Think about where come from our clothes

▼Most of the clothing sold in Japan is imported.

Now, in Japan, about 3.6 billion articles of clothing (clothes, underwear, coats, etc.)　are sold annually.

Looking at where the clothing was made,

1.8% were made in Japan, and 98.2% were imported.

So, if you buy products without being particular about "MADE IN JAPAN",

you will notice that the clothes you wear every day are mostly made overseas.

The flow of making products overseas and selling them in Japan

is called the global supply chain.

▼What is a Global Supply Chain

A supply Chain is the system of people and things that are involved in

getting a product from the place

where it is made to the person who buys it.

A global supply chain means the system is worldwide.

For example, the clothing brands such as Nike, Uniqlo, ZARA, or GAP, H&M,

outsource manufacturing clothing to factories overseas.

Brands and factories make a contract that

factory will make XX clothing for them,

and brands give factory 〇 Yen in return.

And the factory doesn't usually contract with one brand,

but with many different types of brands.

So, in one factory,

workers make different types of brands clothing.

If your clothing is "Made in Indonesia",

people in some factory in Indonesia made it.

and it means your clothing was produced in global supply chain.

We don't usually have chance to think about that, but

the clothing has actually traveled a very long distance

before it actually reaches us.

▼What inspired me to learn Global supply chain

I didn't know global supply chain itself.

I just had a chance to meet some Indonesian worker, called Lena

in Japan in 2018.

Lena made some clothing (including Japanese brand)

in one factory in Indonesia before the bankruptcy of the factory.

She told me how she and her colleagues were suffered while working.

For example,

they didn't get proper salary

- below the legal minimum wage, unpaid overtime.

She couldn’t take care of her husband,

when her husband was urgently hospitalized and passed away.

Because she was forced to work for the manufacturing target of the day

at the order of her boss.

She also told me

how they were suffered after getting laid off (bankruptcy).

Because she couldn't pay the tuition fees for her high school daughter,

She had to leave her to a distant relative.

and her elementary school daughter got sick,

so she’s in debt for having enough medical expenses for her.

I was so shocked that I usually wear

cheap clothing (made abroad) without noticing the problem.

That makes me to learn this problem,

and interview the workers in Indonesia.

▼Profit sharing

In the first place,

why do brands have their clothing made

by factories in other countries

instead of factories in their own country and

instead of their own factory?

It's for money.

・The reason of producing overseas

The purchase price for the piece of clothing is lower

as the salary of the workers at the factory is lower.

It's because the purchase price includes the labor cost.

As of June 2022, the minimum wage is 1,041 yen/hour

in Tokyo. It's about 180,000 yen/month.

( if you work for 173 hours /month)

In Jakarta, the capital of Indonesia,

the minimum wage is about 37,572 yen a month.

And clothing factory try to increase profits

by raising the purchase price of clothing,

and by lowering the salaries of workers,

or increase productivity.

It is possible to increase productivity with a new, good machine,

but it costs a lot to buy.　

It's basically easier to lower employee's salary than

to negotiate a higher purchase price.

Both the brand and the factory pursuing for their own benefit.

As a result, the profit distribution looks like this.

This is an example of Bangladesh workers (estimated by a Dutch NGO).

reference link

Profit sharing of one T-shirt

59%: Retailer, seller (Including VAT)

12%: Brand

4%: Local manufacturing plant

0.6%: Worker's salary

In the case of UNIQLO,

they sell their clothing by themselves. (it’s called SPA)

UNIQLO is the retailer and brand,

so the profit is 71%. (Including VAT)

Here’s the diagram which illustrated this structure.

Brand> Factory> Worker

・The reason of outsourcing manufacturing

The advantage of the brand is that the initial cost is low.

(If brands own their own factory,

they need to prepare a factory, buy sewing machines,

and hire and educate people, etc.)

The disadvantage is that it is hard to maintain the quality of the products.

Brands outsource manufacturing to more than just one factory.

