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EU Lawmakers Push for New Mandatory Law in Garments Sector

On 19 May 2017 the Council of the European Union published its Conclusions on Sustainable Garment Value Chains (GVC). In its conclusions, the Council seeks the prevention of human rights violations and the encouragement of corporate social responsibility actions in order to ensure compliance with labour and environmental international standards in the garment sector. The Council has moreover encouraged the European Commission to temporarily remove trade benefits from those trading partners that violate their labour and human rights commitments.

The Council has further called on the Commission to enhance traceability in the textile sector, stressing in particular the need to track the chemicals used in the manufacturing process of clothes, as well as the exposure of workers to toxic substances.

The conclusions of the Council come after the release of a staff working document approved by the European Commission on 24 April 2017, in which the Commission presented a number of EU initiatives with regard to ”Sustainable garment value chains through EU development action”.

The staff working document tables various initiatives in order to achieve a fairer, safer and greener garment industry. The Commission’s proposal focuses on:

(i) the economic empowerment of women;

(ii) decent work and living wages; and

(iii) transparency and traceability in the value chain.

This third issue is of particular concern, given that the production chain is believed to be highly fragmented and it is believed to be common to subcontract different stages of the manufacturing process to companies established in distant countries.

In order to tackle the abovementioned challenges, the EU has already put in place several cooperation programmes and projects with developing countries such as Bangladesh, Cambodia, India, Lesotho, Madagascar, Myanmar, Pakistan and Vietnam. The EU will devote around €45 million in total to these projects. In its staff working document, the Commission has further committed to promote, within the EU Member States, the development of education and awareness raising programmes in relation to the textile sector.

Moreover, the EU has designed several financing programmes, for instance, "Promoting responsible value chains in the garment sector", which was adopted in December 2016. A number of other financial projects have been created to specifically target key countries in the garment sector.

The EU is also investing in corporate social responsibility projects, providing incentives and guidance for entrepreneurs and SMEs and helping them to develop traceability tools.

Following the approval of the Commission’s staff working document, the European Parliament passed, by a vast majority, on 27 April, a non-binding resolution requesting the Commission to turn the staff working document into an actual legislative proposal. The content of such proposal should include, according to the European Parliament, the promotion of:

(i) labour and human rights in the textile sector;

(ii) sustainability, traceability and transparency of value chains;

(iii) conscious consumption;

(iv) customer information on whether their textile purchases comply with the standards set by the EU;

(v) corporate social responsibility and binding due diligence initiatives; and

(vi) the use of ecological and sustainably managed raw materials.

In line with the Commission’s working document, the European Parliament supports the idea of incentivising and rewarding private sector actors all along the production chain that invest in more sustainable and fairer supply chains.

The above shows the particular relevance that the textile sector has recently achieved amongst European law makers, particularly worried by compliance with human and labour rights, as well as the use of toxic substances in the production of clothes. This concern might give rise to new regulations and restrictions being approved by the EU: a process that Hong Kong and mainland Chinese traders of clothing and textile products will likely be interested in closely following.

Content provided by Picture: HKTDC Research
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