In 2018, an assessment framework was set up to assess companies’ action plans in a consistent manner.
Companies that sign the Agreement undertake to submit an action plan to the Secretariat within a year of signing and to update the plan annually. In an action plan, a company looks at the various elements of due diligence: drawing up IRBC policy; analysing the chain and the materials used; the risk analysis and prioritisation of risks; tackling the risks; and monitoring and communication.
By continually repeating this due diligence cycle, companies accumulate information and gain experience, enabling them to tighten up their goals and also to set new goals.
There are many challenges and risks that companies cannot deal with on their own. Companies can increase their influence by cooperating, for example in achieving a living wage. For this reason, collective projects are initiated within the Agreement in order to work together on these issues.
Assessment framework gives insight into progress
In 2018, an assessment framework was set up to assess companies’ action plans in a consistent manner. The Secretariat uses the framework in assessment meetings. This helps companies to tighten up and improve their action plans. Based on the assessment results, the Secretariat reports on the progress companies are making in due diligence.
Jef Wintermans, AGT Secretariat coordinator and assessor:
‘We learn on the job how to do better’
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‘We learn on the job how to do better’
The Secretariat of the Dutch Agreement on Sustainable Garments and Textile (AGT) holds annual assessment meetings with companies to discuss their action plans and the progress of their due diligence. Jef Wintermans, Secretariat coordinator and member of the assessment team, looks back over the last two years.
Are you satisfied with the results?
‘My answer is two-pronged: constructively dissatisfied. A lot is happening and we’re making progress, but implementation of the Agreement has turned out to be more complex and more challenging than previously thought. We learn on the job how to do better. We’re now at the end of the assessment of the second due diligence cycle. Each year, companies complete a questionnaire, strengthen their risk analysis, and draw up an action plan. Based on the assessment framework that we developed in 2018, we discuss these matters with companies. The questionnaire, based on the OECD guidelines and the United Nations’ Guiding Principles on business and human rights, provides a picture of where companies stand and what steps they need to take in the due diligence process.’
What is it that is so complex?
‘There is a huge range of companies and the effect of this is greater than we had expected. There are small and large companies, fashion firms and companies that make work clothing. Companies that have a long history of involvement in international responsible business conduct (IRBC) and companies that have only just started. Successful companies and companies that are fighting for survival. Some companies buy directly from manufacturers, while others buy through resellers, agents or importers, or do both. And then you also have companies that have been parties to the Agreement since 2016 and companies that have just signed. Every company is different. That makes it very difficult to assess companies in one single way and to compare them.
It’s therefore much more difficult than we thought to quantify the results. We need to look carefully to see which figures really are informative. Because answers such as ‘yes’, ‘partly’, ‘no’ or ‘not applicable’ do not give a full picture. The crucial issue for assessors is how we can be consistent in our work and what exactly we should communicate. When do we find that a company is doing good work, even though its performance is lagging behind, and when do we advise the steering group to have a company’s performance and our assessment of it examined by the Complaints and Disputes Committee? Because the Agreement is voluntary, but it does involve commitments.’
How are the assessments going?
‘We can see and hear that companies benefit from the assessment meetings, because we provide them with a picture of their operations and also help them to work out how to step up their efforts. The Agreement creates a safe environment in which companies are willing to be open about their activities and their struggles.’
When do you consider that a company is underperforming?
‘A company underperforms if it does not meet the requirements of the assessment framework. In any case, after the assessment meeting a company is given two months to catch up. If it then still fails to fulfil the requirements, it has a problem. However, there can be good reasons for a company missing a deadline, such as personal or business problems. Therefore, we always try to clarify whether the company’s senior management really is committed. If a company shows clear commitment, we give it space to make up any deficits.’
Why is transparency so important?
‘Transparency means being open about where you produce and about your risks, dilemmas, and things that go wrong. Every company encounters dilemmas. As a small buyer, how much influence can you have on production in a factory? When should you walk away, and when should you stay? By applying due diligence and drawing up an action plan, companies shoulder their responsibility. They do something to tackle abuses.’
What results have been achieved over the last couple of years?
