi-stakeholder roundtable at EU level could be an
avenue for a more in-depth discussion on the Member States', private sector and EU
approaches on responsible supply chain management in the garment sector.
Next steps:
-
Member States are invited to share documents and supply further ideas in writing. A
list of contact points in the DGs will be sent out.
-
An informal consultation meeting at technical level with all stakeholders including
industry, International Organizations (such as the ILO and the OECD) and CSOs will
be organized in the coming weeks (23 January 2015).
-
Another informal meeting with Member States will be organized early 2015 once the
next steps on the EU flagship initiative are clarified.
-
Minutes will be sent out in the coming weeks for possible comments.