Author: Ariane Feist

The Manufacturers Payment and Delivery Terms Initiative has taken an important step yesterday, concluding its phase 1 during its second Global Working Group Meeting. This initiative has been started by the STAR Network- which is supported by GIZ FABRIC- and by the International Apparel Federation (IAF). It is supported by the Better Buying Institute and the OECD and a range of experts. It is an initiative of now 13 participating manufacturing associations in the apparel and textile industries from 9 countries, together representing close to 70% of initial global apparel exports. The number of participating associations is set to grow further in the coming months.

The main deliverable of phase 1 is a white paper that will be released towards the end of April, after it has received input from the Initiative’s Advisory Board, in which major stakeholders representing buyers, government, MSIs and academia are well represented. Even though full details will be shared when the white paper is published later, today’s meeting demonstrated that the participating associations clearly agree on the following key principles that form the foundation of this paper:

First, this initiative has started from the recognition that even though buyer’s own initiatives to improve purchasing practices are important, they are not sufficient. While buyer purchasing practices have been increasingly scrutinized over the last decade for the impact they have on economic, social and environmental sustainability, in the past years it has become very clear to manufacturers that their vulnerability has increased and that they must play a stronger role in setting standards for purchasing practices that support mutually beneficial and sustainable partnerships.

Second, the initiative’s participants agree to make ‘commercial compliance’ the core principle of this initiative. In the context of the buyer-supplier relations in the fashion and textile industries, the initiative is defining ‘commercial compliance’ as purchasing practices that do not cross the boundary of misuse of buying power to the obvious and avoidable detriment of the manufacturer. In phase 2 of the initiative the united manufacturers associations will build structures for the enforcement of ‘commercial compliance’, which will inevitably include instruments to achieve transparency.

Finally, the white paper’s main body will consist of three tables, one listing ‘red lines’ for purchasing practices not to cross, one listing a range of recommendations for improving purchasing practices and one listing recommendations for further research. The list of ‘red lines’ clearly sets the bar for ‘commercial compliance’. “Publication of the red lines in a few weeks’ time will enable us to put the principle of commercial compliance into practice. The list of recommendations for improvement of purchasing practices and for research meanwhile will form the foundation for a structural dialogue that we are setting up in phase 2” says Matthijs Crietee, Secretary General of the IAF “This will be a dialogue on the improvement of purchasing practices involving the world’s main apparel manufacturing associations, buyers and organisations representing them.” The research list includes such topics as an international arbitration mechanism, the transfer of ownership of goods and research aimed at modernizing performance indicators that measure the value of end-to-end contributions to profitability.

The work on the Manufacturer’s Payment and Delivery Terms Initiative is continuing with the publication of the white paper in late April and with the start of phase 2 in May of this year. The initiative had initially started with nine associations of the STAR Network and already expanded with four additional associations of the IAF joining.

Note: Participating associations are:

For further questions please contact:

Miran Ali | STTI Spokesperson | miran@bitopibd.com | Mobile +880 171 1565070

Fatima-Zohra Alaoui | STTI  Deputy Spokesperson | f.alaoui@amith.org.ma

Matthijs Crietee | STTI Project Lead at IAF | crietee@iafnet.com | Mobile +31 653 93 06 74

Industry Associations from Turkey, Indonesia and Morocco join Asian Associations in IAF and STAR Network Initiative on ‘Manufacturers Payment and Delivery Terms’

Four major industry associations, the Indonesian Textile Association (API), the Turkish Clothing Manufacturers Association (TCMA), the Istanbul Ready-Made Garments Exporters’ Association (IHKIB) and the Moroccan Association of Textile & Clothing Industries (AMITH) are joining the new initiative by Asian manufacturer associations to drive better purchasing practices in the textile and garment industry. The initiative, started by the STAR Network, supported by GIZ FABRIC, the International Apparel Federation (IAF) and the Better Buying Institute, presented their plans at the OECD Forum on Due Diligence in the Garment and Footwear Sector on February 3^rd, 2021. This marks a joint global effort led by manufacturers to establish a common position on payment and delivery conditions in the industry.

The initiative on ‘Manufacturers Payment and Delivery Terms’, which has been officially launched on January 12^th, comes as the apparel and footwear industry works to better connect supply to demand, reduce waste, and improve profitability, recognizing that buyers and suppliers must strengthen their relationships to both support pandemic recovery and prepare for future supply chain disruptions. As Miran Ali, STAR Network spokesperson, said at the OECD Forum: “Following the pandemic, there should be a complete reset of the buyer-supplier relationship; we should not revert back to the norm.”

In collaboration with various global stakeholders, the STAR Network, GIZ FABRIC, IAF and Better Buying are creating a safe space for manufacturers to jointly draft a set of minimum expectations and outline recommendations and best practices related to payment and delivery conditions. This includes establishing certain red lines and core principles that they deem essential for fair legitimate business.

“Suppliers from around the world are coming together to offer solutions for strengthening global supply chains,” said Dr. Marsha Dickson, President and Co-Founder of the Better Buying Institute. “Suppliers often have the best ideas for how to overcome challenges and the impacts of brand and retailer purchasing practices on workers and the environment. It’s critical their voices be heard.” Matthijs Crietee, IAF Secretary General adds: “In the end, improvements in purchasing practices are essential to driving industry-wide change.”