‘Companies have put a lot of energy into finding out about their chain and compiling the list of production sites. They’ve also worked hard to gain a picture of the risks in their chain. Quite a number of companies have now made structural and organisational changes internally, which have put them in a better position to deal with their responsibilities in the chain. For example, they’ve adapted their ICT system so that they can see where each individual order is produced. Or they’ve strengthened the position of their RBC department, so that the RBC manager plays a prominent role in the purchasing process and has the casting vote.
The next step will be exciting. In the third year of participation, companies are going to communicate about their action plan. This is a big step. Companies that do not communicate attract less attention than those that put their heads above the parapet and dare to be open about their problems. However, that’s the only way to achieve change.’
Can you be satisfied with the progress made if the final goal is still a long way off?
‘Although the process is harder than we thought, we are definitely achieving results and are constantly learning while doing. The goal for 2018 was to have 100 companies signed up and to cover 50 per cent of the Dutch textile market. We have as good as achieved that.
In the previous 20 years, all kinds of things were attempted: reports were written and codes of conduct drawn up, but this failed to redress any abuses in the sector. The Agreement encourages companies to make actual progress in the area of due diligence. It also helps NGOs and trade unions to make contact with companies. And it is extremely important that the Agreement offers a safe environment in which trust between the parties can grow.
Carrying out joint projects helps to raise awareness of International Responsible Business Conduct (IRBC) within companies, with the result that ever more people become involved, including designers, buyers and merchandisers. This helps bring about structural changes.’
Is it also possible to scale up to the international level?
‘International upscaling and cooperation are essential for achieving transition in the sector. For this reason, we devote considerable time to cooperation with our German counterpart, the Partnership for Sustainable Textiles; with the OECD; and with the other national and international organisations that are working to improve the textile industry. The Agreement does not want to be just one more initiative; we want to complement existing initiatives and help to strengthen them. This we do by pulling together, pointing companies towards other initiatives and promoting and using existing instruments in training sessions. We want to be a catalyst.’
Zeeman, Erik-Jan Mares:
‘Tell us what can be done better’
There were four of them: the managing director, the purchasing director, and the two staff members of the RBC & Quality department of Zeeman. This is as it should be when the AGT Secretariat comes for an assessment meeting on the action plan, as it concerns all stakeholders.
‘It was quite a challenging session, I think.’ Managing director Erik-Jan Mares joined Zeeman around a year ago. ‘The people from the Secretariat let us see from their point of view where we stand and what we could do better. Afterwards, they also helped us in improving the plan. We hadn’t set out clearly some processes that are obvious to us. You have to show very clearly what you do and why.
Responsible business conduct is in our genes. We’re always talking about being economical: we’re economical with people, materials, the environment, and society. We already do a lot, but a lot still needs to happen. It’s a step-by-step process.
One such step, for instance, is that in 2020, 25 per cent of our cotton will be sustainable. We are now at 10.5 per cent and by end-2019 we want to reach 20 per cent. Although we’d like to move faster, we have to build things up slowly, so that our suppliers are able to deliver the amounts we need.
Another step is that we have decided to disclose our production sites in 2019. This was a sensitive subject, but we are now convinced that it’s a logical step if you want to be transparent about the chain.
Furthermore, we are transparent about dilemmas and issues that we face. We are open about them to customers, stakeholders, the Secretariat, and the other parties to the Agreement. Examples?
Sustainable materials are sometimes more expensive but even so, we don’t want to raise the sales price of our products. How can we resolve this dilemma? How can we ascertain that a company not only scores well in audits, but is also really working on improvements? And how do we handle the issue of a living wage if it varies from one person, region and country to another?
We’re keen to hear what we as a company can do better. We will definitely continue to tighten up our action plan. Our aim is that in future, everyone will know Zeeman not only for our quality and price, but also because we are transparent and sustainable.’
Company Fits, Evert-Jan Poppe:
‘The action plan keeps us on our toes’
An annual action plan keeps companies on task, notes Evert-Jan Poppe, production manager of work clothing supplier Company Fits.
