Soon after the COVID-19 pandemic began, GFEMS and its partners designed a short-term aid program to support at-risk workers and factory owners in the informal apparel or Ready-made Garments (RMG) industry in Bangladesh. In August and September 2020, the Fund’s partners surveyed worker households and factory owners in the industrial hubs of Keraniganj and Narayanganj to identify recipients for this emergency support. Importantly, this survey also provides a snapshot of vulnerability in these high-risk communities where research and investment have historically been scarce. In addition to informing the Fund’s emergency response activities, this data may help the anti-slavery field more effectively design and deploy aid to serve this population.

Since the Rana Plaza disaster, formal factories that produce for global brands have improved their working conditions in response to increased corporate and government oversight. The country’s informal apparel workers and RMG factories primarily produce for the domestic market or work as under-the-table subcontractors and, as a result, have not benefited from the same progress. Further hampering progress, there is relatively little data available on the rates and nature of forced labor in this informal RMG sector.

The data presented in this briefing were previously unavailable for informal apparel workers in this region, making the data extremely valuable to governments and NGOs in designing aid and programming.

This briefing addresses that data gap by sharing findings from the survey of nearly 2,000 RMG workers and 200 factory owners conducted from August through September of 2020. These findings illustrate the devastating consequences of the COVID-19 pandemic on the informal worker communities, an already vulnerable and under-addressed population. In particular, the data illustrate the overwhelming risks faced by informal factory workers as they recover from the immediate impacts of the pandemic: widespread unemployment, difficulty repaying debts, and – for most families – less than one week of food supplies in their home. The findings also reflect the scarcity of government and NGO aid in both areas, but particularly Keraniganj.

Select Key Findings

Few workers reported being provided personal protective equipment or working in factories where preventative measures such as social distancing or temperature screenings.

In total, 1,031 informal worker households and 77 factory managers in Narayanganj and 832 informal worker households and 121 factory managers in Keraniganj were interviewed. All told, these findings paint a picture of exceptional vulnerability in both the communities.

Despite the informal apparel population being extremely vulnerable, almost none received support from the Government or NGOs.

The findings indicate heightened financial vulnerability among surveyed informal apparel workers. The majority of workers, including nearly all in Keraniganj, reported new or exacerbated debt in the last month; those figures correspond with the majority of respondents who experienced reduced employment in the same time period. Almost no workers in Keraniganj reported receiving support from the Government of Bangladesh, NGOs, or their employers.

Narayanganj, comparatively, has a more active NGO presence and, as a COVID-19 “Red Zone,” received more government support. These two factors explain why a higher percentage (67.5%) of workers reported receiving Government or NGO support. This support was often insufficient, however. Nearly all worker households were food insecure, with less than one week of food supplies available.

The Fund’s apparel programming in Bangladesh aims to respond to these and other critical vulnerabilities faced by informal workers. However, these findings are a reminder that greater investment in and attention to informal RMG workers, particularly in Keraniganj, continue to be necessary. Coordinated support from governments, civil society, and the private sector can speed these worker protections as the industry strives for a responsible recovery.

For more findings, download the briefing.

Key Findings

1. COVID-19 is exposing the power imbalance between buyers and suppliers
2. RMG workers, particularly women, migrants, and informal workers are especially vulnerable
3. The COVID-19 pandemic has seen an increase in the risk of forced labor

For more details and recommendations for action, download the briefing.

Interested in even more information? Download the full report for more details on findings, implications, and methodology.

*This brief was prepared with support from the Foreign, Commonwealth and Development Office (FCDO) and the Global Fund to End Modern Slavery (GFEMS). Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of FCDO or GFEMS

In 2020, as the world adapted to the COVID-19 pandemic, the Global Fund expanded to Uganda and Kenya with a new suite of partners, and increased our funding in India and Bangladesh, and as our earliest programming began to show high impact. Through the year, we supported over 13,000 people in financial security, reducing their risks of modern slavery; engaged 6,300 plus people in awareness programming, and provided direct COVID relief to 1,700 survivors and at-risk people in India and Bangladesh.

These programs were made possible with funding from the United States Department of State, the Norwegian Agency for Development Cooperation, and the Foreign Commonwealth and Development Office.

GFEMS is working with Social Accountability International (SAI), with funding from the UK Foreign, Commonwealth & Development Office (FCDO) to disrupt the prevalence of modern slavery in the ready-made garment (RMG) sector in India. As part of the Fund’s Apparel and Manufacturing portfolio, SAI will develop a digital platform to incentivize and support improvements in labor compliance by preferentially linking ethical suppliers with buyers. Ultimately, SAI’s platform will reduce unauthorized subcontracting, a key driver of forced labor.

