Cotton is known as 'white gold' in some parts of the world. But, cotton is a toxic crop too. While occupying just 2.5% of agricultural land area, it uses 7% of the total amount of pesticides used in farming globally each year and 16% of all insecticides. The alternative lies in organic textiles, with India being home to production of 70% of world's organic cotton crop. Yet, significant challenges remain to be addressed, says the GOTS India Representative, Sumit Gupta.
The Indian textile industry is a prominent employment generator. India is on the verge of becoming the largest cotton producer in the world. India is also the second-largest producer of silk in the world. A company in South India holds the patent to produce silk without killing the silk worm. But the fact remains that value addition or the processing is the key to profitability in textiles. Combining all these facts, we can say that currently, we have a huge scope in the textile processing industry. By processing, we mean the whole supply chain. The textiles ministry is also focussed on further strengthening the garmenting sector, the final step in textile supply chain. Currently, our neighbour Bangladesh is a major garment supplier to the leading brands of the world.
Coming to organic textiles, India is home to production of 70 per cent of world's organic cotton crop. Huge quantities of organic textiles are exported from India at different processing stages from bales to yarn, fabric and finally, garment but still, there is scope of growth in garmenting.
'Make in India' campaign: Opportunity for textile industry
The launch of the 'Make in India' global initiative is intended to invite both domestic and foreign investors to India. The aim of the programme is to project India as an investment destination and develop, promote and market India as a leading manufacturing destination and as a hub for design and information. The programme further aims to radically improve the ease of doing business, open foreign direct investment (FDI) regime, improve the quality of infrastructure and make India a globally competitive manufacturing destination.
The Central government has announced an array of schemes to promote investments. Several measures have been outlined in the Union Budget 2014-15 that aim at reviving and accelerating investment which, inter alia, include:
- fiscal consolidation with emphasis on expenditure reforms
- continuation of fiscal reforms with rationalisation of tax structure
- fiscal incentives and concrete measures for transport, power, and other urban and rural infrastructure
- measures for promotion of FDI
- steps to augment low-cost long-term foreign borrowings by Indian companies
- rationalisation of labour laws
Twelfth Five Year Plan (TFYP)
TFYP also focused on enhancing manufacturing in the country. Some objectives listed in TFYP are:
- increase manufacturing sector growth to 1214 per cent to enable manufacturing to contribute at least 25 per cent of the national GDP by 2025.
- increase the rate of job creation in manufacturing to create 100 million additional jobs by 2025.
- increase depth in manufacturing, with focus on the level of domestic value addition, to address the national strategic requirements.
- enhance global competitiveness of Indian manufacturing through appropriate policy support.
- ensure sustainability of growth, particularly with regard to the environment.
It is a given fact that manufacturing can lead to degradation of the environment. The contribution of the manufacturing sector to environmental degradation primarily occurs during:
- procurement and use of natural resources
- industrial processes and activities
- product use and disposal.
Creation of jobs by textile industry
Textiles and apparel industry is considered to be less capital intensive and more labour absorptive than most other industries. Therefore, this high employment generating sector is dominated by micro, small and medium enterprises (MSMEs). They lack sophisticated technology and rely heavily on manpower. The government of India is relying on these industries (apart from food processing, leather goods etc) to drive growth in employment. Hence, their success is imperative for the country to achieve its job-creation goals.
As per TFYP, textiles and apparel industry employed 15.7 million workers in 2009-10 and is expected to employ 36.5 million workers in 2024-25.
Skill development remains an important aspect. The industry must work together with Integrated Skill Development Scheme (ISDS), ministry of textiles, to generate more skilled workforce. Emphasis should be given to creation of appropriate skill sets among rural migrants and urban poor to make growth inclusive.
Government support to textile industry
In October 2013, the Cabinet Committee on Economic Affairs (CCEA) approved the continuation of the Scheme for Integrated Textile Parks (SITP) in the TFYP. Besides the `50 crore allocated for this purpose, CCEA also approved an additional grant of `10 crore to existing parks under SITP to set up apparel manufacturing units.
