Business

Registration Of Initiative `Good Clothes, Fair Pay’ in Garments And Footwear Sector

The European Commission has registered a European Citizens’ Initiative (ECI) entitled `Good Clothes, Fair Pay’. Through this ECI, organisers of the initiative are demanding that the Commission propose due diligence legislation requiring companies in the garment, textile, leather, and footwear sectors to ensure workers are paid fair living wages. The `Good Clothes, Fair Pay’ initiative could lead to the adoption of legislation by the Commission. Since 2012, ECIs have served as a tool for EU citizens to urge the Commission to propose new legislation based on initiatives that must reach one million signatures from at least seven Member States. Before collecting the signatures, the Commission may register the initiative. The Commission only registers initiatives that meet, among others, the following criteria: (i) the initiative concerns a matter falling under EU competence, (ii) the initiative is not abusive, frivolous, or offensive, and (iii) the initiative is in line with EU values and rights in the EU’s Charter of Fundamental Rights. The Commission has deemed that the ECI on `Good Clothes, Fair Pay’ has fulfilled these criteria and has thus registered it to open it up for the collection of signatures. The organisers of this initiative have six months to initiate the signature campaign and one year from the kick‑off of the signature campaign to gather the required one million signatures. According to the official website of the `Good Clothes, Fair Pay’ initiative, the signature campaign will be launched in the summer of 2022. In consequence, the one million signatures will need to be collected before the summer of 2023. `Good Clothes, Fair Pay’ initiative was launched as a result of the long‑standing conditions of poverty among workers in companies’ supply chains in the garment, textile, leather and footwear sectors. It is stated that these conditions have deepened as a consequence of harmful commercial practices and the Covid‑19 crisis. Moreover, it adds that the gap between what workers earn and what they should be earning has grown despite the numerous voluntary initiatives on fair living wages. The “Good Clothes, Fair Pay” initiative aims to: (i) complement and build on the EU’s Sustainable Corporate Governance framework and the EU Adequate Minimum Wage Directive; (ii) identify, prevent and mitigate adverse impacts on human rights to a living wage, freedom of association and collective bargaining rights; (iii) reduce poverty in the EU and worldwide and combat child labour; (iv) prohibit unfair trading practices in the garment and footwear sectors and promote fair purchasing practices; (v) provide a right to information for consumers; and (vi) improve transparency and accountability of undertakings in the garment and footwear sector. The organisers of the `Good Clothes, Fair Pay’ initiative presented a draft legal act to the Commission entitled `Proposal for a Directive on Living Wages in the Garment, Textile, Leather and Footwear Sector’ (“Directive Proposal”). The Directive Proposal lays down rules on obligations and liabilities for undertakings placing garments and other textile products, leather and footwear products on the internal market. The rules would also affect foreign companies exporting these goods to the EU. The text provides, among other things, that: (i) undertakings must carry out effective due diligence with respect to living wages, including identifying and assessing the risks of actual and potential adverse impacts and the risk of workers being paid less than a living wage; (ii) undertakings must track and communicate the progress of the mitigating measures taken within the due diligence process; (iii) the Commission must adopt implementing acts laying down benchmarks which may be taken into account for the determination of living wages; (iv) undertakings should encourage collective bargaining agreements at supplier level to increase wages; (v) unfair trade practices must be prohibited, and (vi) there must be improvements in the transparency of undertakings. It remains to be seen whether the initiative will reach the one million votes required within the requisite timeframe from the launching of the signature campaign. If so, it also remains to be seen whether and how the Commission would then take action that would impact foreign companies the world over.