Ministers, colleagues, dear friends,
It is a pleasure to be with you at this important event. Your presence today is a testament to our shared mission to develop sustainable solutions for ensuring responsible business conduct in the garment and footwear sector, which has been particularly affected by the COVID-19 pandemic.
The pandemic has exposed the fragility of the garment sector value chains, with devastating impacts on workers. While the outbreak created supply and demand shocks, in many instances the industry response to the disruption exacerbated the impact, leading to mass redundancies and lost wages for workers as a result of order cancellations, non-payment or attempted renegotiations.
This is because the initial industry response was mostly reactive and uncoordinated, exposing the fragilities and inequities embedded in the prevailing business models. As a result, workers were left high and dry in countries which have long been power-houses of the global garment sector but which do not grant workers the social protections that we take for granted.
On the other hand, we have seen that companies that had invested in RBC before the onset of the pandemic -- specifically in social dialogue and supply chain engagement structures -- were better placed to mitigate its impacts. One lesson, then, is that due diligence and RBC management systems reinforce supply chain resilience. Responsible businesses are resilient businesses.
Given the experience with the pandemic over the past year, and looking ahead, we must coordinate our efforts to create supply chains that are both responsible and resilient. The common denominator of those efforts is due diligence, based on the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. Due diligence is preventative, risk-based, informed by stakeholders and involves ongoing communication. Harmonising our efforts is the best recipe for resilience across the whole value chain.
Let me highlight our priorities.
First of all, we need to anchor ourselves in widely-accepted benchmarks. The alignment of policies, regulations and practice with OECD Due Diligence Guidance will be important to drive better cooperation, reduce costs, and facilitate consensus on the numerous technical aspects of due diligence. With a common understanding anchored in OECD RBC standards, we can then turn to matter of information exchange. Timely and meaningful data sharing across the value chain is key, not only in times of crisis. More effort is needed to harness digital tools, break down information silos and address key questions about the ownership and value of data generated by due diligence.
Second, dialogue between buyers, suppliers and worker organisations is pivotal to protect workers by holding parties to account for their actions, from poor purchasing practices to non-payment of wages or redundancies. Let’s work together to demand and facilitate these dialogue structures in all segments of the value chain.
Third, sectoral collaboration is essential for companies to increase leverage and scale successful approaches. Industry and multi-stakeholder initiatives play an important role to support and guide companies through this process. However, these organisations must be accountable to their members and rightsholders and demonstrate their impact. Governments are a key actor in this agenda, by driving initiatives to greater alignment, to improve trust and gain greater efficiencies from cross-recognition and harmonised reporting requirements. To this end, the OECD developed its alignment assessment methodology, carrying out assessments of the Sustainable Apparel Coalition, the German Partnership for Sustainable Textiles and the Dutch Agreement on Sustainable Garments and Textiles, with an assessment of Fair Wear Foundation underway, and more in the pipeline. We are encouraged by the leadership of these intiatives to work with us and recognise the importance of self-reflection and improvement.
This crisis should be seen as a turning point, when companies learnt that their business models were in fact putting their very businesses at risk! For responsible and resilient supply chains, the collective shift to more sustainable business models and supply chain management that protects workers and their livelihoods needs to be done now, and in synergy with all stakeholders. You can count on the OECD in this mission!