May 05, 2021

Business and Human Rights: Fashion Focus – A Proposal for New EU Legislation on a Living Wage


In a Report published in April 2021, The Circle, an NGO that champions equal rights and equal opportunities for women and girls, proposed an EU regulation specifically aimed at achieving a living wage for workers in the garment industry. As the fashion industry emerges from the COVID-19 pandemic – which has brought renewed attention to complex supply chains and the conditions of workers in garment factories – Jessica Simor QC, author of the Report, argues the need for a legal framework to protect garment workers from exploitation.

The proposal comes off the back of the EU’s commitment to introduce a mandatory human rights due diligence law, and other initiatives currently progressing at the EU-level, which indicate considerable political will to introduce measures that identify and remediate human rights harms in global supply chains.

The Circle’s draft regulation would apply to all imports and sales of garments and footwear in the EU market from “garment and footwear (GF) producing countries”, i.e. countries from which imports of GF into the EU exceed a total set annual value. The central objective of the draft regulation is to achieve an increase in wages paid to garment workers, “in accordance with the EU’s commitment to sustainable development and the protection of human rights, as well as the need to protect EU consumers from social dumping and from purchasing goods produced in breach of human rights standards.

In its simplest form, The Circle’s proposed draft regulation sets out a three-step process:

  1. The European Commission shall identify and set out in the regulation “high risk low-wage countries”. Under the proposal, a “high risk low-wage” country is one where the statutory minimum wage falls below the wage risk point calculated by the Commission. The Report emphasizes the difference between a “statutory minimum wage” and a “living wage” – the former “comes nowhere close to being enough to support a decent life”.
  2. Any importer and/or trader of goods produced within a high risk low-wage country shall be subject to additional due diligence requirements, import verifications and transparency expectations. Import due diligence requirements include verifying that the products were made by workers paid a living wage and that the right to collective bargaining is guaranteed.
  3. Infringements shall be sanctioned by effective, proportionate, and dissuasive penalties. This would include potentially criminal sanctions for directors of the importer and/or trader.

The Circle’s proposal adds another voice to the debate calling for actionable solutions to protect workers’ rights, and supplements the discussion around the EU’s approach to post-pandemic recovery and mandatory due diligence proposals. It is also indicative of increasing stakeholder and investor support for greater protection for workers in supply chains – for example, see our recent Blog Post on investor calls to address modern slavery.

The publication of The Circle’s Report was accompanied by a 12 minute documentary, available here.

The post Business and Human Rights: Fashion Focus – A Proposal for New EU Legislation on a Living Wage appeared first on Eye on ESG.

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