There are an estimated 12 million workers employed in India’s RMG sector, though that number is likely to be higher due to the uncounted home workers and employees of illegal or unauthorized subcontracting facilities. Factories in India’s RMG sector are known to drive multiple indicators of modern slavery, including mandatory overtime work, unsafe working conditions, and unauthorized subcontracting. These conditions are brought on, in part, by poor understanding of the connection between strong labor practices and the opportunity for factories to be reliable and efficient suppliers.

While these problems are well known, there are few opportunities for buyers to gain full transparency into their supply chains and for suppliers to improve their production planning. Both factors would incentivize and enable better social compliance.

SAI’s project will fill these gaps by developing a digital platform to combine suppliers and buyers and a suite of tools to help both parties improve their labor practices. Aligning with the Fund’s intervention framework, this project addresses the demand for cheap goods and services and aims to transform the corporate environmental norms that allow slavery to persist in the sector. 

Leveraging SAI’s existing work in Bangladesh, the project will develop tools and training to improve buyers’ purchasing practices and suppliers’ capacity and production planning. Helping buyers manage their purchasing orders and suppliers plan their production schedules will reduce the risk that suppliers will take on the unrealistic targets that result in unauthorized subcontracting. Unauthorized factories sit outside government regulation and most social audits and therefore present a much higher risk for forced labor violations. SAI’s tool will expand on existing data sets by quantifying the effects of purchasing practices on supplier production capacity—e.g. the effects of  unpredictable volumes, last-minute order changes, design changes, long payment periods, etc. This will help buyers and suppliers to better predict supplier capacity and reduce the likelihood of subcontracting.

The project also represents a deepening commitment to the Fund’s work on supply chain management and risk mitigation efforts. GFEMS has also created an award winning Automated Forced Labor Risk Detection tool, which helps buyers to detect risk of forced labor in their supply chain with 84% accuracy. Additionally, GFEMS is funding ELEVATE to develop a predictive model to help brands identify risk of unauthorized subcontracting in their supply chains and take remediation steps.

GFEMS looks forward to sharing learnings from SAI’s work with stakeholders in India’s RMG sector. Learn more about the FCDO partnership, the Fund’s portfolio, and scoping research.

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GFEMS is proud to share the launch of a new portfolio of interventions and innovations with our partner, the UK Foreign, Commonwealth, and Development Office (FCDO). The portfolio is expected to total approximately 9M USD. 

The FCDO portfolio represents deepening investments in India and Bangladesh, following the inaugural GFEMS portfolio launch in late 2018, and two additional launches with Norad and the US State Dept. Office to Monitor and Combat Trafficking in Persons earlier this year. 

Originally scheduled to launch in spring 2020, all of the projects in this portfolio have been adapted to reflect and respond to new needs due to the COVID-19 pandemic. Working with our partners on the ground, these projects are now better designed to mitigate exacerbated vulnerability, adjust to remote environments, and contribute to responsible recovery. 

“The FCDO portfolio reflects thoughtful, nuanced, and deliberate action to disrupt modern slavery.”

— Helen Taylor, Director of Programs

Prior to project launch, GFEMS engaged in extensive scoping and design phases to identify the geographies and sectors with the highest potential for impact. The portfolio, designed based on the findings from that efforts, addresses the following opportunities: 

• Overseas Labor Recruitment in Bangladesh 
• Commercial Sexual Exploitation (CSE) in India
• Forced Labor in the Apparel Sectors in India and Bangladesh. 

GFEMS is funding a total of seven projects across these opportunities:

• IJM– Strengthening Systems to Protect CSEC Victims and Sustain Freedom in Maharashtra
• Seefar– Empowering Children, Families and Communities to End Commercial Sexual Exploitation of Children
• BRAC– Reducing Forced labor in Informal Ready-made garment factories in Bangladesh with Sustainable Livelihood Opportunities
• SAI– Improving Buyer-Supplier Engagement, Purchasing Practices, and Capacity/Production Planning India’s Informal Ready-Made Garment Supply Chains
• ELEVATE– Safestep: A Responsible Recruitment Platform for Safe Migration in Bangladesh
• ELEVATE- Laborlink: Disrupting the Prevalence of Forced/Bonded Labor in Bangladesh Informal Ready-Made Garments
• ELEVATE- Developing Predictive Analytics Tools to Disrupt Forced and Bonded Labor in India’s Informal Ready-Made Garments 

Projects within the portfolio address the key pillars of the Fund’s intervention framework– supply, demand, and enabling environment of modern slavery. They address core challenges that prevent sustainable reduction in prevalence. 

