ABSTRACT

A compliant readymade garment factory is a key requirement for most of the reputed global

garments buyers. Compliance means to comply with something or yield to the wishes of

another. Compliance ensures all labour rights and facilities according to the buyer code of

conduct and the aim of compliance is to strictly maintain the labour law. The international

apparel trade is fiercely competitive. In light of growing competition among readymade

garment exporting countries and consumer preference for products which meet internationally

recognized social standards, it is essential for suppliers to improve social compliance in their

factory. Worldwide environment concern is a major issue, hence, environmental safety

compliance has also become essential. Along with all the compliances, product integrity and

quality assurance of the final product will be critical to make a place in the international

markets.

The present study focusses on understanding compliances in terms of people and processes,

tracing changes in compliances in the readymade garment industry in the last decade,

categorizing compliances in basic areas as mandatory and non-mandatory compliance issues.

To establish the relevance of compliances in a readymade garment industry and to study the

setup of a unit to evaluate the implementation of compliances via a case study of Orient Crafts

Ltd. For this case study an audit was conducted to evaluate the unit and check its level of

compliance. A field study approach was selected for this research work. Secondary data was

collected through journals, articles and newsletters from AEPC, WTO and ILO. This data was

substantiated by primary data via interviews and observations. Business manager for audits

from Intertek India Pvt. Ltd. and compliance team members and assistant director for quality

assurance from GAP Inc. were referred to for information regarding existing state of

compliances in the readymade garment industry.

AEPC has taken an initiative to create awareness and motivate the manufacturers to conform

to a more sustainable production of goods. Several western countries like the USA, have raised

concerns regarding the usage of child labour in production houses in developing countries. In

the last decade there has been an increased demand for compliances in the export sector to meet

the parameters of the international buyers. This has given rise to adherence to compliance

starting from labour laws and now towards working conditions, health and safety, wages and

benefits along with the environmental compliances. Consumers, governments and

communities alike are concerned with how the manufacturing of consumer products impacts

the environment. Considering the current scenario of increased awareness of environment

safety it becomes important to adhere to the environment specific compliance issues.

Compliance issues pertaining to people are termed as social compliances which includes labour

laws, wages and benefits and workplace health and safety, whereas those compliances that

govern the processes in a garment industry refers to the environmental compliances and quality

assurance. Legal compliance is a part of all the areas of compliance whether it is social,

environmental or quality compliance. Mandatory compliances are the ones which are essential

for a manufacturer to conform to for being a compliant unit. Whereas, non-mandatory

compliance issues are the benefits which a unit can avail from various government policies or

in form of incentives.

Orient Crafts Ltd. was selected as a unit for conducting an audit for constructing a case study

which included observing the general setup of the unit with respect to compliance

requirements. Overall evaluation report termed the unit as a compliant unit with an opportunity

for improvement in certain areas. All the codes of conduct for both social as well as

environmental compliance were implemented. The unit had all floor markings clearly

indicating exit ways, there was a provision for emergency light, fire extinguishers were in place

with instructions, hand rails were provided, an emergency evacuation plan was well defined on

walls of every floor and workers wore metal gloves for safety wherever required. Follow ups

such as need for another female guard and missing signatures of employees on their dental

certificates were noted. The unit took an initiative to comply with various non-mandatory

compliances as well, adding to its profile.

In the current setup of the readymade garment industry compliance issues have gained a lot of

momentum in the functioning of this sector. The overall product quality is judged on

parameters that concern the intrinsic value of quality as well as the practices that govern

production, use of materials, and disposal of wastes, issues of labour laws and safety and eco

consciousness. Quality marks in the near future will also entail codes of conduct for

manufacturer to judge the value of any product.