What is take of Indian apparel industry on its transparency?

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What is take of Indian apparel industry on its
transparency? In India, even today, many sewing
operators who are working in apparel
manufacturing units for months or for even years
do not know the name of their factories. The
address of their factory and the name of their
supervisor is the maximum that they know about.
On the other hand, HM is the first retailer
across the globe to list individual supplier
details for each garment on its website to
increase transparency in an industry with high
risks of slavery and labour abuses. There are
many more such examples at local as well as
global levels which have direct or indirect
relation with sustainability and transparency
aspects of the fashion industry. From decades,
industry experts strongly believe that there is
no sustainability without transparency. Amidst
all this discussion, where does India
stand...What is the opinion and experience of the
Indian apparel industry on transparency? Apparel
Resources explored this issue with various
stakeholders from the industry. As expected,
there is a difference of opinion on this topic,
but all of them agree that transparency is the
best policy for sustainable business and for a
better tomorrow. Transparency in Indian apparel
industry As per experts, though Indian industry
is a cut above China, Bangladesh and Vietnam,
overall Indian apparel industry (the majority of
giants as well as SMEs) is not in a strong
position. Most of the larger players in the
industry and also the medium and smaller ones
involved in exports have moved towards adopting
transparent practices as it has become the need
of the hour but the industry as a whole is yet to
cover lots of ground in this regard. Transparency
is a powerful tool for focusing on labour abuses
and factory-related dangers, and advocates
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critical information about where to turn to for
problems. This makes workers believe that brands
profiting from their labour will hear about their
struggles and intervene. It is better than what
it used to be but the industry has a long way to
go on one hand, we have examples of Toyota, Fast
Cap and Suzuki which have dedicated certain days
of the month for people to go and see their
practices, and on the other hand, many doors of
our industry are so tightly closed that even for
their own benefit, they are not willing to open,
bemoans Sunaina Khanna, Director, Methods Apparel
Consultancy, Gurgaon. The company supports
apparel manufacturers with its integrated
software packages and industry-specific training.
In some cases, there are some grey areas which
need to be taken up on priority. Gurminder
Matharu, Country Manager, Colveta India, Gurgaon
feels that the only hidden part sometimes is the
longer working hours or no holiday in a week and
that too when buying houses stress them to work
overnight to get their merchandise out as
supplier is running late also hidden many times
is the true cost paid to the labour involved. To
a large extent, manufacturers of the domestic
market are yet unaware of the concept of
transparency, as they are by and large in the
transition phase of getting into the organised
sector from an unorganised one and this
shaping-up process may take another 2-3 years or
more. Meanwhile, more companies are moving
towards transparency mode. Buyers efforts, from
a suppliers viewpoint International brands and
retailers have adopted a practical, optimistic
and solution-driven approach towards
transparency. To a large extent, their vendors
feel comfortable discussing issues with them,
instead of hiding it as some of the apparel
manufacturers are of the view that this has
really helped them in improving the system and
work culture. Buyers do expect statistics that
they can use to compare companies. As a
manufacturer/supplier/marketer, if you can
provide an explanation of your statistics, you
justify your company and become memorable, says
Rajiv Dewan, President, Garment Exporters
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Association of Rajasthan (GEAR), Jaipur and MD,
Maam Arts, a well-known export house. Many other
exporters strongly appreciate that buyers across
the continents are pushing factories to be
transparent and are true business partners in
their growth story. With respect to the domestic
market and looking from a holistic view rather
than just sustainability aspect, Vivek Lakra,
Director, Superfine Knitters (Ludhiana) feels
that as buyers are getting big, they are becoming
dominating and are asking suppliers to furnish
details that are no more in closed doors like
those relating to purchase, open costing,
transaction details of four stage back-end
suppliers. Superfine Knitters is the only company
in the Indian apparel industry (producing for
Indian brand and retailers) with state-of-the-art
infrastructure, doing business of around Rs. 100
crore. Being transparent loss or gain Even
medium-level apparel manufacturers which dont
even have a dedicated Product Development (PD)
department are fearful of getting their design
copied. In such a mindset/scenario, is being
fully transparent easy? Interestingly, apart from
satisfying buyers and ensuring law of the land,
transparency is also a way of engaging employees.
