Who made my clothes? Inside Cotton On's Chinese factories

SARAH CATHARALL/Stuff.co.nz

Stuff was given an inside one of the factories making clothes for Australasian retailer Cotton On.

Six years ago, Zhang Baobao left his family behind in his village home and moved to Wuxi, a large industrial city in southwest China.

Home for the 25-year-old today is a dormitory from which he can see the garment factory where he spends up to 8 hours a day, cutting fabric for fast fashion garments that get shipped around the world.

If you've bought anything from one of the 143 apparel stores owned by the Cotton On Group in New Zealand, chances are it was made in this factory, which produces nine million items for Cotton On each year.

Garment workers Zhang Guiyan and Zhang Baobao see their baby twice a year.
SARAH CATHERALL/STUFF

Garment workers Zhang Guiyan and Zhang Baobao see their baby twice a year.

On a typical day, New Zealanders buy about 28,000 garments from a Cotton On store – Cotton On, Cotton On Kids, Cotton On Body, Rubi Shoes, Supre, and Factorie – most of which are made in China. 

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Standing on the production floor of the Wuxi Everbright factory, Zhang Baobao and his wife, 20-year-old Zhang Guiyun, talk about their one-year-old daughter, Zhang Zirui, who is being raised by their parents back in Anhui, a village in Suzhou province, 365 kilometres away.

Garment worker Liu Yue is 27 years old, from He Fei City in Anhui Province, 360 kilometres away from his workplace.
SARAH CATHERALL/STUFF

Garment worker Liu Yue is 27 years old, from He Fei City in Anhui Province, 360 kilometres away from his workplace.

It's part of the deal working here that they won't get to see their infant for at least five months. The young couple send the money they earn back home.

According to their boss, a Wuxi employee earns from the minimum wage of 1890 yuan ($380) a month, and an average of 3700 to 4000 yuan a month ($747 to $807), for working at his factory - an amount that NGOs say meets the minimum wage but is still not enough.

Guiyan smiles shyly, touching the factory security card strung around her neck, hiding the misspelt words of her t-shirt, "Uban Ourfitters, Seattle". "People treat us very well here," says her husband, who wears a white t-shirt emblazoned with the single word, "Superman".

Wuxi Everbright factory has been making Cotton On garments for a decade, and the company says they have a strong ...
SARAH CATHERALL/STUFF

Wuxi Everbright factory has been making Cotton On garments for a decade, and the company says they have a strong relationship.

It's currently fashionable to know where our clothes come from, and by the end of next year, Cotton On will join fashion giants like Zara and H&M in publishing its supply chain. However, it's also fashionable to buy cheap, seasonal clothes in a climate of perpetual sales – trends that drive fashion retailers to make ever-cheaper apparel on tighter turn-arounds. 

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"We live in a throwaway culture. The problem with that is you have to squeeze the supply chain to do it cheaper and cheaper," says Christina Dean, the founder of Redress, a UK fashion NGO working to reduce waste in the industry.

Auckland mother-of-four Sarah McLeod has stocked up on pyjamas, leggings and sweatshirts at Cotton On Kids this winter, choosing the store because it is a "one stop shop", and paying $20 for a pair of leggings, for example. "I definitely don't see Cotton On as a cheaper option but I can go in there and get everything I need in one shop," she says.

Wuxi Everbright is one of Cotton On's top 20 suppliers.
SARAH CATHERALL/STUFF

Wuxi Everbright is one of Cotton On's top 20 suppliers.

H&M is preparing to open new stores in Auckland and Christchurch, and Dean predicts more will follow.  Fashion giants like H&M and Zara are always on the hunt for the next market, she says, and New Zealand is on a par with India, where the two retailers are frantically opening stores.

"It sounds like you've barely scratched the surface with fast fashion in New Zealand," says Dean. "If I compare what is happening in India, consumers will start shopping like crazy."

But Dean urges New Zealand consumers to question the mass consumption of cheap clothing, "and ask themselves if they want a hand in it". Big business won't push for change, she says, as it makes profits through this system. "The best way to crack the egg is to start with the awakening of the consumer."

