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The Traidcraft Exchange

TX

Traidcraft Exchange are now publicly 'trading as' Transform Trade (since September 2022), however, our legal name remains Traidcraft Exchange.

Lobbying Activity

Meeting with Suvi Leinonen (Cabinet of Commissioner Jutta Urpilainen) and Stichting Fair Trade Advocacy Office

28 Apr 2022 · sustainable textiles strategy

Meeting with Thierry Breton (Commissioner) and European Environmental Bureau and

23 Mar 2022 · Views of group of civil society organisations regarding the EU strategy for sustainable textiles

Meeting with Helena Braun (Cabinet of Executive Vice-President Frans Timmermans) and European Environmental Bureau and

22 Mar 2022 · Circular Economy and EU Strategy on Textiles

Meeting with Lucrezia Busa (Cabinet of Commissioner Didier Reynders) and European Environmental Bureau and

22 Mar 2022 · Corporate Sustainability Due Diligence

Meeting with Andrea Beltramello (Cabinet of Executive Vice-President Valdis Dombrovskis), Caroline Boeshertz (Cabinet of Executive Vice-President Valdis Dombrovskis) and

10 Mar 2022 · Sustainable Textile Strategy

Response to EU strategy for sustainable textiles

2 Feb 2021

Traidcraft Exchange (TX) welcomes the roadmap on the EU strategy for sustainable textiles and invites the European Commission (EC) to consider following observation. Objective The roadmap presents an ambitious program to develop and deliver a comprehensive EU strategy for textiles. While it aims to tackle the various challenges characterising the sector, such as environmental related impacts, it should give more attention to specific social and human rights impacts in the EU and abroad. Root causes In order to deliver, it is crucial to look at the root causes and vulnerabilities in the supply chain.In this respect, the COVID-19 crisis has both revealed and exacerbated existing fragilities. When confronted with steep drop in sales, numerous EU garment brands and retailers responded by suspending or cancelling orders mid-production, refusing to pay for completed orders (some already shipped) and/or demanded improved payment terms and significant discounts to the agreed contract price to accept them. The impact of EU brands’ practices on clothing exporting countries, and individual workers (mostly women) is significant as they are heavily dependent on garment exports. The cancellations have led to mass unemployment among garment workers , has pushed many manufacturers into or near bankruptcy and has generated significant waste of raw and semi-processed materials. Power imbalances and one-sided contracts. The textile sector has been widely known for the unequal power relations between lead brands their suppliers, which has been confirmed by the ILO. Because of the buyer driven character of the sector, lead firms can dictate to their suppliers the contractual terms of the production activities to their advantage. These include time frames; prices brands are willing to pay and quality imperatives. Such power disparities and imbalances in bargaining positions can lead to unfair trading practices (UTPs) in these relationships along the textile supply chains. These business-to-business practices deviate from good commercial conduct instead of unilaterally imposed by one trading partner on another. In the clothing sector, the behaviour of EU clothing chains can qualify as unfair, namely disproportionate low buying prices being negotiated, ambiguous contract terms (allowing flexibility for changes to be imposed, short lead -times for the manufacturing period required, contracts contain unfair penalty clauses, payment terms are poor and broad unilateral cancellation clauses. EU has a previous track record in curbing abusive/unfair business practices The EU has cautiously constructed a limited framework against UTPs, including the unfair commercial practices directive and the directive on unfair practices agri-food sector. Despite this growing regulation limiting contractual freedom to curb abusive and unfair trading practices, there remains a regulatory gap when it comes to the textile sector, which is important to tackle to combat human rights abuses as well as waste in textile supply chains. Regulating abusive purchasing practices will stabilise supply chains, and de-facto reduce waste, allow supplier businesses to plan and ensure better respect with labour rights. Recommendations By allowing UTPs to persist, the possibility for sustainable brands to treat suppliers fairly are undermined. Responsible brands and retailers still must compete in the consumer market with other businesses using a business model based on UTPs. Since much of the key innovations which are needed in textile supply chains, especially considering a circular economy, need to arise out of the collaboration between retailers and suppliers. We therefore recommend examining closely how unfair trading practices cause and contribute to negative human rights and environmental impacts and recommend that the Communication considers legislative measures to tackle these UTPs.
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