forreferencegarment-prm-report.pdf

Travelling textiles
A sustainability roadmap of
natural fibre garments

May 2009

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This report has been prepared by Emer Diviney and Serena Lillywhite at the Brotherhood

of Laurence Sustainable Business Unit.

Brotherhood of St Laurence

67 Brunswick Street

Fitzroy Vic. 3065

ABN 24 603 467 024

Ph: (03) 9483 1183

www.bsl.org.au

the HUB of responsible business practice in Australia is a project of St James Ethics Centre 3
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Contents
Acknowledgments 5

Summary 6
Introduction 6
Key findings 7
The way forward 11
Recommendations 12

Introduction 14
Brotherhood of St Laurence 14
Gorman Industries 15
Understanding the clothing industry 15
Corporate responsibility and “sustainability” 17
Developing tools for responsible business practice 18

Roadmap methodology 19
How we went about it 19
Who we spoke to 20

Overview of the garment supply chain 22
The clothing industry roadmap 22
Key sustainability issues in the garment sector 23

Case study: Gorman 28
Who is Gorman? 28
The Gorman roadmap: Merino Tee and Forest Dress 29

Unpicking the garment roadmap 32
Design and production management 32
Wool and cotton cultivation 34
Processing raw materials and yarn manufacturing 39
Knitting and weaving 43
Fabric processing 45
Cut make and trim 48
Retailing and wholesaling 51
Consumer use 55
Textile waste and disposal 56
Freight 58

Towards sustainable garments 60
Garment industry drivers 60
Sources of information 61

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Tools and resources 62
Role of government 62

Conclusions 65
Recommendations 67

Glossary of selected certification standards 68

References 71

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Acknowledgments
The authors would like to thank those who have contributed to the research and

production of this report. First and foremost, we are grateful to Gorman for agreeing to

participate in the project and open up their supply chain for mapping purposes. This

required considerable trust on their part and further demonstrated their commitment to

responsible business practice

Secondly, we thank the people we consulted:

those at different stages of the supply chain (Lisa Gorman and Elita Pyburne at

Gorman; Paul Norriss of Un-available; Minh Le; staff at Levatex; Russell Woodley at

Levana; Tosh Szatow at Tosh Enterprises; Phoebe Croyle and Felicity Mc Donald at The

Merino Company) and others in the garment sector and related bodies (Jo Kellock,

TFIA; Kerryn Caulfield, TTNA; Michelle Hayward, VECCI; Tommy Clarke, NoSweatShop

Label; Cameron Neil, Fairtrade Association Australia and New Zealand; Diana Klein and

Sue Thomas, RMIT Fashion; Tim Connor , Oxfam Australia; Elizabeth Macpherson, TCFUA

(Vic).

Finally we acknowledge our project collaborators: Green Capital (Irmine van der Geest

and Danielle Domone), NetBalance (Alan Dayeh, Nadine Botzenhart and Ro

Coroneos), St James Ethics Centre (Rosemary Sainty and Suzanne Granger) and project

consultant, Peter Davies from the UK Sustainable Development Commission. We would

also like to acknowledge the editorial expertise of Deborah Patterson (Brotherhood of

St Laurence) and design assistance from Miriam Steenhauer.

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Summary
Introduction
Corporate responsibility and good governance are increasingly recognised as

fundamental to business. They are systems which require the development of policy

and practice to address the social and environmental implications of day-to-day

operations. While many large enterprises have made significant progress, for small and

medium enterprises (SMEs), challenges remain.

The Australian Government (Treasury) has funded St James Ethics Centre to promote

responsible business practice (RBP) in Australia. The Brotherhood of St Laurence (BSL) is

one of a number of organisations involved in the project. In collaboration with Green

Capital and NetBalance, a product road mapping component has been undertaken.

A product roadmap is a tool to better understand the environmental and social

impacts of a particular product throughout the supply chain, and to assess ways in

which these impacts can be mitigated. The BSL’s focus was to develop a roadmap of

the garment sector. This report and case study is the roadmap of two natural–fibre

garments. It reveals how SMEs in the Australian textile and clothing sector could be

assisted to improve their sustainability practice.

One of Australia’s well-established fashion labels, Gorman, agreed to open their supply

chain for mapping purposes. Gorman is a retailer and wholesaler with eight retail

outlets in Sydney and Melbourne and thirty-two wholesale clients, including David

Jones. Two products were chosen, the Merino Tee and the Forest Dress, which are

sourced and manufactured in Australia, Vietnam, China, Japan, and New Zealand.