For example, UNIQLO outsources the manufacture of clothing (stitching fabrics to make clothing) to 453 factories (21 countries including Japan).

It is necessary to manage them

so that the quality does not differ significantly at each factory.

Although there are disadvantages due to such a system that brands don’t have its own factory, brands are making a profit by this system.

▼ Responsibility of brands

Brands are the most influential in the global supply chain.

It is important for the factory.

The factory borrows money to buy a large number of sewing machines, etc.

or rent these machines.

They plan to make clothing, make a profit, pay off debt and increase the company's sales over the long term.

For example,

If the brands suddenly cancel the Manufacturing Agreement with the factory,

that has an impact on factory management.

sometimes it may lead to bankruptcy.

One factor of brands’ cancelling is the rise in the minimum wage in the factory area.

Originally, many brands select factories in countries / regions where manufacturing costs and labor costs are low.

So, an increase of the minimum wage reduces the benefits of outsourcing.

The conclusion is to change the factory and to change the area with a lower minimum wage.

Of course, the reasons for canceling the contract are not all due to the increase in the minimum wage, but it is a fact that there are such reasons because of the structure of the supply chain.

In this way,

Because it is difficult to say that the brand and the factory are on an equal footing due to their structure (there are no legal restrictions on the brand),

I think it is a problem for the factory to take all responsibility for the factory management (saying “the factory owner’s management skill was poor”)

This global supply chain system takes a toll not only on the factory, but also on the workers there.

As a result of the financial difficulties in factory, salaries fall below the minimum wage, overtime pay is unpaid, factories are not cleaned well, workers was hurled abuse to increase productivity, and their break time is reduced.

Even if workers’ family member is urgently hospitalized,

managers don’t allow early leaving on the way.

In some cases, it goes bankrupt.

Brands may just decide profitably and rationally

and may think, "we don't care about the factory management or the workers’ life.

Their own country should take care of it."

However, I think we must also consider the issues of their own country.

▼ Countries (which factories located) also have problems

So far, I feel that there are three major issues.

★The first is that individual workers in factories do not have enough knowledge of labor law.

We can check something out ourselves or ask someone only when we feel something is wrong.

So their less knowledge of labor law leads to delay that the problem becomes apparent.

The Indonesian worker I actually met said,

"There have been several people who cut the first joint of their fingers with a sewing machine or break their fingers.

There was no financial compensation from the factory.

But I didn't feel it was a problem. "

This is because, as a society, workers do not have the opportunity to know labor law.

I think the problem is that the system for checking for law violations is not working well.

　

★The second is that there is no system in place to provide financial support to the employees when their factory can’t pay salary to them or goes bankruptcy.

If a factory goes bankrupt, a country will pay the unpaid salary on behalf of a factory.

The country also pays money to the workers to help them find a new job

There are both in Japan,

but in some countries, there is no such system or not enough system to cover them.

If a company goes bankrupt, the workers will be soon suffered without money.

(They normally can only borrow money at a high interest rate, such as 25%,

which leads to the cycle of borrowing to repay the debt) 　

★Third, the minimum wage setting is too low, which means that you cannot live on the minimum wage alone.

If the minimum wage is too low, you will not be able to save money because you spend almost all of your salary in your daily life.

Then, when you can't work due to bankruptcy or illness, your life will soon become difficult.

In fact, in the case of Indonesia,

some people started borrowing soon after the factory salaries started to be delayed.

After the bankruptcy, some people passed away because of the disease.

(even if the disease could be cured, they couldn’t pay for the medicine.)

★After I stayed at their house and interviewed them,

I felt I must think of the society which they belong to, or something related to their daily life,

instead of only focusing on the issue itself.

I don’t want to say Japanese system is the best

but our society has different problems in different situations.

when we think about global supply chain problem,

we must try to aware that our thinking /sense might not be relevant to this issue.