Sustainability is a key theme across the projects, and across the Fund’s wider investment portfolio. GFEMS designs programs and strategies for future investments with sustainability in mind. Funding focuses on both projects with high potential for replication and scale,  and those that leverage both national priorities and market demands. All projects are informed by, and tailored to, the populations GFEMS seeks to serve. Within the FCDO partnership, GFEMS specifically targets sustainable changes in supply chain practices, project sustainability through increased government and private sector engagement, and sustainable livelihoods for survivors. 

“The FCDO portfolio reflects thoughtful, nuanced, and deliberate action to disrupt modern slavery. The Fund worked closely with partners to develop holistic programming that is based on the best available evidence, but also flexible enough to respond to evolving needs in the field. We are excited to launch these programs with our incredible partners and grateful for the support of FCDO,” said GFEMS Director of Grant Programs, Helen Taylor.

GFEMS will share more information about the portfolio, projects, and our implementing partners in the following weeks. We look forward to sharing the impact, successes, and lessons learned from this portfolio. 

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Tamil Nadu is India’s biggest textile hub, known particularly for its yarn manufacturing capabilities. The southern state generates more employment in the spinning industry than any other state in India. Mill workers in Tamil Nadu, however, are highly vulnerable to forced labour conditions.

To build the business case for fair labour conditions in the apparel sector, GFEMS commissioned Wazir Services to investigate conditions of forced labour in spinning mills in the Indian state of Tamil Nadu. The results of this research, investigation into existing and ongoing efforts for improvement within mills, and analysis of the financial impact of a concrete set of improvements in labour conditions are shaping the Fund’s intervention strategies in India’s apparel sector under its partnership with the UK Foreign, Commonwealth, and Development Office (FCDO).

Labor and Production Challenges in Tamil Nadu’s Textile Sector

Workers in Tamil Nadu’s spinning industry face challenges including but not limited to: sexual harassment, high workload, lack of standard welfare or human resource policies, harsh working conditions, and non-payment of wages due to an undefined wage structure and loopholes in legislation. Within the last decade, the state has experienced an influx of vulnerable migrant workers from other states within India, reaching levels as high as 50% of the total workforce.

Despite high levels of migration, however, migrant workers increasingly look for work in the service industry, or other less strenuous jobs, where they feel they are more relaxed and compensated better. 

As a result, mills are experiencing a labour shortage.

To offset this labour shortage, and in contrast to other states in India, Tamil Nadu also exercises longer working hours, usually 12 hour shifts This is the primary reason for high labour attrition and absenteeism in mills. The annual average attrition levels in the industry are as high as 20%.

As a result of the labour shortages, mill workers experience increased pressure to produce the same amount of yarn with a smaller labour force. This pressure adversely affects the quality of the product and/or overall productivity, which in turn negatively affects sales and further exacerbates financial strain on mills. The average utilization level of a spinning mill in Tamil Nadu was reported at 79%, over 15% lower than the utilization level of the average Indian mill at 95%.

What We Learned

Wazir’s research suggested there is a business case demonstrating long term profitability of fair labour practices that could incentivize mill owners and managers to improve conditions.

In short, labour condition improvement initiatives both reduced prevalence of forced labour conditions for workers and increased performance and profitability of the mill.

Due to existing NGO initiatives raising awareness around labour rights, owners and managers at medium and large mills are open to labour conditions improvements. Changing their operational and managerial practices with regards to labour conditions can make them more compliant, more attractive to brands, and more profitable. Wazir identified 6 key initiatives currently being implemented in a number of mills across Tamil Nadu as drivers of reduced prevalence of forced labour:

In mills that implemented labour conditions improvement initiatives, Wazir identified two main drivers of increased performance and profitability:

• Low Attrition & Absenteeism. Low attrition and absenteeism result in higher utilization, further resulting in higher production and sales.
• Workers’ Morale & Concentration Levels. Healthy and satisfied workers perform better, are more productive, and produce higher quality products.Fixed working hours, a safe working environment, and fair wages can ensure that workers’ morale and performance level is high.

In short, labour condition improvement initiatives both reduced prevalence of forced labour conditions for workers and increased performance and profitability of the mill.