Garment workers at Wuxi Everbright work 8 hours a day, six days a week, to make clothes for Cotton On and local Chinese ...
SARAH CATHERALL/STUFF

Garment workers at Wuxi Everbright work 8 hours a day, six days a week, to make clothes for Cotton On and local Chinese brands.

Since the day founder and co-owner Nigel Austin sold his first acid denim jackets out of the back of his Ford Bronco at a Geelong market in 1988, the Australian company has surged to become one of the biggest retail giants in Australasia. Privately owned by Austin and his cousin, Ashley Hardwick, the group has 1600 stores around the globe, including 160 in New Zealand.

Fast fashion chains are increasingly throwing a spotlight on their operations in response to pressure from conscious consumers like McLeod.

As part of its desire for transparency, Cotton On invited Stuff to China in late May to its suppliers' conference and to see inside two of its 450 Chinese factories. 

An assembly room at Wuxi Everbright.
SARAH CATHERALL/STUFF

An assembly room at Wuxi Everbright.

At the conference, Cotton On managers revealed to an audience of about 300 factory owners and workers the good and the bad of outsourcing production to China and increasingly India, Sri Lanka, Cambodia, Mynamar and Bangladesh.

Star suppliers were awarded champion certificates at the end of the day. Cotton On presented statistics about those who were failing based on its audits. In 2016, 16 per cent of its factory workers weren't paid the minimum wage, 28 per cent weren't paid enough overtime, 23 per cent were paid incorrect entitlements, and 20 per cent didn't get their entitled day off each week.

Cotton On has 14 terms of trade, and paying the workers at least the minimum wage is one of those. If factories are caught underpaying staff, Cotton On's sustainability manager Adam Lloyd says the company works with the supplier to rectify the problem, keeping tabs on it through audits.

A young woman cuts fabric at Wuxi Everbright.
SARAH CATHERALL/STUFF

A young woman cuts fabric at Wuxi Everbright.

"If after numerous attempts to fix the issue the factory still does not comply, we begin an exit strategy to remove ourselves from the factory while giving them time to source new business, protecting the workers' jobs during our exit," he says.

In a further problem, a growing number of factories are subcontracting to others without Cotton On's permission to get their massive production orders fulfilled.

CALLS FOR THE LIVING WAGE

A worker checks Cotton On garments at Wuxi Everbright.
SARAH CATHERALL/STUFF

A worker checks Cotton On garments at Wuxi Everbright.

If Gershon Nimbalker, author of industry bible the Ethical Fashion Report, had his way, workers like Baobao and Guiyan would be paid at least the living wage, a minimum of US$550 a month (NZ$750). The cost? Just 50 cents extra a t-shirt.

"You have a situation where a lot of these workers are taken away from crushing rural poverty to working conditions which are only slightly better."

Nimbalker was also invited to the May conference, where he addressed suppliers and visited three Cotton On factories, including an unannounced visit to one factory where he and Cotton On managers just turned up.

Making Cotton On shirts at Wuxi Everbright factory, Wuxi. New Zealand is Cotton On's fourth biggest region in terms of ...
SARAH CATHERALL/STUFF

Making Cotton On shirts at Wuxi Everbright factory, Wuxi. New Zealand is Cotton On's fourth biggest region in terms of global sales.

His impression? Cotton On is one of Australasia's top ethical brands, he says. Its suppliers are checked by internal and external auditors. The factories were clean, and staff were provided meals and accommodation.

"But you always get the best understanding what it's like by independently talking to workers, and I didn't get that chance."

Nimbalker is also concerned about the conflict for suppliers who are under pressure not to raise their prices for Cotton On, while also being asked to protect workers wages and conditions.

About 300 garment workers at Wuxi Everbright make 200,000 garments for Cotton On a month.
SARAH CATHERALL/STUFF

About 300 garment workers at Wuxi Everbright make 200,000 garments for Cotton On a month.