For example,

if you "worked in the manufacturing industry for 20 years and were dismissed at the age of 40," in Indonesia,

you would immediately need to borrow money, leave your child to a relative in village/the country, and sell your own food or something on the streets of a city.

* In Indonesia, where there are many young people, it is difficult to get a new job at the age of 40 or older (at least in the manufacturing industry) even if you have relevant experience.

I think brands need to consider the issues of a country or the system which designed to consider the issues of a country is necessary.

(for example, collecting money from the brands which orders from the factory in advance for monetary compensation in case of delayed wage payment or bankruptcy)

▼ Certification of fair labor

There are private organizations called FLA (Fair Labor Association).

FLA gives companies (brands) the endorsement that "brands’ subcontract workers work properly and try to solve it when the problems occur in their factory".

it’s like the Fair Trade Marks.

When certificating the company,

FLA checks whether the working environment of the subcontracted factory that the company outsources is appropriate or not.

Specifically, whether the monitoring system of the factories (manufacturing industry, or agriculture) meets the international standards.

It will be rigorously checked over several years.

After certification,

FLA conducts regular surveys at random factory, and if any problems are found, they will report to the brand that “urgent improvement is required”.

In addition, FLA will investigate whether the complaint (illegal act) exists in response to a complaint from a third party (workers at a factory).

FLA requires companies to respect, comply with global standards (ILO standards) and local laws where factories are located.

FLA is a private institution and is not enforceable.

In addition, it takes time to investigate a complaint from a third party because they confirm many parties to check the situation objectively.

It may not be suitable for dealing with the case where the factory goes bankrupt,

because the workers are forced to borrow money during that time with high interest rates.

Even if the brands are the members of FLA,

Their factories’ working environment is not always properly maintained.

In fact, the worker I met in Japan makes products for FLA certified brands in the factory.

It may be good if we think of FLA as one of many other options to maintain proper work environment.

▼ Other than legal regulations

There are no legal restrictions on brands, but due to the influence of international NGOs, each brand is now publishing a list of outsourced factories.

This is a big trend, and it can be said that parts of the global supply chain are more visible to consumers.

In addition, the case is increasing that the brands are paying factory workers when factories are closed.

▼ What is the solution

I personally liked cheap clothes rather than expensive clothes.

After learning about this problem, I changed to buying clothes that were bit expensive and as long-lasting as possible.

Even so, I cannot know the daily life of the person who makes it, so as a consumer, I feel that it may be involved in the so-called exploitation structure.

I think it is necessary to take measures from various directions.

▼参考：規制化の流れ

1970年代　多国籍企業規制　スタート

　1975年　多国籍企業センター（UNCTC）設置　企業監視の為

　1976年　OECD多国籍企業ガイドライン　策定　＊法的拘束力なし　

1997年　ILO多国籍企業宣言　策定（多国籍企業及び社会政策に関する原則の三者宣言）

1990年代　生産拠点の海外移転が加速

　1996年　ナイキの児童労働　アメリカの雑誌ライフの記事に

　サッカーボールを作る　パキスタンの子供（12歳）

2000年　OECD多国籍企業ガイドライン改訂

　国連グローバル・コンパクト　提唱

　NCP　各国に設置（National Contact Point、問題解決支援の連絡窓口）

2011年　

　①　OECD多国籍企業ガイドライン改訂　

　　追加「企業は、自社・取引先において、人権を尊重。人権侵害を防止しなさい」

　②「ビジネスと人権に関する国連指導原則」（国連指導原則）策定

2013年4月　ラナプラザ事件　バングラディッシュの工場が崩壊

　1134人の労働者が死亡、2600人が負傷。

　＊工場建物に亀裂が見つかったが、オーナーは服の生産継続を命令。

　　もともと、生産量を増やすため、違法に工場を拡張（6階から8階へ増設）、

　　工業用でない建物に製造用の機械を置くなど、構造上問題があった。

2017年7月　ILO多国籍企業宣言（多国籍企業及び社会政策に関する原則の三者宣言）　改訂