Legislation, Regulation and Our Industry: Update

IAF is closely involved with or close to the current development of legislation or regulation that is expected to have a major impact on our industry. Perhaps the most important impending legislation is the EU’s Mandatory Due Diligence legislation which was set to be proposed by the European Commission this June, but is now expected to be proposed towards the end of Q3, 2021.

Due Diligence legislation will require European brands and retailers buying apparel to follow certain procedures to reduce negative effects of their direct and indirect actions on their supply chains, also outside of the EU. IAF has always considered the concept of due diligence to be good news for the global apparel industry, as it will lead to a better distribution of risks and responsibilities in the supply chain and because purchasing practices are an integral part of the concept. However, a lot can go wrong in the implementation, which, if not done well, can lead to an unbearable burden for SME brands and eventually also an additional burden for manufacturers. A strong lobby, involving many IAF’s European members and of course IAF’s European member EURATEX, is working on preventing this scenario.

Alongside the mandatory due diligence legislation, in numerous European countries, national legislation is already being developed that contains some part of the expected European due diligence legislation. In countries such as the Netherlands and Germany, governments are putting pressure on the European process by already installing legislation. In addition, the EU has just revised its non-financial reporting directive into a Corporate Sustainable Reporting Directive (CSRD) The CSRD will act as the reporting arm of forthcoming EU due diligence legislation. It will be applicable also to certain SMEs. It is clear therefore that the ball will keep rolling now and the industry will continue to move towards implementing a human rights due diligence approach.

Another important topic, especially in the wake of the COVID-19 pandemic, is social protection. As member of the International Working Group of the ILO Call to Action representing manufacturers, the IAF is closely involved with the Call to Action’s efforts to accelerate the development of adequate social protection programs in the eight priority countries in the Call to Action. We are now at the stage where the ‘tripartite’ stakeholders, including business (buying brands and retailers, manufacturers), unions and government have reached an agreement on a common approach. IAF will work with its members in the priority countries on the implementation that will follow and also communicate with all of our members to keep them informed of the developments on social protection.
Please contact the IAF Secretariat at crietee@iafnet.com, if you have questions about these important developments.