Cotton On put up a slide showing it paid suppliers an average US$3.57 for a Cotton On item in 2017, up from US$3.33 in 2016; a Cotton On kids garment had risen in price from a US$2.47 average in 2016 to US$2.56 this year.

"It's a huge problem for the fast fashion and value fashion industry, where you have the brands on the one hand asking their suppliers to have greater social awareness, and on the other hand they're saying, don't put your prices up," Nimbalker says.

GOING TO THE SOURCE

Workers get paid per piece on top of their basic salary.
SARAH CATHERALL/STUFF

Workers get paid per piece on top of their basic salary.

A muddy river runs beside a five-lane highway, two boats sluggish in the distance. Six million people live in Wuxi, typically residing in tall, thin apartment blocks or dormitories attached to factories.

Our mini van heads south towards the city that was once the birthplace of modern commerce. During the Tang dynasty, Wuxi was famous for its silk farms and rice fields. Today, green fields have been replaced with skyscrapers and factories, as Wuxi is now the site of more than 300 garment factories, and industrial zones producing electronics, medicines and chemicals.

Lake Taihu is the colour of pea soup, a dirty brown watery expanse lying beneath a grey sky so bleak that it seems impossible a sun is in the sky above it. 

Peak Fun, 41, is the managing director of Wuxi Everbright, overseeing three factories and eight subcontracting ...
SARAH CATHERALL/STUFF

Peak Fun, 41, is the managing director of Wuxi Everbright, overseeing three factories and eight subcontracting factories. He is keen to create a supportive working environment, and pays at least the minimum wage.

From the 1980s, industrial parks began lining its edges, polluting the lake. The Chinese government has tried to clean up the damage, closing 1000 culpable factories, but today, about 60 per cent of the lake and its waterways are still polluted.

Wuxi Everbright is behind a security fence. Sun pierces through the haze above, as the Chinese managing director, Peak Fun, vigorously shakes my hand, his black BMW X5 parked near the entrance.

The 41-year-old manager takes us through the staff canteen, where garment workers have not long finished their supplied lunch. In the staff leisure room, a weights machine is against the wall, near a treadmill, a ping pong table and shelves lined with books.

A worker steams a Cotton On shirt at Wuxi Everbright, which will be in stores in August.
SARAH CATHERALL/STUFF

A worker steams a Cotton On shirt at Wuxi Everbright, which will be in stores in August.

One of Cotton On's top 20 suppliers,  Wuxi Everbright runs this factory and two others, along with eight subcontracted factories. Shown a factory introductory video, we watch garment workers in the company playing a game of tug of war and taking part in a fire drill.

Two buildings facing each other contain the workplace and the homes of about 150 garment workers. The couples, who must have a marriage certificate, sleep on the top floor. In each male and female dormitory, three sets of bunk beds are lined up against a wall.

The workers' wet clothes drape on washing lines on each small balcony, blocking out much of the light in some rooms. The workers can't escape the factory, as they can see it from each dormitory window. The dorms look clean, and they're not cramped, but six men or women must share a room.

A female dorm at Wuxi Everbright. Six garment workers share this room.
SUPPLIED

A female dorm at Wuxi Everbright. Six garment workers share this room.

On the ground floor of the factory and office block, a woman drops her head over a navy blue patterned Cotton On garment laid out on a table, inspecting it for flaws. On the top floor, vast sheets of fabric as big as yacht sails are spread on a long table filling one room, which two workers cut with scissors. 

Peak proudly tells us a single machine cuts 20 sheets of fabric, doing a job that used to be done by hand. In another large room, bolts of fabric are stacked on shelves, waiting to be transformed into fast fashion clothes. Along with Cotton On garments, this factory turns local designs into garments for fashion conscious Chinese. 

He has seen big changes in the 15 years since he became a merchant for the garment industry.

Another female dorm at Wuxi Everbright. This is the workers home for 49 weeks a year.
SARAH CATHERALL/STUFF

Another female dorm at Wuxi Everbright. This is the workers home for 49 weeks a year.

