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Building an ethical supply chain

At Thomson Reuters Foundation Trust Conference 2018, Jemma Emmerson, Research Editor at Thomson Reuters Practical Law In-house, met James Bartle, CEO and Founder of Outland Denim, a premium Australian-based denim brand, whilst sitting on the front row. After a brief chat about slavery practices in manufacturing, Bartle politely excused himself and casually walked up on stage to speak on the next panel. The session was titled, ‘Slave-Free’: A Unique Selling Point?

After the conference, Emmerson caught up with Bartle to dig a little deeper into how companies can ensure ethical compliance in their supply chains. As well as learning about the life cycle of a pair of Outland Denim jeans and the company’s business model, Bartle provided some practical advice for ethical-based start-ups.

The inspiration behind Outland Denim

Inspiration can spring from unusual sources. For Bartle and his wife, the impetus for starting Outland Denim was the film Taken, in which the main character’s daughter is kidnapped by sex traffickers. Shortly after watching the film, the couple spent eight years travelling across South East Asia researching manufacturing practices and premises. They finally settled on Cambodia, where they founded a manufacturing facility, a ‘sewing site’, as they call it, to produce their premium jeans.

Bartle informs me that, in the fashion industry, a designer owning a manufacturing facility is very uncommon. But for Outland Denim, the arrangement is essential to ensure that the business is run in the right way. Bartle explains that the company is built on four pillars:

  • Opportunity
  • Training
  • Education
  • Living wages

Each element is essential to the overall aim and structure of Outland Denim. If one part is removed, the business would simply not work.

Empowerment through meaningful employment practices

The company provides careers for women who have been victims of sex trafficking in Asia. Bartle explains that, given their background, the women are often unable to secure formal, adequately paid employment. Over a two-and-a-half-year period, Outland Denim provides specialist training, equipping its employees with the necessary skills to make an entire pair of jeans. This level of expertise is heavily sought-after, especially in a country such as Cambodia where most factory workers only make one aspect of the clothing.

Many of the women join Outland Denim with little or no relevant experience. Nevertheless, regardless of their ability, each employee starts on a living, not minimum, wage and is able to move up the income scale as their skills develop. The employees also receive a range of other training, including lessons on handling personal finances and English language classes. For Bartle, this approach enables his employees to live meaningful, empowered lives providing:

  • The skills and support necessary to grow their careers
  • Financial stability through a living wage
  • Practical tools that help the women take responsibility and make informed decisions

Pushing compliance down and up the supply chain

When asked how far Outland Denim pushes anti-slavery down the supply chain, Bartle’s answer was a resounding, “all the way”. He explains that the company has a code of conduct that every supplier must sign and adhere to. To ensure compliance with the code, Outland Denim conducts site visits to audit the supplier’s ethical commitment.

Bartle accepts that this is not a fool proof system. In his experience, one of the major hurdles in the process has been creating an environment where people, including third-parties and employees, feel comfortable with being honest. Despite the difficulties involved in auditing, Bartle assures me that Outland Denim will continue with the process until a better solution is found.

Part of the reason why Outland Denim exists is to change the fashion industry. At this stage, however, Bartle accepts that his company, as a small enterprise, is not able to influence retailers’ purchasing decisions. For Outland Denim to have a true impact on the sector, he believes that its jeans need to hang alongside the world’s leading brands.

“By bringing the brand into the mainstream and making it readily accessible in well-known stores, Outland Denim is putting its products and its ethical beliefs firmly on customers’ radars”, says Bartle.

Top tips for others

For Bartle, when thinking about ethical supply chains there are several considerations to bear in mind. Most crucially, focus on the product, he says, adding: “Too often people obsess over the ethical elements and lose sight of the product. We can all be very passionate about and committed to improving supply chains. That’s the easy part, most people are in the game to make an impact. But without the product being beautiful and exceptional, no change will ever be made”.

This means, among other things, investing time in developing a business plan and ensuring that there is a place in the market for the product. Once this has been done, companies should then assess whether and how they can produce the product to the requisite ethical standard.

The team at Outland Denim are realistic; they accept that they will never be able to compete at the price or pace of fast fashion and nor do they desire to. Bartle notes that “it would be impossible to produce products at such a low price without slavery existing within the supply chain”.

Therefore, when thinking about ethical supply chains in the fashion industry, it is important to be wary of pricing that doesn’t make sense. When purchasing, realistically assess whether the product could be produced at the given price without slavery. To get full transparency on the supply chain, you may want to consider Outland Denim’s approach of auditing suppliers and developing a mandatory code of conduct.

It is also important to seek out and work with partners who are as passionate about ethical supply chains are you are. Aim to build a network of like-minded peers and commercial contacts that you can share ideas and practical advice.

Technology is now playing an increasingly important role in monitoring ethical compliance in supply chains. Therefore, when thinking about how to develop an ethical supply chain, also look at people and practices outside of your industry for inspiration and guidance on how to improve your processes.

This article was first published on Thomson Reuters In-house Blog. For a more in-depth insight into Outland Denim, see Business View: How Outland Denim built its ethical supply chain (case study).

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