Suppliers participating in this effort represent roughly two-thirds of the global market share of global apparel and footwear factory exports.  Participants include members of the STAR Network and IAF, including: VITAS (Vietnam); CNTAC (China); GMAC (Cambodia); MGMA (Myanmar); TMA, PHMA and PTEA (Pakistan); BGMEA and BKMEA (Bangladesh) and now also TCMA and IHKIB (Turkey); API (Indonesia); and AMITH (Morocco). The gamechanger is the collaboration between all of these organisations. As Miran Ali formulated it at the OECD Forum: “The fact that there is fierce competition among manufacturing countries is not an impediment to collaboration.”

The initiative is supported by GIZs regional project FABRIC Asia, built on the input from STAR Network and IAF/ITMF members and managed by IAF with support from Better Buying Institute. The first phase of the project will run until March 31^st of this year.

About the International Apparel Federation (IAF)

IAF (www.iafnet.com) is the world’s leading federation for apparel manufacturers, (SME) brands, their associations, and the supporting industry. IAF’s membership now includes apparel associations and companies from more than 40 countries, a membership that directly and indirectly represents over a hundred thousand companies and over 20 million employees. IAF brings its members together to jointly create stronger, smarter and more sustainable supply chains

About the STAR Network

The STAR Network (Sustainable Textile of the Asian Region) is the first inter-Asian network of producer associations. It serves as a platform for dialogue and trust-building to exchange on good practices to make textile and garment production more sustainable and helps members find solutions to the challenges they all face. The purchasing practices initiative has been initiated together with the STAR Network in January (see press release on their website). The STAR Network has been established in 2016 with the support of GIZ FABRIC.

About GIZ FABRIC

GIZ FABRIC is a regional project that the German Development Cooperation “Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH” implements on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). FABRIC aims to foster sustainability in the Asian textile and garment industry. It identifies the common interests of key actors – in the factories, ministries, civil society and international brand manufacturers – and brings them together with the aim of developing a shared vision of sustainability and promoting greater cooperation.

About Better Buying™

Better Buying Institute (www.betterbuying.org) reimagines supply chain sustainability, leveraging data to strengthen supplier-buyer relationships and improve purchasing practices that drive profitability while protecting workers and the environment. Better Buying’s programs provide retailers, brands, suppliers, and industry with data-driven insights to help drive lasting improvements in global purchasing practices.

For further questions please contact: 

Miran Ali | STTI Spokesperson | miran@bitopibd.com | Mobile +880 171 1565070  

Matthijs Crietee | STTI Project Lead at IAF | crietee@iafnet.com | Mobile +31 653 93 06 74 

Representatives of the STAR Network, the first inter-Asian Network of Producer Associations of the textile and garment industry, came together on Tuesday, January 12, 2021 to start a new initiative calling for better purchasing practices in the textile and garment industry.

“We want to come together as associations and manufacturers in Asia, to agree on common positions regarding payment and delivery terms so that we have a stronger voice in individual and in collective discussions with brands and buyers on improving purchasing practices”, spokesperson Miran Ali, representing the STAR Network, stated. The unique aspect about this initiative is: It is raising questions around purchasing practices, such as payment and delivery terms, from the perspective of manufacturers and the associations representing them, making it a true bottom-up initiative, that all nine member organizations, GMAC, BGMEA, BKMEA, CNTAC, PTMA, PHMA, TMA, MGMA and VITAS support. “This common position will be powerful”, Miran Ali states, who estimates that the Network represents over 60% of all global apparel exports by manufacturers.

The textile and garment industry has been characterized by a power imbalance between the brands and buyers on the one end and the textile and garment producers on the other. This imbalance has been increased and made more visible during the COVID-19 pandemic, in which order cancellations, especially from European and US-brands and buyers, left many Asian producers with their backs against the wall. “The situation has been difficult before”, the initiatives’ spokesperson Miran Ali explains, “but COVID-19 changed everything. However, it does not end with COVID-19!”.

Until March 2021, the associations will work together in five working groups, defining their “red lines”, requests and recommendations on topics such as payment and delivery practices, planning and information exchange and third-party negotiations. Based on the output of the working groups, the second phase of the initiative will drive the roll-out in the industry. Many industry organizations and networks have already pledged support to the initiative. They will be involved as experts, supporting the working groups or as part of an industry advisory board. However, before brands, buyers and other stakeholders are joining the discussion table, manufacturers and associations will use the “safe space” of their new initiative to develop joint requirements and recommendations, to then communicate them with one voice.

The STAR Network serves as a platform for dialogue and trust-building to exchange on good practices to make textile and garment production more sustainable. It has been established in 2016 with the support of the German Development Cooperation Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which implements a project called FABRIC Asia, that aims to foster sustainability in the Asian textile and garment industry on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Amidst the early phase of the COVID-19 pandemic, the STAR Network had already issued a joint statement, calling for Responsible Purchasing Practices amid the COVID-19 crisis, which they published on their joint website in April 2020.

After all members confirmed their commitment, STAR and GIZ FABRIC joined forces with the International Apparel Federation (IAF) to build this purchasing practices initiative. IAF is already in contact with further IAF-member associations who are planning to join the initiative.

For further information please contact:

Miran Ali | Spokesperson miran@bitopibd.com Mobile +880 171 1565070                          

Matthijs Crietee | Secretariat crietee@iafnet.com Mobile +31 653 93 06 74