Industry is well aware about the Technology Upgradation Fund Scheme (TUFS) which has been in place for more than a decade. The CCEA also gave its approval for implementation and continuation of TUFS during the 12th plan period in August 2013. TUFS aims to make funds available to the textile industry to upgrade technology in existing units.
State governments have also launched their respective Textile Policies boosting investments in the textile sectors.
Gujarat announced its Textile Industry Promotion Policy in 2012. The Rajasthan government cleared a new textile policy under the special customised package for textile sector enterprises in July 2013. Among several incentives, the new policy in Rajasthan also provides interest subsidy for setting up new industries and reimbursement of 60 per cent of value added tax (VAT) paid to the state government. The West Bengal government finalised its textile policy in August 2013. Karnataka released the new Textile Policy document in November 2013. Therefore, ample government support is in place by way of policy and investments.
In some parts of the world, cotton is known as white gold. There are 100 million cotton farmers producing cotton in 80 countries worldwide. But, cotton is a toxic crop. While occupying just 2.5 per cent of agricultural land area, it uses 7 per cent of the total amount of pesticides used in farming globally each year and 16 per cent of all insecticides. Besides, more than 90 per cent cotton being grown in India is Genetically Modified (GM) or a variant, Bt cotton. Touted by GM companies as a silver bullet against poverty and hunger, Bt cotton is proving to be neither. Farmers are gambling their livelihoods and getting into debt in the hope of higher returns.
Furthermore, there are many environmental and health concerns associated with processing (dyeing and finishing) of cotton and other textile fibres. Some examples are excessive water consumption, risks associated with ammonia treatment, effluent treatment and disposal of the treated water and solid effluents. The concept of Common Effluent Treatment Plant (CETP) is a big relief for MSMEs which cannot afford individual ETPs. Worker safety and social conditions in the textile companies is another area of concern.
Brands, NGOs, consumers and governments across the globe have been looking at more sustainable and eco-friendly options in the textiles and chemical industries. There is a growing demand for eco-fashion in the world, including India. Consumers want fashionable garments, but without compromising on ecology. This includes manufacturers being sensitive to both the environment and social conditions.
Cost of non-compliance
Running your business in a sustainable way always pays. There have been many cases in the recent past that can serve as a lesson. Every big accident starts a new episode of more stringent norms for compliance. Few major effects of non-compliance are:
- rejection of shipment
- financial loss
- loss of company image
- lost sales in stores
Some examples in three fields of compliance are given below Chemical compliance
The Rapid Alert System for non-food dangerous products (RAPEX) allows the 31 participating countries (EU countries, Norway, Iceland and Liechtenstein) and the European Commission to exchange information on products posing a risk to health and safety of consumers and on the measures taken by these countries to do away with that risk. Once a RAPEX notification is issued, the product needs to be recalled from the market, and sometimes from the end users as well.
A law popularly known as Prop-65 in California, US is enforced through litigations by Citizen Enforcers. Average settlement in 2010 was US$ 75,000 per litigation. In 2012, the number of litigations for phthalates, lead or lead compounds was 407.
The April 2013 Rana Plaza fire tragedy in Bangladesh where 1,127 workers were killed has been responsible for a lot of bad press for Bangladesh, with loss of business as many brands moved out of the country. It finally led to the creation of Alliance and Accord and fire and building safety audits are going on in various garmenting factories. Textile companies in south India have been garnering negative attention in the international media for the Sumangali Scheme.
In January 2011, 720 dyeing/ bleaching units were shut down in Tirupur for polluting the Noyyal river. This led to huge losses followed by investments in Zero Liquid Discharge. Similar incidents have been happening in many parts of India where the owner had to shut the unit immediately due to non-compliance with air and water pollution norms. In July 2011, the first Dirty Laundry report of Green Peace International brought focus on two Chinese companies, which were dumping their effluent directly in Pearl and Yangtze river deltas in China.
Such accidents, rooted in intentional negligence, cause huge financial losses, loss of health and loss of lives. Definitely, this also questions our capability to supply products to an international market that is consistently becoming more conscious of sustainability. The textile industry as a whole needs to establish a baseline of understanding to initiate positive action that can make the difference that is now required. Our approach to compliance needs to change from compulsion to self-initiative.
