Responsibility in the Time of Crisis?

The global Covid-19 pandemic has had devastating impacts on societies and economies across the world. In Vietnam, although a health crisis was effectively prevented, the economic damage is enormous with key exporting industries – including footwear, garments, and electronics – among the hardest hit. One of the key reasons for the damage to these industries was the practices of several international brands and retailers that quickly cancelled or postponed orders upon the onset of the crisis – refusing, in many cases, to pay for products already finished. Taking advantage of their dominant power over local suppliers, these international brands shifted losses created by the pandemic to the most vulnerable sections of global supply chains: the assembly suppliers that operate on thin profit margins and their poorly paid workers. This study provides evidence of this trend by drawing from responses to online and phone-based surveys of 179 factories and 166 workers in the garment, footwear and electronics sectors in Vietnam. It not only reveals the impact of order cancellations on factories and workers in producing countries such as Vietnam during the pandemic, but also illustrates serious problems resulting from the existing power imbalances in global supply chains. Direct responsibilities of brands to factories and workers in producing countries are therefore identified as key to the sustainability of global supply chains during and beyond this time of crisis.