Can the New York Fashion Act Stop the ‘Race to the Bottom’?

Jasmin Malik Chua
·5 min read

The New York State Fashion Sustainability and Social Accountability Act—or Fashion Act, for short—isn’t another piece of due diligence legislation, said Maxine Bédat, executive director of the “think and do” tank the New Standard Institute and one of the measure’s architects and biggest supporters.

“It’s such a bad term for what is meant by this,” Bédat said at a panel at Kingpins New York last week. “That’s not what the law is. The law is we have a co-responsibility.”

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And there’s little that the bill, which State Senator Alessandra Biaggi and Assemblywoman Anna R. Kelles first unveiled in 2022, doesn’t factor in. If transposed into law, the Fashion Act would require apparel and footwear retailers making at least $100 million in revenue and conducting business in the Empire State to map and monitor their supply chains, disclose their environmental impacts, set and achieve science-based targets on greenhouse gas emissions and combat workers’ rights abuses. As a “New York bill with a global reach,” as Bédat described it during its introduction, the measure seeks to break an often opaque industry out of its “black box.”

It’s an ambitious, some say audacious, goal, one that the bill’s authors have sought to refine over the past two years with feedback from industry and civil society stakeholders. The denim-focused Transformers Foundation, previously known as Kingpins Transformers, is also working with Bédat et. al. to hone the would-be law’s language. But the “general structure” is there, she said, and the goal is to get it “over the finish line,” beginning with the reintroduction of a redressed version of the bill in New York’s State Senate and State Assembly during the 2024 legislative session, now in full swing. Both chambers have to pass it before the governor can sign it into law.

How the law will operate in practice, however, is less cut and dry.

Regulation isn’t new to supply chain vets like Naurin Muzaffar, strategic advisor for sustainability at Pakistani denim mill Crescent Bahuman. Manufacturers have long faced such requirements through their buyers’ codes of conduct. And while legislation like the New York Fashion Act targets retailers, it’s their suppliers that expect to shoulder most of the demands. Would that mean the same cycle of audits?

“That is one piece I think that as suppliers we are quite unanimous in terms of our concern,” Muzaffar said at the same panel. “The ‘how’ of it is not as defined. I understand that the initial piece of legislation comes in and then there are regulations and rules that come in after that define those, but if the law itself does not give you that space, then it becomes very difficult for the regulations to include that.”

Legislation offers an opportunity to create dialogue where there has been little room for it, she said. Conversations to date have largely been unilateral, with buyers laying out what needs to happen and suppliers acquiescing with little additional support. Unless there is a true partnership, Muzaffar said, the industry’s social and environmental profile will never improve.

Certainly business as usual will not work anymore, added Miran Ali, vice president of the Bangladesh Garment Manufacturers and Exporters Association, the South Asian nation’s premier trade group, and global spokesperson for the Sustainable Terms of Trade Initiative, a manufacturer-led coalition lobbying for fairer purchasing practices.

With another wave of due diligence laws rippling across the European Union, suppliers worry that the “entire burden of compliance” will fall to them, as has happened with industrial safety in Bangladesh and now with Pakistan, he said.

“A lot of the cost of compliance is simply that the credit is taken by the brand, and the cost is passed on to the supplier—that’s something we don’t want to see,” Ali said. “We want to make sure that the law, once enacted, gives a statutory role to manufacturing associations or manufacturers directly to address these issues to the government, to the attorney general, to the State Assembly, and not at the threat of losing business.”

Suppliers are loathe to complain about the behavior of a certain brand or retailer because they risk losing not only that buyer but also “every other client who’s friends with the client who knows that I complained,” he said. But what manufacturers want is simple—and reasonable: fairer terms of trade. “We don’t want more money. We’re not asking for more orders. We’re just asking to be paid for [what’s been] placed and on time,” Ali added.

Critics of the Fashion Act have called it unrealistic, or too punishing in its demands of companies with little visibility or control of its supply chain beyond Tier 2. Others say it needs to install even more guardrails, say to manage textile waste or promote living wages where poverty pay is the norm.

Bédat said that anything new is bound to stir up feelings of discomfort—particularly if it’s spawning other, slightly different (for now) versions elsewhere—but that she’s been grateful for the conversations she’s been having that will set the Fashion Act for success. The version the bill’s authors are working on takes a deeper look at purchasing practices than its original iteration, including factoring in the cost of labor into order pricing. Something that should gain more clarity in time is the investments brands and retailers might make with suppliers “so that it’s a true partnership, a real joint responsibility,” she said.

For Bédat, the Fashion Act is many things but what it isn’t is a “silver bullet.” There is still a need for extended producer responsibility legislation and regulation in manufacturing countries. What it can do, “if we get it right,” however, is assist with the sustainable transition by making its importance “rise” through the ranks of power by attaching legal and financial repercussions to non-compliance.

“Right now, we are in this race to the bottom, and it is not working for anybody,” Bédat said.