Is Amazon's Third-Party Marketplace Stoking Worker Exploitation?

Yahoo

3 days ago

Despite Amazon's claims that providing 'safe, healthy and fair' working conditions is a prerequisite for any entity it conducts business with, deficiencies in the Everything Store's due diligence requirements for the half a million 'hidden' sellers that make up its third-party marketplace have created blind spots where worker exploitation can thrive, according to a blistering new report.
This was a problem in 2019, when a Wall Street Journal exposé found sweaters, clerical robes, fishnet body stockings and other items made in Bangladeshi factories that were blacklisted after the Rana Plaza collapse for their unwillingness to fix safety problems such as missing sprinklers, crumbling foundations or faulty wiring. It remains a problem six years on, Labour Behind the Label said, because Amazon still doesn't apply the same oversight rules to third-party sellers as it does to the manufacturers of goods sold under its own imprimatur.
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One pandemic and a massive uptick in online spending later, the problem is arguably worse for a company that has also since become a force to be reckoned with in apparel and footwear sales, said Anna Bryher, policy lead at the Bristol-based workers' rights nonprofit. In her native United Kingdom, online shopping now accounts for nearly half of all clothing, with platforms like Amazon gobbling up the bulk of purchases. But while some British e-tailers are starting to roll out more rigorous accountability and transparency measures, the industry by and large lacks 'coherent standards,' she said.
Nowhere was this made more apparent than when Labour Behind the Label tried to find out more information about where Amazon seller products sold in Britain are made. It tried sussing out suppliers in Turkey. It tried buying data. It tried looking at lists of services and shipping manifests. Eventually, the organization was able to scrape addresses from U.K. sellers and match them with deliveries from Pakistan. It ended up doing field research into the conditions behind three products: a girl's crop top emblazoned with the hashtag #SELFIE, a denim maxi skirt and a pack of three ladies' nightdresses in ditsy prints. Speaking to workers in Faisalabad and Karachi, Labour Behind the Label found chilling commonalities: illegally low wages, forced overtime, precarious piece-rate contracts without social security benefits, rampant harassment from managers and audits that were described as a 'sham.'
'With my current insufficient earnings, we can only afford the cheapest possible food instead of having nutritious meals, including no milk, meat, fruits, salad, etc. We avoid socializing and joining wedding events even in the family because we cannot afford clothing for the purpose,' said Abdul, who supports a family of seven on 32,000 Pakistani rupees ($112) a month, well below the 38,280 rupees ($134) he's entitled to receive by law. 'Consumers should be aware of our living state. They should know what conditions the workers live in who prepare these fantastic products for others. We cannot afford to buy the products we make.'
Bryher said that Labour Behind the Label focused on small to medium-sized suppliers because it was clear that their limited resources and informal capacity made them less able to properly engage in compliance activities, rendering them more susceptible to falling between the cracks. Many SMEs also employ fewer than 50 workers, placing them outside the domain of labor laws such as the Industrial Relations Act and allowing them to escape external oversight. At the same time, she said, Amazon as a 'facilitator' of mass-market access undergirded by such factories has a duty to ensure visibility of risk in these supply chains—and, just as importantly, ensure that remedy is available to workers whose rights have been violated.
'The UN guiding principles on business and human rights say that whether you are causing or contributing or are linked to businesses that are impacting negatively on human rights, you have a duty of diligence, so it's not even just our opinion,' she said. 'Amazon does have a proportionate duty towards ensuring that harm is not impacted in the sales that it profits from.'
Amazon said that it requires all products offered in its stores to comply with its supply chain standards for labor rights, health and safety, and that it will take decisive action if it can confirm Labor Behind the Label's allegations, up to and including withholding funds, terminating accounts and making law enforcement referrals.
'We take these allegations incredibly seriously and are currently investigating these claims,' a spokesperson said. 'Selling partners who list products in our stores must comply with our supply chain standards, even when they exceed the requirements of applicable law.'
While Amazon is a substantial player—86 percent of Britons of shop on the platform, with 70 percent partaking at least once a month and 17 percent weekly, according to freight-forwarding firm Frisbi—it's by no means the only one, Bryher said. Shein hosts 100,000 sellers on its U.K. website, Asos 850, Next, 760 and John Lewis 540. Most brandish the same kind of supplier code of conduct, with varying degrees of risk assessment. Asos stands out, Labour Behind the Label said, because it requires partner brands to submit a Tier 1 factory list as part of the onboarding process. The e-tailer also asks that partner brands have an ethical policy (plus a contact at the company it can call on), map their supply chain, conduct regular audits, provide workers with a grievance mechanism and demonstrate how they take action to tackle labor violations.
'We hope to continue discussing with other e-tailers about what is an industry standard? What's the right thing to be done by all e-tailers, with respect to third-party brands? What's the right remedy mechanism that they could be offering collectively?' Bryher said. 'There are some best practices out there, as Asos shows. It's become normal for big brands to be publishing their supply chains and that data has contributed significantly to how unions and worker rights groups are able to then contact brands if a violation is found. And so we hope that the same would happen for third-party brands.'
The issues that fashion purveyors were 'so worried about'—a leading one was that proprietary information might be stolen by competitors—haven't materialized, she said, before adding, 'Everybody already knows that they share factories anyway, so why does it matter?'
Labour Behind the Label is also calling for what it describes as an 'urgent' transformation in policy and practice to create marketplaces that protect worker rights and 'stop masking' bad behavior. Post-Brexit Britain is wrestling with whether its Modern Slavery Act is still fit for purpose; Bryher calls it 'woefully inadequate' and former Asos chief Nick Beighton has previously called for its toughening up. The European Union's Corporate Sustainability Due Diligence Directive, or CSDDD, would have created legal obligations for retailers to flag and address social and environmental malfeasance in their supply chains, but much of this is now up in the air because of a simplification bill that many of its critics say amounts to deregulation.
'It would rule out Amazon's relationship with any businesses beyond the ones that it has a direct contractual understanding with,' Bryher said of the omnibus. 'The limiting of the scope will rule out most of Amazon's responsibility, and it's possible that it is not a happy accident for Amazon, but perhaps by design also.' The Jeff Bezos-founded company's lobbying efforts with EU lawmakers, she said, have noticeably ratcheted up in 2024 and 2025, coinciding with the 'path of the omnibus.' In 2022, there were eight declared lobbyists; by the first quarter of this year, 49.
Bryher is also concerned by Amazon's announcement earlier this month that its hosted cloud division will be accelerating its AI integration with Debenhams Group, owner of Boohoo, PrettyLittleThing and Karen Millen, to allow for a speedier onboarding of third-party sellers, among other things. She worries that its current due diligence process could also be replicated through this tech.
'Then even more so is the responsibility of Amazon to set it up correctly so that transparency is required of suppliers and that appropriate policies, capacity and remedy mechanisms are in place,' she said. 'It's not necessarily about Amazon digging into every supply chain and doing the audits itself, it's about requiring an appropriate level of information back from the sellers to demonstrate they have some understanding of the bare minimum to protect workers in the production of their products.'
Those workers include people like Hussain Ismail, who supports five children on the 2.5 rupees (less than 9 cents) that he makes per piece of clothing. It's only by working 10-hour days that he can cobble together 35,700 rupees ($125) at the end of each month.
'The wages are not enough; we end up getting in debt,' he said. 'Grocery and utility bills are a challenge for us. What can we say to consumers? We do not have access to them. The piece rate is being decreased day by day. Workers are considered the backbone of the economy, but the capitalists are breaking that bone.'
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