On the occasion of the OECD Forum, Clean Clothes Campaign is once again urging garment companies to immediately ensure that workers are all paid during this crisis and receive the severance they are owed if they lose their jobs.

At the start of the 2022 OECD Forum on Due Diligence in the Garment and Footwear Sector, Clean Clothes Campaign welcomes the strong emphasis on purchasing practices in the official agenda. The OECD Forum aims to galvanize the industry as well as regulators into taking long overdue action to ensure that workers can survive the pandemic and that companies’ purchasing practices create the space for workers’ rights to be respected in the future.

The Severance Guarantee Fund will mitigate the devastating consequences of unemployment for workers in the future by directly compensating workers and financially supplementing or strengthening government social protection programs for unemployment or severance benefits. Brands and retailers would contribute to both funding streams through a fee based on volume sourced from each country, and employer fees would be a percentage of their wage bill in each country. As social protection systems improve, the brand premiums will be reduced accordingly.

The OECD Due Diligence Guidance on Responsible Supply Chains in the Garment and Footwear Sector recognizes the harmful impact of purchasing practices on workers’ rights including low wages. The numerous product cycles or seasons per year associated with the ‘fast fashion’ model, late and delayed payments, and price negotiation strategies requiring cost-cutting by suppliers are all singled out for their potential of adverse effects. The OECD Guidance recommends that businesses: assess whether their purchasing practices contribute to harm; implement control measures to prevent contributing to harm; and develop management procedures that purchasing departments should follow to mitigate against harm.