If transparent, management trusts staff and
workers with information, and in turn, they
reward the company with loyalty. Overall,
organisational transparency creates trust among
stakeholders, assists in informed decision-making
and fosters greater participation. We have
gained credibility, long-lasting relationship,
better compliance ratings by being transparent.
Being transparent is more than a good policy,
says Archana Tomar Mann, VP-Compliance, CSR,
Training Development, Orient Craft (OC),
Gurgaon. OC is one of the largest export houses
of India. Adding different views to the same and
including important factors like pricing, Vivek
Saxena, Director, Moissanite Apparels, Noida
says, We have gained, especially when it comes
to ethical pricing, and buyers in return trust
and respect us for that. But, at times, we have
lost a lot when it comes down to being
transparent in adherence to social practices. It
is because most of the auditors are concerned only
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about the paper values instead of looking at
things with practical values. We are in an
industry where the turnover of labour is
extremely high and unfortunately 90 per cent of
them come from an almost zero educational
background. Moissanite Apparels is a growing
export house working with several global brands
and retailers. There are companies like Superfine
Knitters which claim to be transparent right from
the beginning. Before GST and demonetisation, the
company was losing a lot to the unorganised
sector, but now, everybody has come to be on a
transparent platform, so now it has got an
edge. With regard to the buying community, not
only brands and retailers, but also the buying
houses strongly claim that they always gain by
being transparent. According to Triburg, openness
is always appreciated and gets due response,
while what Colveta India has gained the most from
transparency is the trust of the suppliers and
customers. For buying houses as well as
suppliers, one of the main reasons for losing
business due to transparency is the
counter-partner not being transparent. Collective
and collaborative efforts on ground level Indian
apparel industry is vast and spread over more
than 15 cities and each city has separate
specialisation and big to small players... All
this makes collective and collaborative efforts
difficult, especially on the ground level. But
being more vocal and open on such things,
manufacturers can also learn and join hands to
promote such initiatives. CXOs of various
companies have shared on various platforms as
well as with Apparel Resource about how there is
a lot of talk about good practices, but in
reality, nothing is happening, especially as far
as customer relationship is concerned. Though on
many fronts like interaction with the Government
and policy-making bodies, the industrys
collective and collaborative efforts are much
more effective and evident.
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Rajiv has a strong point to make here. He states,
There is indeed a need for Collective
Governance. Currently, the world characterised
by globalisation stakeholders increasingly find
themselves unable to govern. Corruption is
everywhere, natural resources are being
exploited, the environment is damaged, markets
are distorted, etc. Certain challenges cannot be
addressed by entrepreneurs alone. Increasingly,
collective governance beyond governments is
seen as a part of the solution, with state and
non-state actors working together. The trick is
to communicate in ways all understand and allow
incremental growth and refinement. This aspect
becomes important as transparency about sharing
information not only with own brands, partners
but with all. There are very few companies who
are on the collaborative mode, else the majority
is always on the secretive mode and very
reluctant to be transparent. And this needs to
change for sure. Industry challenges are common
like low efficiencies, high absenteeism, poor
labour turnover, poor middle management and
inadequate HR practices. The collaborative
approach will help tremendously and make India
more competitive in the world forum. As far as
buying side is concerned, there are very few
examples in this regard. Triburg has moved way
above and beyond the concept of a typical buying
house. We believe we are a full-service
provider, akin to a 'direct supplier'. We take
complete responsibility for business
deliverance, says Tarun Bakshi, CEO, Triburg,
adding, Industry has been very vocal about a
host of issues in the past as well, but personal
agendas override collective goodwill. It doesn't
mean we stop trying, but this point needs further
deliberation. According to Gurminder, The
ultimate goal for both our suppliers and also us
is to have a successful business with a satisfied
customer base. Therefore collective and
collaborative efforts is the only way to survive
in the market or any business and that too for
the long term for short term, one can always cut
corners and do it their own way. Disclosing
buyers as well as suppliers names
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No doubt that having buyers as well as suppliers
names and addresses on own site and other
manufacturing sites is a vital part of
transparency. Besides, traceability and adherence
to international norms for human rights
throughout the supply chain have become a very
critical factor in maintaining transparency.
Experts feel that as the digital revolution has
already taken place in India, companies are
sweeping vast quantities of data about customers
activities, both online and offline. In the
future, customer data will be a growing source of
competitive advantage gaining consumers
confidence will be the key. Companies that are
transparent about the information they gather,
give customers control of their personal data,
and offer fair value in return of which they win
trust and will earn ongoing and expanded access.
