In January 2022, the New York Assembly unveiled the Fashion Sustainability and Social Accountability Act (FSSAA), a law that purports to change the fashion industry and its role in perpetuating human rights and environmental harm. Such a law is certainly needed; the fashion industry is a massive polluter, accounting for between 2-8 percent of global emissions. The industry employs 75 million people, including workers in all parts of the supply chain and in countries throughout the world – many of whom are vulnerable and exploited.
But is this law really as powerful and “historic” as the New York Times claimed? No. After careful analysis, we believe that while we would rather see it pass than fail, there are some major flaws that weaken it. This law will not be a game-changer; at best, it will provide a little bit more transparency in supply chains, a positive but small step in the right direction. At worst, it will stop other pushes for legislation that would actually provide remedy to workers and incentivize changes in supply chains beyond disclosure.
In this blog post, we analyze the FSSAA in its current form and then compare it to the California Transparency in Supply Chains Act (CTSCA), which came into effect in January 2012. We end by explaining why the FSSAA, despite all the positive attention it’s received, is not revolutionary and may ultimately not have much of an impact on decreasing human rights and environmental abuse in the fashion industry.
The California Transparency in Supply Chains Act
In many ways, we have been here before. In 2010, California passed the California Transparency in Supply Chains Act (CTSCA), a law that at the time was touted as an exciting step in the corporate accountability world. Yet it quickly became clear that the CTSCA was merely a reporting bill. It requires retailers and manufacturers with over $100 million in revenue to “disclose their efforts” to eradicate human trafficking and slavery from direct supply chains. While this sounds good in theory, in practice, such a disclosure is satisfied by posting on the company website a clear statement of “to what extent, if any” the company verifies its supply chain, evaluates or addresses risk, conducts audits, and implements internal procedures and training for employees involved in supply chain management.
If the company discloses that it does nothing, it has met its burden under the law. Moreover, if a company fails to disclose altogether, there are no meaningful penalties – at best, the Attorney General could bring an action for injunctive relief (an unlikely scenario), resulting, most likely, in an update to the company website. This lack of real change highlights that the CTSCA aims not just to protect consumers, but actually places the burden to avoid human rights abuses in supply chains on consumers. As the statute explains,
Consumers and businesses are inadvertently promoting and sanctioning these crimes through the purchase of goods and products that have been tainted in the supply chain… Consumers are at a disadvantage in being able to force the eradication of slavery and trafficking by way of their purchasing decisions.
Unsurprisingly, the CTSCA has had minimal impact on how corporations produce their goods – goods sold to US consumers, who lack (even with the best of intentions) the capacity to systematically alter abusive practices throughout the global economy.
The Fashion Sustainability and Social Accountability Act (FSSAA)
So, is the FSSAA really better than the CTSCA? Will it improve supply chains and the lives of workers?
In many ways the New York bill is similar to the ineffective California law enacted a decade ago. Both are essentially consumer protection statutes, requiring companies to provide certain information so that consumers can make educated decisions. Like the CTSCA, the FSSAA requires that companies make information about their supply chains public, rather than mitigate the risk or provide remedy to workers. And like the CTSCA, the FSSAA only applies to companies that earn over $100 million annually. (This covers the majority of major companies controlling the industry, but it ignores that smaller producers use supply chains with the same human rights and environmental abuses.) Moreover, neither law provides workers with the ability to bring civil suits against companies.
However, there are some key differences in the two laws, including that the FSSAA has a narrow focus on the fashion industry but a broad focus on all “real or potential adverse environmental and social impacts.” In describing the type of disclosures required, the bill references the UN Guiding Principles on Business and Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work. This express connection to international labor and supply chain standards is important. However, the FSSAA does not require companies to meet international standards. While grounding laws in international standards is important, the bill should require that companies live up to such standards rather than merely mentioning them in passing.
Moreover, the laws vary in what disclosures they require. While the CTSCA mandates that companies disclose the extent to which companies require direct suppliers to comply with local forced labor laws, the FSSAA requires companies to use “good faith efforts” to disclose human rights risk for 50% of their suppliers by volume. In some ways, this is a marginal improvement over the CTSCA, as it asks that companies map the entire supply chain down to the farm level for half of their goods. However, requiring “good faith effort” falls far short of requiring actual performance – and of course, companies will likely map the easier supply chains, which are also, generally, the supply chains with fewer human rights and environmental risks.
The biggest difference between the two bills is that the FSSAA includes both a monetary penalty for non-compliance and a right of action for consumers. While these are definitely improvements, they still fall short of providing agency or remedy to those actually hurt by abusive labor and environmental practices in supply chains: workers and affected communities in producing countries.
While the FSSAA corrected some of the CTSCA’s flaws, the bill’s supporters failed to learn the biggest lesson: that human rights regulation is only meaningful when it gives rights to affected individuals and communities and centers remedy to victims rather than business process and consumer knowledge. That is, instead of reporting laws, we need mandatory human rights due diligence. As a new briefing paper by SOMO, Clean Clothes Campaign, ECCHR, and Public Eye explains, a HRDD law must include “a robust liability regime and strong enforcement measures that guarantee accountability for failure to perform due diligence, as well as provide access to justice and remedy for the victims of corporate abuse.”
The New York law does not provide workers in supply chains with remedy. That is a huge flaw. Without those most impacted by supply chain practices able to ask for a civil remedy, this law remains at best only a consumer protection statute.
So…is this a good law?
A recent New York Times article praised the bill, explaining that, according to supporters of the bill, this is “an effort to meet industry where they are, recognize the good faith efforts they are already making and come up with a common standard, but do so with some teeth.” That is patently false. This is a weak bill that may have some small impact on the margins. It is certainly not a bill with “teeth” and to recognize “the good faith efforts” companies have made is a laughable way to say that the bill has been drafted with corporate interests prioritized. If good faith efforts were already being made, then why enact a law that asks for only the bare minimum?
Moreover, there are always risks when laws that are “fine” are passed. Such laws create the “risk of creating the appearance of progress with hollow HRDD laws that, while doing little to change the status quo in practice, will effectively bring legislative efforts to an end [and a] risk of inadvertently providing companies with a tool that they hitherto did not have to show respect for human rights and rebut charges of liability with little bearing on effective respect for human rights on the ground.”
Companies have more information than they make public about their supply chains. Forcing companies to provide more transparency is a net positive. But it’s just a small first step – and that it is seen as a step forward at all is only because the bar is so low. Without further legislation that requires that companies actually perform due diligence – including providing access to justice and remedy to victims – this law will become as stale and ignored as the California Transparency in Supply Chain Act.
So, yes, we support this bill. We want supply chains to be mapped and punitive measures implemented for lack of transparency – if this bill is all that is politically viable, then we hope it passes. But let’s stop pretending this is a human rights revolution.
Allie Brudney is a Staff Attorney at Corporate Accountability Lab. Reynolds Taylor is a Legal Fellow at Corporate Accountability Lab.