Both products are made from natural (as opposed to synthetic) fibres, reflecting the

Gorman range, which mainly uses renewable textiles. The company has a reputation

for being sustainable, and has implemented a number of initiatives, including the

design and production of an organic range. The Gorman Ship Shop, a mobile store,

designed to be eco-friendly in design and function, is an interesting retail response.

They have publicly expressed concern for working conditions.

Methodology

Twelve in-depth interviews were conducted with key representatives of companies in

the Gorman supply chain (including Gorman itself), as well as relevant industry

associations, and garment sustainability experts. Additional consultation with non

government organisations and accreditation authorities was undertaken. Interviews

were not conducted with suppliers in China and Japan responsible for the processing

of raw materials and yarn manufacturing. Most notable was the unwillingness of the

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Melbourne based manufacturer (Merino Tee) and the textile agent (Forest dress) to be

interviewed, despite the best efforts of Gorman.

Key findings
In order to embed responsible business practice in garment production, it is essential to

understand and disclose all stages of the chain, including fibre cultivation, textile and

clothing production, retailing, consumer use, and end of life, and to assess the social,

environmental, and economic impacts at each stage.

Although the supply chain is complex, there are SMEs already committed to sustainable

and responsible business practice. Gorman is one such company. Gorman is doing

more than most fashion labels and should be acknowledged for their initiatives. There

does however appear to be a disconnect between the broader “sustainability

aspirations” of Gorman and their mainstream business practices.

To date, Gorman has focused on the environmental impact of their business,

particularly through their fabric choices and their energy use in retail. Gorman is yet to

address the social dimensions, especially working conditions, in the cut, make, and trim

stage of production in both Australia and Vietnam. It could be argued that the Gorman

response has been strong on statement of commitment and soft on a systemic

approach to fully understand their supply chain, particularly its labour dimensions. That

said, Gorman has expressed an interest in attaining accreditation with the Home

workers Code of Practice for their Australian based manufacturing, and have

encouraged their Vietnamese manufacturer to become SA8000 accredited.

Collaboration with suppliers can contribute to innovative, sustainable garments. This

was clearly demonstrated through the partnership between Gorman and their Vietnam

supplier, Un-available, who influenced and inspired Gorman to develop their organic

range. In addition, Gorman has benefited from the direct relationship with The Merino

Company (TMC), vertically integrated business, with significant influence due to their

position as a global wool solutions company. This led to the development of the

organic Merino Tee.

Garment industry drivers

In the garment sector, the greatest driver for SMEs is business survival in a highly

competitive industry. Keeping a viable, innovative garment industry in Australia is a key

priority. Market access, developing competitive advantage, and responding to

consumer demand for ethical fashion are strong drivers of business practice. However,

the higher cost of sustainable production, consumer’s reticence to pay more for

sustainable goods, and “fast fashion” expectations remain the greatest barriers to long-

term sustainability.

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For Gorman, the environmental impact of production appears to be a stronger

sustainability driver than consideration of labour rights and human rights. This may well

be because it is easier to measure, and the climate change message has gained

momentum. However, ensuring fair and decent working conditions and investing in

human capital can significantly improve productivity, quality, efficiency, and market

access.

Current and future sustainability challenges

For the garment industry to achieve more responsible business practices, the key

sustainability challenges include:

1. Costs of sustainable production – Current limited production volumes for SMEs
do not support affordable sustainable fashion.

2. Managing relationships – Increased outsourcing, subcontracting and use of
intermediaries make it harder to uphold responsible business practices

throughout the supply chain.

3. Consumer and fashion trends – The increasing number of fashion items (on-trend
and low-cost) that are purchased and soon discarded adds to the industry’s

environmental impact.

4. Working conditions – Poor working conditions exist throughout the supply chain,
in fibre cultivation, outwork in Australia and overseas, and factories in low-wage

countries. Workers’ health and livelihoods may be at risk.

5. Energy and water consumption – The production of raw materials, yarn, textiles,
and garments are water and energy intensive.

6. Chemical and pesticide use – Intensive use of chemicals in the growing of
cotton and wool and the production and processing of yarn and textiles

impacts on the health of workers and consumers.