Those concealing how they use customers personal
data, fail to provide value to the customers and
lose their goodwill and eventually
business. Triburg shared with Apparel Resources
in this context that they dont see a need for
such type of disclosures. Even Gurminder is of
the view that such transparency is not taken in a
positive light as no one wants to share their
customers' names to the whole trade. On same
pitch or not It is very important that buyers and
suppliers should be on the same pitch regarding
transparency. There is a strong perception that
buyers are on the higher side as they demand the
transparency from the suppliers. But in the case
of suppliers, they support this concept if they
are doing volume business but dont show adequate
interest if they are handling small business. The
pitch for the supplier is business-driven. Tarun
feels that Indian suppliers are quite
cooperative. Both buyers and the suppliers
understand the ground realities, but still, there
is lot more to be done on the same pitch. Again,
according to Gurminder, it all depends on the
suppliers eagerness. She further adds in order
to motivate Indian suppliers for transparency,
her team does CSR visits, conducts remediation
meetings and discussions with suppliers but
ultimately business is what drives the suppliers
to make efforts. Jas
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Mahindru, Proprietor, Mega-Brands shares that in
80 per cent of the cases, both are on the same
pitch, especially where there is
interdependency. Steps to increase
transparency With the changing scenario, India
has the opportunity to grow now as China is
getting expensive. Being transparent is one trait
which India can follow to grab opportunity for
growth in textiles. Seminars, open forums,
workshops should be conducted on a timely basis
to ensure an increase in transparency. Aggressive
market forces will pressure companies to be more
transparent. Multi-stakeholder initiatives, such
as brands and international NGOs, can play a more
important role in moving the industry toward
basic transparency. The Governments should also
enforce transparency and other mandatory human
rights processes in an apparel companys supply
chain and set standards that truly level the
playing field for businesses and workers.
Tragically, the combination of reluctance to
regulate companies and overall government apathy
has meant that there have been no strong
legislative efforts worldwide to address human
rights concerns in the garment industry, adds
Rajiv. Tarun sees this from a broader perspective
and asserts, We need to increase our lobbying on
this front with EU and US counterparts. It's our
strength, but we haven't leveraged it well
enough. Gurminder suggests that there can be a
centre where all information is provided and
which helps the suppliers to go hand-in-hand to
reach the required goal. There are many
manufacturers and buying houses who think they
are not doing something extra for transparency as
it comes naturally to them. Transparency comes
with individuals attitude to conduct
business...it is more to do with ones
personality, says Jas. In view of Vivek Saxena,
it will be a mandatory process very soon and
everyone will have to join hands in this
endeavour. Corrective action plan should be
abolished and continuous improvement plan should
be in place, he adds. V.K. Jha, Founder, Aider
NGO, Delhi feels that there is a need to conduct
a multiple awareness programme for the
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manufacturers, brands and stakeholders to
understand transparency in the systems and their
impact on business. The industry has been
gearing itself up for these challenges. Further,
the industry shall be required to have an
effective compliance function capability to meet
its legal and regulatory obligations and promote
and sustain a healthy transparent culture of
compliance and integrity. Suppliers should step
out of their comfort zone and join the
transparency trend group. They should commit to
sustainable transparency standards.
Multi-stakeholders initiatives should also
endorse transparency, he corroborates. Beyond
transparency! Apart from sustainable activities,
disclosing of business strategy, order booking
situation, efficiency rate, overall turnover
should be a part of transparency or not? Rajiv is
of the opinion that organisations practising full
transparency are open to attack and are
vulnerable to those groups that feel
under-represented or alienated. He accepts that
it can be difficult to learn to balance
transparency keeping some information private,
such as competitive trade secrets or other unique
information. These practices must be transparent
but many times business strategies are the USP of
the organisations hence in some scenarios, if
everything is too transparent, people can take
undue advantage of the available information in
the short term. I feel if we find ways to
collaborate rather than compete, it can create a
win-win situation often, says Sunaina. Gurminder
too agrees on the same and avers, Absolutely,
this should be part of transparency for buying
house as well, as when we do this, our supplier
base also understands our structure of work, the
cost involved and value that we add in between
them and customer-hidden agenda is anyway not
good for either party. On the contrary, Tarun
disagrees with this as he states, We are in a
commercial world and putting commercial
information in public domain is not in anybody's
interest. Jas gives a mixed opinion, We do
discuss strategies with our associates and are
quite open to a very large extent, but within the
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practical understanding of each side. Percentage
(commission) and profits are personal and I
believe one should not discuss this until and
unless there is a situation where negotiations or
expenses need to be understood by others. Yes, it
is evident there is no business without this
commission or service charge. Starting
point Apparel manufacturers who have not yet
moved towards transparency, can start by
exploring Transparency Pledge. As per Human
Rights WatchWorld Report 2018 in 2016, Human
Rights Watch joined eight international labour
rights groups and global unions advocating for a
basic level of transparency in the garment
industry. The coalition developed a Transparency
Pledge, a uniform minimum standard for
transparency, drawn from industry good practices.
