Lululemon’s ‘Conundrum’ Casts Doubt on Forced Labor Disclosure Laws
Canada’s Modern Slavery Act is poised to give the fight against forced labor a shot in the arm, but not everyone is convinced that the upcoming legislation will create meaningful change.
The problem, according to a new study by Governing Forced Labour in Chains, a project by Canada’s McMaster University, is that supply chain reporting laws require only that: the disclosure of information. They don’t actually require companies to spring into action to prevent or mitigate labor abuses. Neither do they hold anyone accountable if violations rear their head.
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To frame the issue, the authors of the study cast a gimlet eye at Vancouver’s own Lululemon and whether its corporate social responsibility initiatives are able to effectively protect workers at risk of forced labor. The yogawear and sneaker purveyor, it said, posed a “conundrum,” adhering to existing disclosure requirements in Australia, California and the United Kingdom on the one hand and obfuscating information that would be useful to researchers, the public and workers on the other.
In 2021, KnowTheChain ranked Lululemon second out of 43 companies for disclosing more information on its forced labor policies and practices than the majority of its peers. It was praised for disclosing the outcomes of risk assessments, strengthening its foreign migrant worker standard, establishing a grievance mechanism that workers made use of, engaging with suppliers on migrant worker rights topics, and providing examples of remedy to workers.
The same year, Sheffield Hallam University’s Helena Kennedy Centre for International Justice listed Lululemon among the brands it deemed at high risk of sourcing cotton from China’s Xinjiang Uyghur Autonomous Region through their use of international intermediaries, though the brand refuted this at the time, saying that it has zero tolerance for forced labor and that it monitors its vendors regularly.
“How can this be the case?” the study said. “It is important to understand that a high score in its benchmark rankings does not mean that a company has ‘slavery-free’ supply chains. KnowtheChain explains that a high score means that a company has publicly disclosed substantial efforts to address the forced labor risks in its supply chain. Indeed, it assumes that leading apparel and food processing firms employ forced labor in their supply chains.”
The report listed some other red flags: Lululemon’s April 2023 supplier list reveals, for instance, that the company sources from suppliers located in Bangladesh, Colombia, the Philippines and Turkey, four out of the 10 worst countries for workers’ rights violations according to the 2021 Global Rights Index created by International Trade Union Confederation. Vietnam, which houses the largest number of Lululemon vendor facilities, was given a score of four out of five—five being the worst—due to systemic violations of workers’ rights.
Despite a sizable presence in Bangladesh—its largest manufacturer with 13,000 workers hails from the country—the brand hasn’t signed the International Accord for Health and Safety in the Textile and Garment Industry.
And while Lululemon’s disclosure of Tier 1 and Tier 2 suppliers and subcontractors goes beyond what many companies do, the list is incomplete, with the absence of information such as the proportion of migrant workers or contract and temporary workers, rendering assessments of aspects of the company’s policies, such as those relating to the use of temporary and contract work, “impossible,” the study said.
Lululemon did not respond to a request for comment.
It doesn’t help that “soft laws” such as corporate codes of conduct for suppliers, social auditing and certification programs, despite their proliferation and expansion, frequently lack teeth, the report said. (Some critics have gone so far as to call them smokescreens.) While Lululemon can legally conduct unannounced assessments, it rarely does this, with only 1 percent of monitoring assessments in 2019 performed without prior arrangement. And vendors, the study said, are usually the ones responsible for ensuring Lululemon’s requirements are being followed.
“CSR initiatives are based on voluntary commitments in which [multinational corporations] design their own codes and have no external monitoring mechanisms or penalties for non-implementation,” the report said.
Case in point: Lululemon, it said, relies on local laws in the sourcing country to determine many worker standards such as freedom of association, collective bargaining and grievance redress. Yet it also sources from countries “notorious” for low labor standards and lax enforcement of labor rights.
Governing Forced Labour in Chains said its study not only raises serious concerns about the effectiveness of CSR initiatives to sufficiently safeguard at-risk workers but it also calls into question the ability of current transparency laws to adequately combat forced labor in supply chains.
“When it comes to assessing the effectiveness of Lululemon’s forced labor policies, a significant challenge of doing so stems from the fact that suppliers (and their subcontractors) are mainly responsible for ensuring key aspects of the policies and codes are upheld,” the report said. “As these systems are not made public, it is difficult to identify the strengths and weaknesses of the policies.”