7. Environmental degradation – The environment may be damaged by land
clearing, over-grazing, and poor farming practices in fibre cultivation; and

contaminated by pest and disease controls used in farming and by untreated

effluents and air pollution from the textile production processes.

8. Animal welfare – Animals may be subject to inhumane treatment in farming
practices such as mulesing.

9. Washing and care – Care of garments requires considerable energy and water,
and may release washing detergent phosphates into local waterways, or may

involve toxic chemicals such as those used in dry-cleaning.

10. End of life management and textile waste –Clothing and textile waste (including
packaging) may end up in landfill or be dumped in developing economies.

11. Greenhouse gases – Methane and other gases are emitted by animal
flatulence, production and agricultural processes, transport, and textile

decomposition in landfill.

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12. Regulatory frameworks, standards and industry certification – Regulations and
voluntary initiatives are often poorly monitored, but will become increasingly

important to accessing markets and demonstrating responsible production to

discerning consumers.

The solutions are complex, and made more so by the lack of a definitive “sustainable”

textile. It is not as straightforward as “natural fibres are better than synthetic”. When

using natural fibres, the energy, water, and chemical use in cultivation, production and

consumer use, washing and care needs to be considered, as do issues such as

environmental damage, and workers’ exposure to hazardous chemicals, dust and

fumes.

The roadmap revealed there is no quick fix to produce the ultimate sustainable

garment. The global trend for “fast fashion” and the reticence of mainstream

consumers to pay a premium price for “ethical fashion” limit responsible business

practice in a highly competitive sector. Consideration of water, energy, chemical and

pesticide use is critical, as is the impact of certain processes on environmental and

human health.

The sustainable garment of the future would be designed carefully

and made from renewable material. It would be pesticide free and

produced by workers in decent working conditions. It would be

washed at low temperatures and have fashion upgrades to extend its

fashionable life. Finally it would be recycled, reused or composted.

(Draper et al 2007, p.2).

Further, it is rare to find a garment that can be traced to being made in one country.

The Gorman roadmap confirmed incomplete knowledge of their supply chain. While

some aspects were well understood, others such as a mechanism to ensure fair and

decent wages and hours of work were vague and based on trust. Also, they did not

have the tools to ask robust sustainability questions, both social and environmental, of

their suppliers and make informed decisions. There is also a reluctance to exert pressure

on suppliers. Both Gorman and their Vietnam manufacturer confirmed that small

production runs meant they had little influence and they did not want to risk losing

suppliers.

The effective monitoring of national laws, voluntary mechanisms, and certification

standards remains a critical challenge. Without improvement, sustainability claims

through labelling will continue to be met with both confusion and scepticism by fashion

label owners, retailers, consumers, and watch dog organisations.

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The Gorman roadmap clearly demonstrated that innovative, sustainable solutions are

best achieved when incorporated at the earliest design concept stage, and in direct

collaboration with suppliers. It also confirmed that energy efficiency and waste

management gains can be made through careful use of lighting and heating in stores,

and through initiatives designed to promote more sustainable practices among

customers and staff. The use of organic wool made the Merino Tee more easily

traceable and a better environmental choice; and the use of renewable textiles

improved the sustainability performance of the garments at some stages of the

roadmap.

Information, tools and resources

It became clear that the industry gathers information from diverse sources. Industry

magazines and the internet were cited as most useful to keep abreast of global industry

developments, while, networking with industry peers to monitor trends is common.

Suppliers and intermediaries were recognised as having considerable knowledge,

experience and expertise, particularly regarding product and production advances,

and to develop more innovative and efficient business practices. There is also a

growing reliance on business and environmental consultants and auditors, although the

cost is often prohibitive for many SMEs. Non-governmental organisations (NGOs) were

recognised for their knowledge and in-depth understanding of the sustainability issues.

The roadmap highlighted the need for simple and easy to read resources and tools with

a practical focus. Some respondents wanted only basic information on how to make

their businesses more sustainable. Others, with some systems in place, sought more

sophisticated tools that would, for example, enable self-assessment of their business

practices to identify and mitigate potential risks. Suggestions included:

• product information and technical data on the social and environmental
implications of choosing particular fibres, textiles, and production methods

• information on the various certification and accreditation mechanisms,
including an assessment of their credibility, shortcomings, and cost and process

to attain.