Of the 600 garment factories that used to be in the Wuxi area, only about half are left. Wages have risen over time, and costs have gone up. Over the past five years, global brands have left China for cheaper countries like Cambodia and Bangladesh. Peak's factory no longer makes simple t-shirts – they're made in Dhaka or Cambodia, where wages are cheaper.

In the main factory, rows of young machinists are lined up at whirring sewing machines, as music booms out of speakers on the walls. Every stitch they sew adds to the money they'll send back to their families in their villages up to 10 hours away. Each month, the 300 garment workers, who must be 18 or older, whip up 200,000 garments.

Later, Peak tells me over a lunch of soup about the "big challenge" of allowing workers to see their families. The factory has wifi, so the staff can connect with their children and relatives, and a foundation fund allows five workers a year to have their families to stay in a spare room for up to a week. Workers return home twice a year – for two weeks over the Chinese New Year and a week in October.

Guangyu Textile Factory vice-president Beck Sheng with a pink fabric that is already in Zara collections at his textile ...
SARAH CATHERALL/STUFF

Guangyu Textile Factory vice-president Beck Sheng with a pink fabric that is already in Zara collections at his textile factory in China. Cotton On sources fabric from his factory, which Fairfax Media visited.

The conditions in the two factories visited appeared adequate. When asked if Cotton On has confidence in the conditions of its other 448 factories, Lloyd says it does. Cotton On also backs the conditions in its subcontractor factories. 

"There are always improvements which can be made and we're committed to making a positive difference and improving the lives of factory workers"

Lloyd says the company is "exploring different living wage methodologies and how we can integrate these into our programs".

Guangyu Textile Factory, where workers like this one guard machines making fabrics for Westerners clothes.
SARAH CATHERALL/STUFF

Guangyu Textile Factory, where workers like this one guard machines making fabrics for Westerners clothes.

WHAT NEXT?

Cotton On's rules of trade meet local Chinese laws. However, the national secretary of the Textile Clothing and Footwear Union of Australia, Michele O'Neil, wants Australia and New Zealand to pass modern slavery laws like Britain, France and the Netherlands, to control brands making goods offshore.

O'Neil says in some parts of China, the minimum wage for garment workers is as low as US$185 (1250 yuan or NZ$250) a month and workers are denied the right to join a union.

A worker checks a textile machine at Cotton On's textile supplier, the Guangyu Textile Factory.
SARAH CATHERALL/STUFF

A worker checks a textile machine at Cotton On's textile supplier, the Guangyu Textile Factory.

"You walk into a factory you're given permission to visit and it looks clean and safe, and it looks okay, but it doesn't tell you the whole story. I hear through my international work that what happens the day before there is an audit or an international guest, that there will be some changes made. The lights will be turned on and the doors will be unbolted."

"That's not a comment on Cotton On suppliers, but we know it happens."

Lloyd says Cotton On has long-term partnerships with Wuxi Everbright and the Guangyu Textile Factory, and they did not conceal anything during the visits. "Michele is definitely correct in what she's saying, and for that reason we do conduct thousands of unannounced visits each year to ensure our suppliers are adhering to our 14 Rules to Trade. We have seen no significant disparity between announced and unannounced visits."

The final word goes to McLeod, a conscious consumer who checks ethical ratings when she shops. Cotton On, with its A-minus score, gets her tick.

The owner of a voice-over agency, Big Mouth Voices, she wants to know where her childrens' clothes come from, and that the workers who made them are well-treated. "I've stopped shopping at another brand with a D rating. In an ideal world, stores would have their ratings on their doors so consumers can be truly informed," she says.

But McLeod wouldn't want to pay more for Cotton On clothes, arguing the brand and factories should share more of their profits with the workers. "If a brand like Cotton On is truly ethically-minded, I think it has a responsibility to give more of its profits to those who have actually made the clothes, who deserve a living wage."

* Sarah Catherall's trip to China was paid for by Cotton On.

* Clarification: An earlier version of this story reported that Zhang Baobao worked up to 10 hours a day. Staff in Zhang's factory are required to work eight hours a day with the choice to work an additional two hours, for which they are paid overtime. The copy has been amended to reflect this. 

 - Sunday Star Times

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