Sustainability claims and third party certification
Many small and big brands are making sustainability claims. From farm to retail, it's important that sustainability claims have credibility and traceability. Consumers want to make truly sustainable choices and brands need to make verifiable claims. Third party certification gives brands and consumers the confidence to know that their claims and choices are trustworthy and making a real impact. Buyers and consumers insist on a third party certificate instead of self-declarations.
Voluntary Sustainability Standards (VSS)
VSS can play an extremely important role in providing businesses with frameworks for self-regulation, and making them more competitive in the sustainability conscious global markets.
VSS as a mechanism and tool for businesses/industry self-regulation, is increasing in use and scope. Standard setting, as a trend, is gaining momentum in India. While use of VSS in the domain of sustainable development is much higher in developed economies, awareness, national and global relevance, usefulness and impacts of VSS in India is relatively low.
India is trying to achieve 8 per cent growth target with balanced growth in all sectors. While this is commendable, it also has negative impact on environment and biodiversity. In the coming years, India will face tremendous challenges in terms of sustainability issues like population growth, climate change and water pressures. Sustainability standards offer a roadmap for both sustainable production and consumption to help producers to improve their sustainability impact.
The success of 'Make in India' initiative would also depend upon reducing government interference and promoting self-regulation. Growth of VSS is an important step in the right direction but a lot yet remains to be done in India.
Global Organic Textile Standard (GOTS)
GOTS is recognised as the leading processing standard for textiles made from organic fibres worldwide. It defines high level environmental criteria along the entire supply chain of organic textiles and requires compliance with social criteria as well. Thus, all important factors viz, organic fibres, RSL, environment and social criteria are covered in GOTS.
GOTS has recently launched GOTS Monitor (Water/Energy) to help licensees monitor their water/energy consumption and compare it with global benchmarks for their fabric/shade/ machinery type etc. The Water/Energy Monitor also assesses cost of inefficiency in financial terms. This helps manufacturers analyse their present situation and acts as a positive motivation to upgrade their processes to match global benchmarks. If the results are used to upgrade the processes involved, this can also act as a tool to enhance competiveness in the international race. The Water/Energy Monitor is free to download and use for all GOTS licensees.
As per International Federation of Organic Agriculture Movements (IFOAM), "Organic Agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic Agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved."
Regulations for organic textiles
There are no uniform international legal standards for processing organic fibres. Though China, Brazil and Argentina introduced national organic textile standards at earlier stages, they did not gain any considerable impact or recognition. US has a legal standard for cotton fibres (NOP) but not for organic textiles. In May 2011, United State Department of Agriculture (USDA), which legally regulates the term 'organic' in US, endorsed GOTS as the standard of choice for sale of organic textiles. To sell textile products as organic in the US, it is also necessary that the fibres used should be certified as per NOP.
India introduced Indian Standard for Organic Textiles (ISOT) as a part of National Programme for Organic Production (NPOP) in November 2014. But after representations from industry and various stakeholders, the date of implementation as a mandatory legal requirement was postponed "till further notice". This means, that there will be no related implications for the manufacturers and exporters of GOTS certified and labelled textile products and they can continue their business without interruption.
GOTS has appreciated DGFT's decision to defer the date of implementation as industry needs time to align with any new procedures in business. GOTS is also open to discussion and cooperation with the Government of India. Since 2010, GOTS has taken a stand that the government should avoid additional compliance burden on Indian exporters and should rather cooperate with GOTS for standardisation of organic textiles being imported/ exported from India.
Challenges for organic textiles in India
- reduction of organic cotton by 22 per cent in 2013, challenging availability and compelling brands to consider other options
- organic cotton farmers choosing food crops over cotton
- shortage of non-GMO seeds
- competition from other cotton options
- integrity/contamination of organic cotton crop due to risk of contamination by GM crops
- stress on premium price
Business case for sustainability
By understanding the business case for sustainability, one can work towards reaching environmental, social and economical goals simultaneously. Environmental and social aspects need to be integrated in the principal strategy of the company to boost its economic success. In this value-based approach, we find three reasons for sustainability management:
- security in strategy and planning: long-term assurance of success in the times of big uncertainties.
