Shoe industry: Suffering for leather | tagesschau.de

The shoe and leather industry has so far covered up exploitation and violations of human rights – according to the accusation of a European-Asian initiative. She wants to force manufacturers to be transparent. A supply chain law will also apply from January.

In April 2013, the Rana Plaza collapsed in the city of Sabhar, Bangladesh. More than 1000 people died in the textile factory. Ten years after the catastrophe, a law is intended to help improve the protection of workers at suppliers. The Supply Chain Due Diligence Act (LkSG) will come into force in January 2023.

Experts warn that many companies do not yet have a strategy for dealing with the new obligations. Meanwhile, activists are positioning themselves and trying to sensitize consumers, such as the “Together for Decent Leather” initiative. It is an association of seven civil society organizations, including the German INKOTA network and the Dutch research network SOMO. It has set itself the task of improving the human rights situation in the leather industry. They are also funded by the European Union.

Systematic exploitation in the leather industry of Asia

Together with partners in South Asia India, Pakistan and Bangladesh, the action alliance examined the production centers for leather products in the first half of 2022. From the studies, extensive footage and interviews that dem SWR exclusively available, shows that there are serious and systematic violations of international standards in labor law and health protection in the various production phases of the leather goods industry. A total of 347 employees working in tanneries, leather goods factories and informal and home workshops were interviewed in Bangladesh, India and Pakistan.

Informal employment relationships dominate in all three countries: employees often have no employment contract, no compensation in the event of work accidents or illness, and no access to social insurance. In all cases, the low wages are well below the living wage. Workers report being forced to work overtime. Tanning workers are exposed to harmful chemicals. In Bangladesh, for example, 75 percent of those surveyed worked without adequate protective equipment.

“Europe is an important market for leather and leather products made in countries like Bangladesh, Pakistan and India. Germans in particular are big fans of leather shoes and buy more than three pairs of shoes per person,” says Berndt Hinzmann, responsible for human rights and business at the INKOTA network.

He criticizes: “For decades, European brands and retailers have failed to ensure that labor rights are respected in tanneries and factories in Asia. Buyers persist in unfair purchasing practices that do not allow suppliers to improve.”

Supply chain disclosure required

That’s why Dutch research network SOMO assessed the level of supply chain transparency of 100 brands and retailers and found that none publish a list of suppliers. This also applies to the 16 companies that have their headquarters in Germany. Adidas, Puma and Zalando performed best here, each with three fulfilled categories, including public information on the first and second category suppliers, i.e. also information such as on the tanneries or suppliers of raw materials. Eleven manufacturers and brands, on the other hand, do not fulfill any of the categories in the ranking.

“Brands and retailers hide behind complex supply chains. With the current lack of transparency, it is impossible to determine the origin of leather used in branded end products and hold companies accountable for labor rights violations in their supply chains,” concludes Martje Theuws from SOMO.

Confidential Business Information

However, the publication of the supply chains is not mandatory even with the new law. At the request of SWR eight companies replied, some with extensive explanations of how they ensure compliance with supply chain responsibility and with references to industry initiatives in which they are involved or individual company solutions.

Berndt Hinzmann is skeptical about such statements: “Companies like Wortmann or Deichmann claim to already comply with the Supply Chain Due Diligence Act, but without publicly available evidence. The companies fail to provide evidence, particularly that they are aware of the structural risks posed by their purchasing practices exist, have switched off,” says Hinzmann.

The manufacturers disagree with this accusation. To the SWR Andreas Burmeister, Head of Sustainability Strategy at Wortmann Schuh-Holding KG, explained: “The LkSG, to which we are not subject in terms of scope, does not require any general disclosure of this confidential business information, because an obligation to disclose confidential information involves a risk of business loss to the competition leads.”

Christian Hinkel, Head of Corporate Communications at Deichmann, welcomes the new law in principle and tidies it up SWR-Request that his company does not claim to already meet all the requirements of the Supply Chain Due Diligence Act. “If concrete allegations are brought to our attention, we will of course investigate them immediately and also provide information about them,” explains Hinkel.

Companies and associations have overslept development

For many companies, the new law comes at a bad time in view of the exploding energy prices and inflation risks. Also because many companies have so far put off the topic. Experts criticize that business associations and chambers of commerce have failed to engage in constructive measures.

The Berlin lawyer Robert Grabosch was available as an expert to the Federal Government in the development of the National Action Plan for Business and Human Rights and to the Bundestag in the legislative process for the LkSG. He advises companies on German and foreign due diligence laws.

“Many companies that have not long since specialized in sustainable products do not even have a strategy for adapting to the new law and are amazed: their major customers, who have to comply with the law, are now submitting extensive questionnaires and trying contractually shifting their duty of care to medium-sized companies,” says Grabosch. There is a lot of uncertainty about whether such clauses need to be signed and what a smaller company can actually do to put order in its supply chains.

“Many of the 4,000 companies affected started too late with training their employees and with the search for experts in sustainable supply chain management. It’s difficult for those who only start now,” says Grabosch. He recommends that companies recognize the scope of the issue and initiate extensive adjustments in personnel organization, risk management and purchasing policy.

This is also against the background that the EU has just announced tightening of supply chain responsibility. Those affected should then have the right to sue. The traffic light coalition has already declared that it wants to support the EU Commission’s plans for a supply chain law, which are much stricter than the German regulation.