• assistance in navigating the global dimensions of their businesses, and the key
social and environmental risks of operating in particular countries

• assistance in managing supplier relationships and partnerships and critiquing
their capacity

• creation of a garment sustainability portal and the innovative use of various
social networking platforms.

• establishment of e-learning frameworks

The Brotherhood of St Laurence has developed three tools in support of the St James

Ethics Centre project: Strengthening supplier relationships pro forma agreement,

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Supplier information questionnaire and a fact sheet, Responsible business conduct: the

international dimensions for small medium enterprises.

Role of government

Those interviewed expressed the opinion that the Australian Government could do

more to encourage and reward responsible business practice in the garment industry.

Incentives were needed to offset the higher costs of production, and access to grants

could be based on sustainability criteria.

The government could assist by ensuring the regulations for garments imported are

consistent with those manufactured in Australia. For example, legislation to ban the

importation of garments that have been exposed to hazardous chemicals, that are

prohibited in Australian production. The recently introduced European REACH

(Registration, Evaluation, Authorisation and Restriction of Chemical substances)

legislation was given as a best- practice example.

Introducing an “ethically made” labelling system or “sustainable quality mark” was

raised. However, the challenges were also noted given the complexity of garment

supply chains, the vast number of intermediaries involved, and industry and consumer

concerns about the integrity of some schemes.

Energy efficiency gains made through responsible use of lighting and heating in stores

could be promoted through retail retro-fitting subsidies, similar to those available in the

residential housing sector. This would not only improve sustainability but also create

green jobs. An additional job creation scheme to emerge was government assistance

for SMEs engaging environmental consultants, either directly or from an established

government pool of consultants.

These initiatives may be best overseen through the establishment of a national

corporate responsibility agency to strengthen voluntary mechanisms, disseminate

resources, develop sustainable procurement policy and practice, enforce mandatory

sustainable business regulations and reporting, and devise sustainable business subsidies

and incentives.

The way forward
The Gorman case study confirmed that a roadmap is a useful tool for understanding

the social and environmental impact of business decisions and operations throughout

the supply chain. It revealed that Gorman is leading the way in the SME garment sector

in both sustainability commitments and practice. There is however scope for Gorman to

strengthen this work through a more systematic and verifiable approach, particularly

with regards to labour practices in both Australia and overseas. Responsible business

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practice needs to be embedded in the entire business operation, not just the organic

collection and initiatives aimed at reducing energy used in their Australian retail outlets.

Real gains can be made by embedding sustainability principles at the design stage of

production. Further, direct collaboration with suppliers can result in the production of

innovative and more sustainable garments. This was clearly demonstrated through the

partnership between Gorman and their Vietnam supplier, Un-available, which

influenced and inspired Gorman to develop their organic range. In addition, Gorman

has benefited from the direct relationship with The Merino Company (TMC). TMC has a

vertically integrated business model, and significant influence due to their position as a

global wool solutions company. This led to the development of the organic Merino Tee.

A multi-dimensional response is needed to drive responsible business practice. A

combination not only of incentives (e.g. taxation benefits, access to small business and

export development grants and subsidies, market and retail access, preferred supplier

for government procurement) but also of robust and enforceable regulation and

voluntary mechanisms is required, along with the development of practical tools and

resources to assist SMEs.

Recommendations
The Gorman product roadmap identified significant opportunities for the Australian

government to design innovative policy initiatives to strengthen the Australian garment

sector’s capacity to operate in a sustainable and responsible manner. It is

recommended the Australian Government:

1. Establish a national corporate responsibility agency. The agency would have
responsibility for implementing mandatory sustainable business regulations and

reporting, strengthening voluntary mechanisms, developing and disseminating

tools and resources, sustainable procurement policy and practice, and

influencing the development of sustainable business subsidies and incentives.

2. Develop resources, tools and technical assistance on existing and emerging
sustainable fibres, production processes and certification programs. This would

include their potential use in the clothing sector, and an assessment of their

environmental and social sustainability impacts.

3. Facilitate public sector investment in flexibly delivered training packages and
educational resources to build skills and technical capacity to

improve sustainable design and manufacturing in the garment sector.

4. Introduce subsidies and incentives to encourage sustainable business practice.
For example, “tax breaks” for enterprises that develop organic garment

collections, grants to defray the costs of factory audits and attaining

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certification, and subsidies for enterprises interested in retro-fitting existing stores,

and sustainable building options for new stores.

