The Devil Is in the Detail: The EU Directive on Corporate Sustainability and Homeworkers in Global Supply Chains

A garment worker stitches in Tiruppur, India, during the Covid-19 pandemic

17 June 2024

On the 11^th anniversary of the collapse of Rana Plaza – the deadliest accident in the history of the garment industry – the Parliament of the European Union (EU) finally, on 13 May 2024, voted in favour of the Corporate Sustainability Due Diligence Directive. Companies over a certain size that are registered or selling products in the EU will have to ensure that the human rights of workers in their supply chains are respected. For the first time, the legislation will cover all supply chain workers, including homeworkers.

“Fast fashion” brands from Europe squeeze their suppliers from Asia and Eastern Europe to make products as quickly and as cheaply as possible. These suppliers in turn force factory workers to work overtime without pay and subcontract production to invisible workers in workshops and in homes. France and Germany introduced laws based on the UN Declaration of Business and Human Rights to ensure that companies take responsibility for the workers in their supply chains. But the legislation ignores the many tiers of typical supply chains; only workers in first-tier factories are covered.

In 2020, WIEGO and 14 members of HomeNet International in eight countries strategized to influence the EU to include workers in informal employment, especially homeworkers, in the Directive.

Deepening relationships with key allies

We deepened relationships with two important allies: the Clean Clothes Campaign (CCC) and the Asia Floor Wage Alliance (AFWA). The CCC is a network of over 200 organizations and trade unions from Europe and Asia. As a member of a Brussels-based coalition of NGOs, the CCC is at the coalface of EU law-making processes. AFWA is an Asian-led network of trade unions and labour rights organizations.

Identifying key messages

Three issues were especially contested: (1) Which businesses should be covered by the legislation – big companies or also smaller enterprises? (2) Which workers should be covered – only first-tier factory workers, or all workers? (3) How should laws be enforced – by social audit companies, or through courts?

We made several arguments for why the legislation should apply to all workers in all tiers of the chain, including homeworkers:

Legislation that covers only factory workers ignores the real structure of supply chains as many industries are characterized by long supply chains: production takes place in factories, workshops and homes. In India, almost 90 per cent of garment sector workers are employed in workshops, many of which subcontract to homeworkers. A survey of 340 garment factories in Delhi and Bengaluru showed 58 per cent of surveyed factories outsource to homeworkers.
Legislation that covers only part of the workforce incentivizes factories to subcontract production to workers who are not covered.
If labour rights are only for some workers, the cost of “upgrading” some workers’ terms and conditions of work is borne by other workers who are not covered by the legislation – informal workers in factories and subcontracted workers in workshops and homes – rather than by employers and brands.
This is a gender issue. In the textile, garment and footwear sectors, 80 per cent of the workforce is female and women are always found in the most insecure work: casual work and homework.

The CCC and the Brussels-coalition decided that it was a top priority for the Directive to include all tiers of the chain, including homeworkers.

On the question of enforcement, the WIEGO network decided to focus on worker-driven access to “justice from below”. We wrote a policy brief for the Friedrich Ebert Stiftung, which also published an interview with WIEGO’s then Law Programme Director. We joined other organizations in an open letter to EU policy-makers stating that enforcement through social audits had failed workers, and making recommendations for workers to access justice.

Building the capacity of organizations of homeworkers to engage in advocacy

WIEGO, HNSA and HNSEA held webinars with 14 homeworker organizations from eight garment production countries. Together, we established a platform of demands directed at EU policy makers that was submitted to the EU Commission by eight organizations.

On 9 November 2021, the WIEGO network and allies sent an open letter to every EU Commissioner to voice the demands of workers, including homeworkers. Executive Vice-President Věra Jourová and Executive Vice-President Valdis Dombrovskis assured us that the voices of the workers had been heard. On 23 February 2022, the Commission’s draft Directive was published – a victory for homeworkers: it included all workers in all tiers of the chain.

Engaging with the trade union movement

As the EU Parliament deliberated, our focus shifted.

In December 2022, Zehra Khan, the General Secretary of the Home-based Women Workers’ Federation of Pakistan, joined a trade union delegation in Brussels to meet with the media, policy makers, trade unionists and the CCC network. She participated in a panel discussion at the European Parliament.

Zehra recalls, “The politicians we met, from the leftist party to the conservative party, were very concerned about the situation in Pakistan and what the employers, especially the brands, are doing in our country, so they're very keen to listen…. And they gave a very positive response on all these things, especially regarding … that they have to be transparent with the list of workers: who the brands are giving the work [to], how many contractors are there. So that was a very amazing thing.”

WIEGO’s Organization and Representation Programme organized a dialogue among leaders of homeworker networks and trade union leaders. Elspeth Hathaway, senior policy advisor for IndustriAll Europe, Judith Kirton-Darling, the deputy general secretary of IndustriAll Europe, and Stefan Clauwaert, senior legal and human rights advisor for the European Trade Union Confederation (ETUC) committed IndustriALL and the ETUC to fight for the final Directive to include all workers, including homeworkers.

What’s next?

EU countries have two years to translate the Directive into law. The real work begins now; every country must ensure that its law covers all workers in the whole supply chain. Module 12 of the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector provides guidance on how to protect homeworkers but, as we know, the devil is in the detail!