However, lawyers are increasingly attentive to the role of contracts in supply chain practices and seek dedicated solutions. Last year, the nonprofit Traidcraft Exchange launched a campaign to expand its Unfair Trading Practices Directive, which released a guide “for greater fairness in agricultural supply chains” in 2019, to the fashion industry and called for a fashion watchdog. The organization also called on the UK government’s environmental audit committee to regulate fashion buying practices, saying companies would never act voluntarily enough, and that “stopping buying practices unfair trade is an essential precursor if the fashion sector is to hope to improve its social situation. and environmental impacts ”.
As part of its responsible purchasing practices initiative, an American Bar Association (ABA) task force released a set of tools in March – a series of “standard contractual clauses” and a code of conduct responsible purchasing, or buyer’s code – that companies can incorporate into contracts with suppliers to improve human rights performance. The project was born from what its organizers call a lack of consistency.
“Companies around the world are saying they care about the treatment of workers in their supply chains, about responsible business conduct, and in fact they are not aligning their legal and operational life with these public commitments.” , says Sarah Dadush, Rutgers Law School. professor and responsible for the procurement project based on the principle of the ABA working group. Contract clauses are meant to be a tool to bridge that gap, she says, and the response from brands they have spoken with to date has been positive. “There is a real receptivity to the idea that contracts can be used to enforce, and that buyers share responsibility for human rights performance. “
The buyer’s code and standard contractual clauses, which are voluntarily adopted and become legally binding once adopted, can also help companies stay ahead of the tighter regulations, she says, such as the law on the duty of care expected in the EU. “Failure to maintain clean supply chains has real financial implications, and contracts can be part of maintaining clean supply chains. “
When advocacy group Remake launches its updated transparency index later this month, it will include additional metrics to assess brand buying practices and buyer’s code adoption. Remake’s director of advocacy and policy, Elizabeth Cline, says the regulatory approach is more necessary than ever, as while the group’s Pay Up campaign has helped vendors secure payments from brands that were withheld at the start of pandemic, things are already going backwards. “We have quickly returned to the race to the bottom where factories feel they have to offer rock-bottom prices and unfair contract terms to stay in the race,” she said.
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