Our Approach to Protecting the Rights of Foreign Contract Workers in Tier 2 Mills

Gap Inc. has long focused on protecting the rights of foreign contract workers in our supply chain. These people, who leave their home countries to seek work abroad, are oftentimes more vulnerable than local workers, sometimes forced to pay fees for employment, subject to the withholding of their passport and travel documents, and more likely to endure exploitative working conditions with no avenues for recourse. 

We maintain that facilities that recruit or employ foreign contract workers shall ensure that these workers are treated fairly and on an equal basis with local workers. We first implemented contract labor requirements for our Tier 1 cut-and-sew suppliers in early 2001, and our robust program and standards are a core component of our Code of Vendor Conduct. More information on the standards and provisions we enforce related to foreign contract workers can be found here and our approach is consistent with Impactt’s Standards for Repayment of Migrant Worker Recruitment Fees and Related Costs, available here.

Our efforts to map Tier 2 suppliers - the mills that provide our fabric - gave us a chance to further assess our risks, with the goal of expanding our policies to protect foreign contract workers deeper in our supply chain. 

Identifying the Risk

In 2019, we endeavored to understand where we should focus our efforts, surveying Tier 2 suppliers in South Korea, Taiwan, and Turkey on how many foreign contract workers they employed. 

While this revealed that South Korea and Taiwan had a higher proportion of foreign contract workers (Turkey had none), the country contexts differed. Whereas 10 of 14 mills in South Korea reported employing a total of 100 foreign contract workers, 22 of the 23 mills we surveyed in Taiwan employed more than 1,700 foreign contract workers. In addition, Taiwan’s regulation and enforcement of these workers’ rights were not consistently applied. Certain sectors in Taiwan struggle with a labor shortage, and while the law stipulates that facilities can hire a 1:3 ratio of foreign contract workers to local workers, that policy is not always strongly enforced.

Peer Benchmarking and Industry Collaboration

Our next step was to understand our peers’ approach and define opportunities for collaboration, to increase pressure on suppliers for compliance and also to ensure that buyers are taking a uniform approach. 

Because this issue is more pervasive in the electronics industry, we referenced guidance for foreign contract labors developed by Responsible Business Alliance (RBA), a multi stakeholder supply chain initiative. RBA has developed guidance around the use of foreign contractors; however, it does not define specific enforcement processes. 

We also spoke with apparel industry peers with facilities in Taiwan, and we began to have conversations with workers themselves through onsite interviews.

Our Approach: Industry Commitments and Gap Inc. Policy

This groundwork guided our decision to proceed with a two-part approach: Building on existing industry commitments, including the American Apparel and Footwear Association and Fair Labor Association Commitment to Responsible Recruitment, we are extending our foreign contract worker requirements to all our Tier 2 suppliers in Taiwan. We require that workers are not charged recruitment fees, that they maintain full control over their passports and travel documents, that they are given freedom of movement, and they retain full control over the money they earn.

In July 2019, with the support of our internal fabric sourcing teams, we communicated these requirements and mill vendors in Taiwan.  We also provided training on these requirements to the mill vendors. We required that all vendors comply with these guidelines by the end of 2020.  We also worked with other brands such as Adidas, Lululemon, and Patagonia to avoid conflicting expectations for our shared suppliers. In 2020, we contacted mills to follow up and guide their implementation progress.

We are hopeful that future audits and physical checks will provide evidence of real improvements for workers. Already, some of the facilities that we inspected in 2019 have implemented recommendations to improvements to upgrade housing for foreign contract workers. Once we complete the audits, we will develop action plans for mills to rectify any remaining issues we find.

Lessons Learned

We have learned a number of lessons through our work on this issue in our Tier 2 supply chain in Taiwan. 

The first lesson involves understanding where we have leverage: Our requirement that facilities eliminate recruitment fees charged to workers came as a surprise to many facilities because it’s more stringent than the government requirement. To increase our leverage, we first focused on aligning internally, engaging our mill management team and our sourcing teams. We also collaborated with other brands that share suppliers with Gap Inc. 

Another challenge we have faced is the size of the facilities: Some of the mills we work with in Taiwan are small businesses that employ less than 30 people. These facilities use informal practices, such as subcontracting to other facilities, giving us less visibility into and control over risks. We have been able to address risks in Tier 1 because we have a direct, contractual relationship with these facilities. Addressing risks in Tier 2 is more complicated because our relationship with them is indirect, with our apparel suppliers placing orders, not Gap Inc.

Looking ahead, we will continue to better understand the issues and engage with our fabric sourcing teams to ensure our new policy takes hold and creates positive change for the people working in our Tier 2 supply chain. We will also continue to collaborate with our peers in the apparel industry and beyond to protect the human rights of foreign contract workers in Taiwan.