Outlook ’24: Your Legislation Cheat Sheet

Jasmin Malik Chua
·11 min read

What happens when an industry used to the vast latitude of voluntary oversight is held to account? 2024 will bring us closer to finding out as dozens of ethics- and sustainability-linked laws governing textiles and garments pick up velocity.

These are rules with an “unprecedented kind of force,” Catharina Martinez-Pardo, a partner at Boston Consulting Group, told attendees at Textile Exchange’s annual conference in London in October. Not only do these measures have the potential to pull products off the market but they’re also underpinned by hefty fines for non-compliance.

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All of which is to say that taking a wait-and-see approach as legislators lumber toward the finish line will be less than prudent.

“​​When we look into the worldwide regulatory landscape, we see that more than 35 regulations are currently coming up,” Martinez-Pardo said. “And they are two cotton harvests [or] three, four fashion weeks away, so they’re right around the corner when the impact and the need to comply will really be present.”

Certainly, laws that hit cruising speed in 2023 have already caused plenty of consternation, the nearly two-year-old Uyghur Forced Labor Prevention Act, a.k.a. the UFLPA, in the United States being a prime example. Over the past year, Customs and Border Protection (CBP) detained nearly 790 apparel, footwear and textile shipments valued at $40 million. Of these, 430, worth $12 million, were ultimately denied entry on suspicion of having a nexus with China’s Xinjiang Uyghur Autonomous Region, where experts say that persecuted Muslim minorities are forcibly recruited into low-paying jobs as part of a broader campaign of indoctrination and repression.

What the mandate has done is create a “really effective sea change” in the way that the U.S. government manages forced labor enforcement, Robert Silvers, undersecretary of strategy, policy and plans at the Department of Homeland Security, told the U.S. Fashion Industry Association’s Apparel Importers Trade & Transportation Conference in New York in November.

“The burden was put on importers to substantiate the provenance of the products that they want to bring in,” said Silvers, who also serves as chair of the inter-agency Forced Labor Enforcement Task Force, or FLETF. “And it created an onus on importers, on the industry, to know their supply chains and to have the kinds of supply chain transparency, supply chain tracing and due diligence practices in place to be able to talk to CBP about where their goods are sourced down to the commodity level, cotton obviously [being among those] top of mind.”

Silvers said that the FLETF has, through its “surgical” and “targeted” approach, found a “very appropriate” balance that will continue into 2024, including the “steady gains” of adding new names to the Entity List, which identifies companies that U.S. government deems complicit in what the Trump and Biden administrations have described as “genocide” against Uyghurs and other Turkic groups.

“It’s kind of like cleaning and painting a cruise ship,” he said. “You keep moving onto the next part; you keep touching it up because supply chains are shifting, companies select different vendors, vendors recalibrate what they’re making [and] where they’re sourcing from. And we’re constantly getting market intelligence, we’re constantly getting new technology that we can use to do our work, and industry, likewise, is experimenting, in a very good way, with technologies also, giving it more power to make smart choices about supply chains and getting more certainty for itself. It’s an iterative, ongoing process.”

While the FLETF is wary of endorsing any kind of “silver bullet” solution for ascertaining the origin of products, Silvers sees a strategic alignment between government and industry as “inevitable.”

“We’re very open to receiving DNA testing evidence from importers; there are a few [supply chain mapping] technologies and platforms that are showing a lot of promise to be able to go deep in the past and wide in terms of different tiers of the supply chain,” he said. “We’re taking note of the kinds of submissions we’re getting. We really want your feedback as to what you find effective as industry partners. And maybe we can sort of coalesce around certain approaches.”

America’s neighbor to the north has been ramping up its own forced labor oversight with the Fighting Against Forced Labour and Child Labour in Supply Chain Act, which requires large companies conducting business in Canada to issue an annual report about what they are doing to identify and address forced and child labor in their supply chain, beginning this summer.

While there is no due diligence obligation, i.e., companies don’t actually have to do anything to prevent child or forced labor from happening, the regulation creates a “name-and-shame transparency regime,” William Pellerin, a partner in international trade at Canadian law firm McMillan, said in a Canadian Apparel Federation webinar in October.

“Of course, no one wants to be in a position to write in their report: ‘We are doing nothing to prevent forced labor in our supply chain.’ That would be a bad strategy,” he said. “Particularly because this will be placed prominently on your company’s website.”

The law also includes an import ban on goods made wholly or in part with child labor, period, not just forced child labor, pushing the bar much lower for non-compliance. There’s no de minimis exception, either, meaning if “there’s one fiber made of child labor in your T-shirt, that is technically a good made of child labor,” Pellerin said.

But one sticking point has been the Canada Border Services Agency’s lax enforcement of modern slavery rules put in place by the United States-Mexico-Canada Agreement in 2020. As far as Pellerin knows, there has only been one detention under the auspices of the North America Free Trade Agreement successor, and even that 2021 outlier was subsequently released.

“Nonetheless, it is the law of the land,” he said. “Come Jan. 1, when this part of the bill comes into force and the prohibition on goods made of child labor enters, I think there’s going to be a lot of questions and you should be prepared to answer them.”

