Poor treatment of workers, poverty wages and unsafe working conditions, for the sake of affordable clothing or company profits, have plagued international headlines recently. The South African retail clothing industry has had many challenges too, related to tough international competitors with unfair tax advantages. Sadly, despite favourable legislation for employees stemming from an unfortunate history, deplorable working conditions for garment workers have been exposed.
In early February 2026, a joint inter-departmental inspection of several clothing factories in Newcastle, KwaZulu-Natal, laid bare a disturbing reality lurking within South Africa’s retail supply chains. Parliament’s Employment and Labour Portfolio Committee, alongside the Department of Employment and Labour, Department of Home Affairs, and the South African Police Service, uncovered what officials described as “exploitative factories where basic labour laws and other laws of the country are disregarded with impunity” and which represent “a ‘fatal’ hazard waiting to happen.”
The findings were stark: workers allegedly forced to labour for up to 24 hours without breaks, paid as little as ZAR350 per week in cash, far below the National Minimum Wage. Thirty-four (34) undocumented foreign nationals were found working in “health-hazardous working and living conditions”, and almost all factories were non-compliant with the Occupational Health and Safety Act (“OHSA”). The Parliamentary Portfolio Committee has vowed to summon the prominent retailers involved, to appear before Parliament “for supporting manufacturers who are breaking the country’s laws.”
The retailers exposed have noted measures implemented to prevent exploitative practices by their suppliers. However, contractual requirements and periodic audits, alone, are insufficient safeguards against serious labour and human rights violations. Exposure extends beyond reputational harm. Employers were arrested during the inspection for contravening immigration laws, and contravention notices were issued for non-compliance with the National Minimum Wage Act.
Retailers cannot simply disclaim responsibility for conditions at manufacturing sites producing their goods. A “supply chain,” broadly defined, encompasses the entire network of suppliers who directly or indirectly bring goods or services to the market. The Newcastle incident illustrates precisely what robust supply chain due diligence is designed to prevent. Avoidance of liability due to alleged ignorance of the failure by suppliers to comply with applicable laws.
To appreciate why such violations persist, one must first understand the nature of fashion supply chains. The sector is one of the most interconnected in the global economy. Natural fibres are sourced from agriculture; synthetic materials have linkages to the chemical industry; downstream activities include warehousing, logistics and distribution; and online retail is supported by telecommunications. This intricate web spans continents and interweaves countless industries, making oversight challenging and exploitation easy to conceal. Each link in this chain presents opportunities for exploitation, particularly where enforcement is weak.
The international trend is unmistakably toward mandatory due diligence, with the European Union’s (“EU”) Corporate Sustainability Due Diligence Directive (“EU CSDDD”) and Germany’s Supply Chain Due Diligence Act (“LkSG”) now operational. The EU CSDDD requires companies above certain thresholds to identify human rights and environmental risks in their value chains, take preventative and remedial measures, and report on their efforts. The LkSG similarly requires covered companies to implement risk management systems, conduct regular risk analyses, take remedial action where violations are identified, establish accessible complaints procedures, and publish annual reports on fulfilment of due diligence obligations.
Whilst South Africa has not yet enacted comprehensive supply chain due diligence legislation, the JSE Sustainability Disclosure Guidance (the “Guidance”) provides a framework that listed companies should heed. The Guidance includes specific supply chain metrics requiring organisations to report on “mechanisms aimed at enhancing management of social issues (codes, policies, prevention, and treatment)” across their value chains, and to provide “an explanation of suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour.” The Guidance explicitly recognises that “all organisations have the responsibility to respect human rights, including within their sphere of influence” and that “delivering on this responsibility requires that organisations exercise due diligence to identify, prevent and address any actual or potential human rights impacts resulting from their activities or those with which they have relationships”. The Newcastle scandal demonstrates the pressing need for retailers, whether listed or not, to voluntarily adopt these best practices.
For South African businesses with ambitions beyond domestic markets, the international regulatory developments mentioned, add further impetus for change. South African companies who export to partners in the EU will be directly affected by these developments, as these partners will require information for their reporting obligations and will need to undertake due diligence of their supply chains.
The complexity of the supply chain, and the corresponding weakness in enforcement, makes risk-based due diligence indispensable. Conducting due diligence, which could include site inspections, on third parties including suppliers and in certain circumstances, other parties involved in the value chain, is crucial in managing sustainability and other compliance risks. Companies should consider:
- whether sufficient information is available to verify the identity of the third party and its directors and beneficial owners;
- whether due diligence enquiries have included a review of international compliance records and a media review to identify any adverse reporting; and critically,
- whether the supplier has policies in place to prevent child labour, forced labour and exploitation.
The Newcastle scandal is not an isolated incident but a symptom of systemic weakness within the retail industry. Paper policies and periodic audits are manifestly inadequate. What is required is a systematic, risk-based approach: meaningful visibility beyond tier-one suppliers, unannounced inspections, direct worker engagement and robust grievance mechanisms. Retailers must move beyond reactive crisis management toward proactive supply chain governance. The reputational damage from association with exploitative practices is severe, but the human cost to vulnerable workers is immeasurably greater. This incident must serve as a catalyst for change. No garment should come at the cost of human dignity.
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Read the original publication at ENS