- assure legitimacy and acceptance and avoid conflicts with stakeholders.
- realise and use differentiation and market potentials: keep your customers, win new customers or stay innovative as future assurance
WAY FORWARD: IMPLEMENTATION OF COMPLIANCE AND TRACEABILITY
Implementing chemical compliance
Steps to implement chemical compliance in a process house:
- understanding hazardous chemicals used in textiles at different stages
- management commitment to zero discharge of hazardous chemicals
- meticulous study of chemical inventory and discharge data
- implementation of chemical management systems in own unit and at suppliers as well.
- monitoring both input chemicals and raw materials for possible chemical risks
- audits and waste water sampling and its testing
- investment in training of employees and suppliers
- documentation of MSDS, RSLs and requesting relevant declarations from suppliers
- regular testing of incoming chemicals and residue testing of processed textiles
- implementation of a testing plan for finished articles at both sample development and mass production stages.
Steps to implement social compliance management at the workplace Management must have a policy for social accountability to ensure that the social criteria can be met. They must support the implementation and monitoring of the social criteria by:
- detailed study of the social compliance standard to be implemented (ILO, SA8000, WRAP, GOTS, etc) from the official standard document
- monitoring compliance with the social criteria and implementing necessary improvements at its facilities
- informing workers about the content of the minimum social criteria
- maintaining records of the name, age, working hours and the wages paid for each worker
- maintaining and providing appropriate safety equipment and materials to workers
- allowing the workers to nominate a representative for social accountability that is able to provide feedback to the management regarding implementation status of and compliance with social criteria
- recording and investigating complaints from workers or third parties related to the adherence to the social criteria and maintaining records about any necessary corrective measures arising from them
- automating critical social compliance process such as entry of internal audit/ assessment findings and reporting
- streamline end-to-end social compliance and audit processes for the entire production line and all departments
- seamlessly integrate internal systems to gather and consolidate all the information necessary to assess and ensure social compliance
- control and monitor end-to-end social compliance activities from a single, centralised framework
- align social compliance with your company's corporate vision to avoid resistance and overlaps
- efficiently track, investigate, and manage allegations of non-compliance with labour laws and other social compliance requirements
- stay updated on social compliance issues and trends in the industry
Some guidelines to implement traceability practices in a factory have been summarised below: Internal compliance: An internal compliance system would minimise any incidence of contamination.
Peer to peer internal inspections: A focus on comprehensive peer to peer internal inspections ensures unbiased monitoring as well as helps to conduct an exhaustive review of the compliance levels in the factory. That will also help to identify and rectify potential dropouts in the systems.
Worker education: Forming committees including both workers and staff to create extended awareness about risk of mixing and contamination can be highly useful.
Internal movement of product: The trolleys/containers used for internal transportation of textile products (yarn, fabric, garment, etc) must have an individual label mentioning details of the lot, shade, buyer, variety, organic, etc.
Colour codes: Furthermore, the trolleys/containers can be labelled in different colours to denote lot, quality, etc.
ERP solutions: An investment in enterprise resource planning is worthwhile for a medium to large company. The software will allow you to a unique tracing programme which captures lot numbers and consignment numbers at each stage to trace origins of a product. This will enable concrete traceability of not only organic but all qualities.
- create awareness programmes at different levels
- change the mind-set to ensure voluntary compliance
- training workshops should be arranged for all levels of workforce
- training should result in action plans
A manufacturer needs to focus to achieve the highest standards, in terms of both quality and compliance. This will help the product meet various international standards and also give entrepreneurs the satisfaction that they are doing the best they can for the safety of their workers, consumers and society at large. Additionally, this policy also protects the company from future claims from buyers for non-compliance. Products thus manufactured in India which meet the international quality and sustainability norms will not only increase revenues but also lead to further enhancement of both 'Incredible India' and 'Make in India'.