Levi Strauss drops from first to fifth place in ETAG Report Card

January 29, 2007

In December 2006, the Ethical Trading Action Group (ETAG) published its transparency ranking of 30 major apparel brands and retailers based on the information they provide to the public on their efforts to address labour rights in their global supply chains. Levi Strauss & Co. took first place in ETAG's 2006 Transparency Report Card.

Since that time, however, Levi Strauss & Co. has been suspended from the UK-based Ethical Trading Initiative (ETI) for refusing to make a commitment to a living wage for the thousands of workers worldwide who manufacture its products.

The ETI is a UK-based alliance of companies, non-governmental organizations (NGOs) and trade unions, promoting and improving the implementation of corporate codes of conduct that cover supply chain working conditions. The ETI Base Code, which member companies must strive to meet, sets out minimum labour standards for their supplier factories around the world, including payment of a living wage by local standards. You'll find below a January 20, 2007 article from The Times, which provides more detailed information on the Levi's suspension.

As a result of Levi Strauss & Co's suspension from ETI, ETAG has reduced Levi's score from 78% to 69%, placing it fifth in the ranking, behind Reebok, Mountain Equipment Co-op, Adidas, and Gap Inc. Levi Strauss lost points for no longer participating in a multi-stakeholder initiative and, as a result, for no longer having a formal third-party complaint process that allows for independent, third party investigations in response to complaints from workers or other interested parties. We announced this decision to the news media today.

"Real wages in the global apparel industry have been dropping in recent years as international brands slash the prices they pay to their suppliers to make their clothes," says Lynda Yanz, Co-ordinator of the Maquila Solidarity Network, which acts as the secretariat of ETAG. "Garment workers' wages are almost always insufficient to meet workers' basic needs. Now more than ever, major brands and retailers have a responsibility to ensure that the workers that produce their goods are paid a living wage.

"It's not good enough to say local markets in developing countries will set appropriate wage levels," says Yanz. "Not while brands and retailers demand ever-lower prices for their manufactured goods and move production to cheaper locales at a dizzying pace."

Levi Strauss & Co. is not the only brand that is failing to implement a living wage for workers in its supply chain. In fact, one would be hard pressed to name a major brand that has ensured a living wage is paid to the workers that manufacture its products. Part of the difficulty is that under the dominant business model, brands and retailers acting alone are limited in their ability to improve wage levels in factories producing for multiple brands unless they significantly alter their purchasing practices and sourcing patterns.

It's for that reason that participation in multi-stakeholder initiatives that are committed to addressing the living wage issue is critical. Brands and retailers must commit to addressing the issue of living wages in a systematic way in cooperation with trade unions, NGOs and governments. We are calling on Levi Strauss and other brands to commit to actively and systematically address the living wage issue through their participation in multi-stakeholder initiatives like the Ethical Trading Initiative.