Most eyes are being cast toward Europe, where a slate of wide-ranging regulations requiring fashion companies to churn out clothes more sustainably is set to be put in place by 2030, if not earlier, from compulsory digital product passports to new textile labels to a ban on the destruction of unsold clothing and footwear. A forced labor ban similar to the UFLPA is also in the works, though member states are said to be struggling to put forth a unified position before the 2024 EU elections.

Looming above them is the corporate sustainability due diligence directive, or CSDDD, which will require businesses of a certain size and stature to come to grips with harmful practices such as child labor, forced labor, runaway pollution, deforestation, excessive water consumption and ecosystem damage. The European Parliament and Council reached a provisional deal in December, paving the way for a formal adoption of the statute in 2024, though member states will likely be given another two years to incorporate it into their national laws.

The German Supply Chain Act offered a preview of how civil society might wield the CSDDD when a coalition of labor groups leveraged the then-months-old measure to file a complaint against Amazon, Ikea and Tom Tailor in April. Among their offenses, it said, was a “failure” of corporate due diligence to identify safety deficiencies and other workplace violations in their supply chains.

All this will be writ larger as many of Germany’s demands extend to the wider bloc, requiring fashion-related EU and parent businesses with more than 250 employees and a net global turnover of 40 million euros ($43.7 million) to “identify, assess, prevent, mitigate, bring to an end to and remedy” both their negative impact and those of their upstream and downstream partners, including production, supply, transport and storage, design and distribution.

“This law is a historic breakthrough,” Dutch politician and lead MEP Lara Wolters, who helped spearhead the legislation, said after the negotiations concluded. “Companies are now responsible for potential abuses in their value chain, 10 years after the Rana Plaza tragedy. Let this deal be a tribute to the victims of that disaster, and a starting point for shaping the economy of the future—one that puts the well-being of people and the planet before profits and short-termism.”

But a green and just transition cannot happen in a silo, Javier Sancho, head of global issues and innovation at the European Union Delegation to the United States, said at Global Fashion Agenda’s Boston summit in September.

“This is a global issue and therefore, it requires a global effort,” Sancho said. “It must be a joint endeavor. My job as a European Union representative to the United States is to promote the European Union’s policies that facilitate a common understanding of the challenges we face on both sides of the Atlantic so that we can identify and, more importantly, implement solutions together.”

Take waste management, for instance. “We want producers to accept and take responsibility for the waste arising from textile production and manage them so that we can reuse and recycle more textiles,” he said. “That should have a major international impact. The export of textiles from the European Union has tripled in the last two decades. We want to end the mountains of unwanted textiles that cause pollution overseas.”

While Sacho said that the EU is arguably ahead of the United States when it comes to regulating clothing and textiles, momentum continues to build across the pond. Extended producer responsibility is on the docket in California this year, as is an effort to revamp the chemicals labeling scheme known as Proposition 65. The Golden State’s PFAS ban remains on track for 2025. So are its recently passed Climate Corporate Data Accountability and Climate-Related Financial Risk Acts, which will require companies of a certain profitability to report their Scopes 1 to 3 greenhouse gas emissions, in the case of the former, and publicly divulge their climate-related financial risks and their mitigation strategies, in the case of the latter, for 2026.

One letdown for environmentalists? In October, Governor Gavin Newsom vetoed a bill that would have required plastic microfiber filters on new residential washing machines sold in California by 2029, the result, advocates say, of pressure by appliance manufacturers.

“The governor pointed to cost as being one of the major reasons behind his veto,” Lisa Erdle, director of science and innovation at the 5 Gyres Institute, a Santa Monica-based nonprofit that backed the bill, told Sourcing Journal. “But the cost of doing nothing is even greater. We‘ll continue to move forward in California and also in other jurisdictions. We know that there‘s a real desire to have something in California; we saw lots of support from the public and from other NGOs and also from brands. It’s not the end of the road.”

On the East Coast, New York’s Fashion Sustainability and Social Accountability Act will gear up for another go at the state legislature, while the Fashioning Accountability and Building Real Institutional Change, or FABRIC, Act, hopes to put an end to the “misuse” of piece-rate pay for 100,000 garment workers nationwide. Conversations about de minimis reform to increase customs scrutiny on small, low-value packages from e-commerce giants such as Shein and Temu, which have trouble shaking allegations of forced labor use because of their associations with China, are also ongoing.

Maxine Bédat, executive director of the “think and do” tank the New Standard Institute, which supports the bill, for one, is sanguine about how legislation can get the entire industry to clean up its act, particularly when it comes to greenhouse gas emissions.

“Just having disclosures does not create the necessary drive for impact reductions,” she said at the United Nations climate talks in Dubai last month. “We actually need to see—which is what the Fashion Act does—brands meeting [mandatory] science-based targets and having accountability when they don’t. I think that is how we get the entire sector—not just folks working within a voluntary system—to come to the table and put in the necessary resources. Because at the moment, a company is at a competitive disadvantage for doing so.”