‘The obligation we have as signatory to the Agreement to revise our action plan annually ensures that we remain alert in our due diligence. In 2019, for example, we’re going to start producing in a new country. Without an action plan, we would probably not immediately carry out due diligence in that country to gain an understanding of the chain, but now it’s the first thing we do.’
Company Fits has work clothing manufactured in various production countries. The action plan, which was first drawn up in 2017, states how the company wants to give substance to the nine priorities in the Agreement, which range from the use of sustainable – or more sustainable – raw materials to encouraging the freedom to establish or join a trade union. ‘We’ve established a timeline for all our goals, with relevant action items, those responsible for them, and deadlines.’
In 2018, a Higher Professional Education (HBO) student did a graduation project on the use of more sustainable raw materials. ‘We’re using that research to reduce our footprint.’
Company Fits is positive about the role of the Secretariat. ‘The people from the Secretariat take a critical look at our action plan, give us guidance for improvement, and ask us about what worked and what did not work. That also keeps us on our toes.’
According to Poppe, the Secretariat also has an important function as a bridge between the companies and other parties that have signed up to the Agreement. ‘We’ve made contact with NGOs that support the Agreement and know a lot about what’s happening in production countries. As a result, we’re now in discussion with UNICEF to see whether we can carry out a joint project.’
WE Fashion, Marijke Willemsen:
‘sustainability check at an early stage’
A thorough screening before you start to do business with a new factory is considerably more efficient than searching for audit reports at a later date. At WE Fashion, this is the way they have been working for years, according to sustainability manager Marijke Willemsen.
WE Fashion only does business with a new factory once sustainability manager Marijke Willemsen has given it her blessing. This has been the case for some six years, she says. ‘It happens 10 to 20 times a year that the purchasing department wants to place an order with a new factory. The buyers ask the intended supplier first to provide recent reports from recognised audit systems and submit them to our sustainability department.’
‘If the information is incomplete or if it is shown that child labour or forced labour is involved, we will not work with that factory. We regularly encounter incomplete information, but we never come across child labour. Forced labour sometimes occurs, for example if workers’ passports are confiscated or if the first month’s salary is retained as a deposit.’
By incorporating clear conditions in its own purchasing structure at an early stage and also by carrying out local inspections, for example of subcontractors, WE Fashion has obtained a much better understanding of the production chain. Willemsen: ‘We only place orders with factories that we’ve approved, so that we have greater certainty as to where and under what conditions production is taking place. Our department’s work slows down that of the buyers, but over the last few years, they’ve come to understand and appreciate what we do. They’re also unwilling to do business with a factory that is unable to provide sound reports.’
G-Star RAW, Sofie Schop:
‘You gain influence through cooperation’
Is it possible for a relatively small player in the worldwide textile market to have any influence? Sustainability manager Sofie Schop of G-Star RAW is very positive. ‘Yes, of course, if you cooperate and dare to share.’
A denim brand can have some influence on its supplier on virtually any issue – that is the firm conviction of Sofie Schop, sustainability manager at G-Star RAW. But there are a few conditions.
‘The first is that you must seek opportunities to cooperate, for example within national and international agreements or with other fashion firms that buy from the same supplier. It’s very good that the industry is working on one single measuring method instead of the many different audits that exist for checking the sustainability status and progress of factories. Cooperation is also needed to ensure that workers earn a living wage.’
Good, long-lasting relationships are the second condition, according to Schop. ‘As a company, we are deliberately working towards doing business with fewer suppliers. We build long-term relationships with those suppliers, so that we can increasingly deal with each other as partners. You don’t have to change everything in one go; it’s a process of continuous improvement. But if, after long discussion, a company does not stick to agreements or is unwilling to change, we will ultimately choose to end our collaboration.’
Another factor that is important for G-Star is: dare to share. ‘Last year, we developed our most sustainable jeans ever. For the fabric, we received the Cradle to Cradle™ Gold certificate. This certified denim, made from organic cotton, has 70 per cent less chemical content. During the production process, 98 per cent of the water is recycled, while the remaining 2 per cent evaporates. We made the knowledge relating to the development of this denim fabric available to others. It’s only by sharing that you can move forwards together. And to do that, you really don’t have to be a big company.’