The pledge is a modest starting point for company
disclosure. Companies can do far more than what
the pledge seeks. As usual, industry stakeholders
have different opinions, observations or
experiences on similar issues and things will
keep moving in their organisations as per them,
but as a whole, no one can deny that transparency
is the best policy in order to move further for
sustainable business and for better tomorrow.
Leonardo A Bonanni, Founder CEO of Sourcemap
strongly believes that committing to supply chain
transparency is usually the most effective way to
drive the new business processes needed for
mapping and traceability.
Blurbs Transparency is an open way of working
which promotes collaboration between all
stakeholders. Triburg has always shared relevant
information with all stakeholders. We run one of
the most transparent supply chains with a few key
European accounts. It's taken years of work on
the ground to get to where we are, Tarun Bakshi,
CEO, Triburg Transparency is the overall view of
our product with regard to where it is produced,
printed, processed, taking care of the labour
involved
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on the human ground level and open sharing of the
movement of our product at all stages. Our
organisation has always been transparent and our
supplier base is a strong vote for this,
Gurminder Matharu, Country Manager, Colveta
India, Gurgaon Transparency embodies honesty and
open communication because to be transparent,
someone must be willing to share information when
it is uncomfortable to do so. As a concept, it is
often most visible in the realm of social
responsibility and compliance its real benefit
is when its seen as a business priority, Rajiv
Dewan, President, Garment Exporters Association
of Rajasthan (GEAR) Transparency is honestly
fulfilling social compliance requirements and
ethical business practices, which includes
pricing policies also. We are committed to be
transparent in our business and impart the same
values to our staff too, Vivek Saxena, CEO,
Triburg Transparency means that all business
transactions are accounted for, and all
Government statutory departments are well linked
with the company, and there is a minimal scope of
any deviation or tax/entry evasion. We are a
public limited company and we are extremely
transparent in all respects, Vivek Lakra,
Director, Superfine Knitters Transparency
implies openness and accountability, accompanied
by the availability of full information required
for any collaboration or decision making. It
helps to build credibility with not only
customers but also every stakeholder be it
employees or society. We are fully transparent
with our buyers and ensure that we share
sustainability reports, internal audit reports,
annual compliance progress status with our buyers
on a timely basis, Archana Tomar Mann,
VP-Compliance, CSR, Training Development,
Orient Craft Being transparent is equivalent to
being trustworthy transparency implies openness,
communication and accountability. Right from the
beginning, our organisation has been genuinely
transparent about the business practices that we
follow. In our organisation even the last link of
the value chain has solid trust in the company
and its practices, Sunaina Khanna, Director,
Methods Apparel Consultancy
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Box Comprehensive transparency Transparency
should be a two-way street. If brands expect
suppliers to be more open and accountable to
elucidate their supply chain, so should the
brands be especially in terms of their commitment
levels to support such an environment, Tarun
Bakshi, CEO, Triburg Suppliers have to be
transparent with their clients, but they should
similarly be transparent with their workers and
staff. With regard to the workforce, there are
many such issues where manufacturers have to be
more transparent. Things should not only be in
papers, but they also should be executed on the
ground level and reflect clearly. The factory
management should distribute an Employee
Handbook in local languages to all workers,
which should contain all relevant HR information,
policies, workplace rules, wages and benefits in
detail. Why cant apparel manufacturers have
their workers records? VK Jha, Founder, Aider
NGO Transparency and allied collective efforts
are a state of mind and flow from top to bottom.
If the leaders of the industry will take this
forward, soon all will follow. Those who will not
will be left out of the industry, Vivek Saxena,
Director, Moissanite Apparels Apparel Resources
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