5. Create “green-jobs” through retail retro-fitting initiatives and access to
environmental consultants with expertise in SME manufacturing and retail.

6. Introduce measures like the EU REACH legislation to regulate the use of
chemicals, including in imported clothes.

7. Review programs such as the Textiles, Clothing and Footwear (TCF) Assistance
Packages, Austrade administered Export Market Development Grants (EMDG)

and AusIndustry Enterprise Connect, to ensure funding eligibility criteria is based

on responsible business principles.

8. Implement the 2008 Australian TCF Review recommendation to establish a TCF
Innovation Council ensuring the Council’s terms of reference include social and

environmental sustainability, and Council membership includes individuals and

organisations with experience in this area.

9. Implement the TCF Review recommendation to establish an Ethical Quality Mark
for the Australian garment industry ensuring that the mark encompasses both

Australian and International sourcing, and includes information on country of

origin.

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Introduction
Governments, communities, consumers and international bodies are increasingly

demanding that companies be more accountable for their business operations

offshore. Some respond by doing very little; others are addressing issues such as working

conditions, human rights, and environmental management through responsible

business practices.

The Australian Government (Treasury) has funded St James Ethics Centre over a period

of three years to promote responsible business practice (RBP) in Australia. This work

includes a product road mapping component undertaken by three organisations: the

Brotherhood of St Laurence (BSL), Green Capital and NetBalance. A product roadmap

is a tool to better understand the environmental and social impacts of a particular

product throughout the supply chain, and to assess ways in which these impacts can

be mitigated. The BSL focus was on the garment sector, an industry characterised by

complex global supply chains often including low-wage economies with poor

enforcement of labour and environmental standards. One of Australia’s well-
established fashion labels, Gorman Industries, agreed to open their supply chain for

mapping purposes.

Brotherhood of St Laurence
The Brotherhood of St Laurence (BSL) is a Melbourne-based community organisation

that has been working to reduce poverty in Australia since the 1930s. Our vision is “an

Australia free of poverty”. Our work includes direct service provision to people in need,

the development of social enterprises to address inequality, research to better

understand the causes and effects of poverty in Australia, and the development of

policy solutions at both national and local levels.

The BSL previously operated a small Australian-based garment manufacturing business,

Hunter Gatherer, which is an accredited No Sweat Shop retailer. In addition, the BSL

operates a donated goods business, which sorts, re-sells, and disposes of large

quantities of second-hand clothing.

The authors of this report have extensive research and advocacy experience in the

issues faced by small and medium enterprises in developing corporate responsibility

(specifically in the Australian garment sector), voluntary and mandatory regulatory

frameworks, and standards, and labour rights issues in Australian and Chinese

manufacturing supply chains.

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Gorman Industries
Gorman is an Australian fashion retailer and wholesaler with eight retail outlets in

Sydney and Melbourne and thirty-two wholesale clients, including a major national

department store. The company has an online store, and a mobile pop-up store

constructed from a recycled shipping container which only sells products online. The

company has been operating for ten years.

All manufacturing processes apart from patternmaking and some sample production

are outsourced to suppliers in Australia and overseas in countries such as; Vietnam,

China, Japan and New Zealand.

Gorman has made a public commitment to environmental and social responsibility,

including decent working conditions. They were one of the first fashion retailers in

Australia to develop an organic range of garments. They have undertaken energy and

waste audits of their Australian operations and their Vietnamese manufacturer, and

have developed a Green Guide policy.

Understanding the clothing industry
The clothing and textile industry is a major contributor to the global economy,

encompassing both small and large-scale operations worldwide. It is estimated to be

worth US $1trillion, contribute to 7% of world exports and employ some 26 million people

(Draper et al. 2007, p.3). According to the Council of Textile and Fashion Industries of

Australia (TFIA), clothing and textile sales are worth A$9 billion each year, and the

industry accounts for ten per cent of manufacturing establishments in Australia (TFIA

2006).

Since the 1970s there has been a significant restructuring of the garment industry.

Through the reduction of trade quotas and tariffs and the progressive opening of

markets to imports, a global business model has emerged “based on companies

outsourcing production through global supply chains that demand low-cost and

flexible labour” (Raworth 2004, p.17). Australia has followed these global trends, with a

significant rise in import share of textile clothing and footwear (TCF) products:

Imports as a proportion of …