Overcoming Institutional and Governance Problems within Fast Fashion? the Prospects of Emerging Forms of Monitoring Social Standards in the UK Garment Value Chain

Debates of global value chains (GVCs), labour and social standards have emphasised the embeddedness as well as the role of the ‘social’ in explaining GVC dynamics. In pursuing this approach further this paper aims to highlight the interaction between the governance structures in the UK Fast Fashion value chain and the regulatory framework that underpins both product and labour markets. Against a background of widespread violations of work and employment standards, it discusses two emerging, yet very different, monitoring practices: one premised on a partnership approach between lead firm and trade union, the other further developing tools of forensic auditing. The argument draws on a study of garment manufacturing supply chains in Leicester, the largest hub in the UK, as well as the particular labour market dynamics the industry is based on. It comes out of a related research project and a large number of interviews with industry stakeholders (lead firm managers, suppliers, factory managers, workers, NGOs and community organisations as well as public regulatory agencies) and makes use of a small-scale survey of garment workers that was carried out by a community organisation.

After years of off-shoring the UK apparel industry has seen renewed growth in the context of Fast Fashion and the attraction of Buying British. The UK garment supply chain is highly fragmented and operates with a detailed functional division of labour, small firm sizes, and a labour market characterised by the particular vulnerabilities of immigrant communities. In order to understand this transformation, however, it is important to investigate not only the way this phenomenon sits within global value chain dynamics but also how it is embedded in local institutions and, in particular, local labour market dynamics. Beyond widespread violations of work and employment standards, two social practices stand out in particular: a specific fiddle around the composition of wages, on the one hand, the collusion of manufacturers around unauthorised subcontracting, on the other.  An analysis of these phenomena, it is argued, needs to take into account how, both, the functional division of labour as well as specific institutional factors shape the mentioned practices.

The same approach is required in the analysis of emergent responses to the widespread violations of social standards. Broadly, lead firms are adopting one of two approaches: either to work in partnership with trade unions in developing a more rigorous and worker-inclusive form of monitoring, or to tighten compliance-based practices through a specifically tailored form of forensic auditing. This paper has two purposes: first, it aims to show how the restructuring of GVCs is dependent on local institutional contexts, arguably institutional failures in this context, consisting of omnipresent monitoring practices at the same time as private as well as public enforcement mechanisms are failing. Second, this analysis of the institutional context provides a basis to evaluate the prospects of two emerging opposite monitoring strategies of commitment vs. compliance.