The Supply Chain Ripple Effect: How COVID-19 is Affecting Garment Workers and Factories in Asia and the Pacific



International Labour Organization

To tackle the COVID-19 crisis, the ILO has proposed a Policy Framework with four pillars, based on international labour standards: (i) stimulating the economy and employment; (ii) supporting enterprises, jobs and incomes; (iii) protecting workers in the workplace; (iv) relying on social dialogue for solutions (see ILO, 2020h). As the pandemic continues to take its toll on the health as well as the economic and social wellbeing of the world population, the continued mobilization of resources and action along those four pillars remains key to safeguard jobs and livelihoods, including those in the garment sector. Continued support for enterprises, as well as the extension of social protection to all, is key to mitigate adverse impacts of the crisis in the garment supply chain. Solutions need to be found to address the needs of all workers in the sector, including women which make up the majority of garment employment.

The ILO has also provided a variety of tools for support to its constituents (see ILO, 2020o for more details). The ILO–International Finance Corporation Better Work programme is monitoring the situation in its participating countries, and provides support to workers, factories and brands in addressing the crisis and protecting workers. The ILO has also convened forums for industry dialogue, discussion and exchange, as well as publishing a series of practical factory guides aimed at supporting business resilience through improved cash flow management, income and market diversification, workplace communication, and safety and efficiency in production (ILO, 2020p).

The ILO facilitated and supports the Call to Action, an international multi-stakeholder initiative which aims to spur industry-wide action to protect workers’ incomes, health and employment and support employers to survive during the COVID-19 crisis, and to work together to establish sustainable systems of social protection for a more just and resilient garment industry. The Call to Action is a positive example of global industry-wide collaboration, but it will need ongoing commitment and coordinated stakeholder action to be effective in achieving its intended objectives.

The decline in consumer demand for garments as well as the requirement to close workplaces to curb the spread of the virus, which resulted in a sharp decrease in garment production and employment, have charted a downward trajectory steeper than the one seen during the 2008-09 financial crisis. The depth of those declines and the speed and shape of the eventual recovery in the sector will likely not be (fully) visible until 2021 or 2022. Researchers will also require more time and data to measure whether government and industry interventions have been effective and sufficient to alleviate the crises.

Given the scale of the pandemic and impact to date, the global garment industry may in the coming years face a structural realignment, shaped in part by trends that were already disrupting the sector prior to 2020. Public calls for a rethink of garment supply chains, towards greater equality, inclusivity and sustainability, are becoming louder, while technological innovation is reshaping the possibilities for how and where production takes place, and the role the factory workforce plays in this process. This reconfiguration of the industry should also take into account long-standing challenges and address the need for investment in transportation and communication infrastructure, reliable power generation, education and skills development, all of which restrict the move of the industry into higher value-added products and services. More research is needed to fully understand the potential scenarios emerging as a result of the continued disruptions brought about by the pandemic.

It remains to be seen as to whether the post-pandemic global garment industry will undergo a fundamental restructuring to forge a new – and possibly more sustainable and resilient path – or whether it will revert back to a largely ‘business as usual’ scenario. Whichever trajectory the industry now takes, workers and enterprises will be on the frontline of its impact.

It is ultimately upon national governments, workers and employers to work together with other industry powerbrokers to find collective solutions for a human-centred future of the industry – a future that can deliver on its promise to be a transformative force for social and economic good across Asia and the Pacific.

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© International Labour Organization 2020