Wazir’s research also found that good labour practices had considerable positive impact on operational performance parameters such as productivity, utilization, quality, and yarn realization. This improvement in operations not only drives higher production and sales, but also reduces the manufacturing costs, in turn leading to higher margins.

GFEMS is enthusiastic that this research is a first step towards building a comprehensive business case for improvements in labour conditions in spinning mills. Achievement of a comprehensive business case requires and can be used to continued engagement with spinning mills, industry associations, and the government about good labour practices and potential win-win solutions. By identifying the structure of labour trends and the key drivers of forced labour within mills, as well as better business practices showing positive results, this research has paved the way for future GFEMS interventions in this subsector.

To learn more about our findings and the textile sector in Tamil Nadu, download the briefing.

Home-Based Workers (HBWs) are an integral part of India’s apparel sector. They represent a significant share of employment in the industry with an estimated 9.2 million individuals. They produce textiles, stitch garments, and add embellishments or embroidery to fabrics and apparel. Despite their involvement in a multitude of activities across the garment value chain, HBWs remain largely invisible and experience some of the worst forms of forced labor, which often go undetected.

HBWs are often overlooked when policies, regulations or services are designed. Most lack access to basic services, are not protected under labor or employment law, and their contracts and transactions are not regulated by commercial law. Further, policymakers lack understanding of how wider economic trends impact HBWs. Economic conditions like inflation increase the price of a home-based garment unit’s inputs, recession reduces demand for their goods, and competition increases during economic downturns.

The result is a high risk of vulnerability of HBWs to forced labor conditions.

To inform the Fund’s investment strategy under its partnership with the UK Department for International Development (DFID), GFEMS commissioned Weave Services to conduct targeted research to better understand the scale and scope, prevalence patterns, and drivers of forced labor conditions within India’s home-based apparel sector.

What we learned

• Home-based garment units are concentrated across 8 states in India (West Bengal, Uttar Pradesh, Gujrat, Tamil Nadu, Maharashtra, Andhra Pradesh, Karnataka, and the National Capital Region). These states are also the leading manufacturing hubs of ready-made garment products.
• NCR, including the cities Delhi, Gurgaon, Meerut, and Noida, was found to have the greatest density of home-based enterprises.
• Out of the eight states, National Capital Region (NCR) has the greatest enterprise density with 52 home-based units per sq km.
• Based on Weave’s survey, which identified 14 indicators of forced labor categorized as either “Involuntariness” or “Menace of Penalty”, forced labor conditions were present in 55 percent of sampled home-based textile and garment households in NCR and Uttar Pradesh. The most common indicators of forced labor was wage withholding often in conjunction with deception or intimidation/threats.
• Despite rich skill sets, HBWs are paid minimal wages relative to the Free-On-Board value of the garments.
• The primary reason for these low wages is the proliferation of contractors between buyers and workers. Contractors pocket 30–40% of the piece rates, limiting the earnings of HBWs.

Existing solutions and paths forward

Weave analyzed existing initiatives from eight states in India and shortlisted a group of 13 initiatives, falling into nine categories, based on scalability and impact. This analysis showed that there are already a number of initiatives underway in the rights awareness and policy making arenas. However, rights awareness alone cannot lead to a full transformation of the systems enabling forced labor. Aligning with the Fund’s overall approach to sustainable impact, Weave proposed three key solutions that, when designed to work together, can reduce the prevalence of forced labor for HBWs in India’s apparel sector sustainably and at scale.

13 existing and potential initiatives, falling into nine categories, Weave identified as interventions to pursue.

• Short term: Upgrading skills set of HBWs through training programs. The difference between existing schemes and this program lies in the post training activities, which aim to engage and facilitate jobs for graduate trainees as well as data collection to adequately measure the impact of training.
• Mid Term: Increasing the visibility of HBWs by partnering with businesses and mapping the complete supply chain.
• Long Term: Creating an ethical supply chain network across targeted regions and connecting HBWs with their end-buyers through a marketplace platform, thus formalizing and eliminating layers of sub-contractors.

This research is being used to guide the Fund’s strategy in the apparel sector in India.By identifying the structure of home-based supply garment chains and the key drivers of slavery, as well as potential solutions, it has paved the way for future GFEMS interventions in this subsector, in collaboration with both government and private sector stakeholders. In particular, GFEMS recognizes the importance of improving transparency of home-based workers in the supply chain and engaging with all layers of the supply chain (buyers, manufacturers, subcontractors) to improve labor practices for home-based workers.

To learn more about our findings, download the briefing.