Forced Labor Prevention Is Everyone’s Business, Specially in Fashion

That question shattered the complacency of luxury fashion when, in 2025, Italian authorities placed LVMH’s Loro Piana under court administration after uncovering extreme labor exploitation in factories supplying its brand. Undocumented workers were found toiling 90-hour weeks for €4 an hour in unauthorized subcontractors, often living in dormitory-like conditions. 

The brand claimed no knowledge of these operations, pulling orders within 24 hours of learning the truth.

As the fifth fashion company placed under court administration over labor issues in Italy in only the past 18 months, it leaves us all with an uneasy question: if it’s not a brand’s responsibility to know, then whose is it? 

But there’s a twist. Though media coverage is keen to paint forced labor prevention in fashion supply chains as a story of bad actors, that’s simply not the case. It’s not untrue, it’s simply false. 

Rather, forced labor prevention is a story of invisibility. There exists a very real gap between ethical checks on paper and practice where labels like “Made in Italy” don’t guarantee clean supply chains. 

So if you take away about forced labor prevention in fashion is one thing, let it be this: visibility is a promise, but traceability is the practice. That’s what we’re going to explore in this article. 

Focusing on traceability as the critical missing link in forced labor prevention, we’ll unpack where visibility fails, what deeper-tier risk looks like, and how ESG managers can transform hidden threats into actionable insight, turning “compliance intent” into accountability in motion.

Why Forced Labor Is Still Embedded in Global Supply Chains

Let’s set the stage here: it’s not hard to convince ESG leaders that visibility — or a lack of it — is the source of many operational and strategic issues fashion brands face. They know it and they want to solve for it. 

That commitment and buy-in are essential. But what if you’re looking in the wrong place? 

See, most brands assume that oversight starts and ends at Tier 1 disclosure points. They think that making the invisible visible here is all it takes. But the truth is that Tier 1 suppliers — the factories or assemblers directly contracted by brands — are relatively easy to monitor. 

But there’s a saying about the dangers of assumptions. Here are a few more baseline beliefs we need to break — because their perpetuation creates a situation wherein ESG managers and leaders may be looking without actually finding: 

• Subcontracting masks accountability: Forced labor often exists in informal or unauthorized subcontracting arrangements. These vendors don’t appear on approved supplier lists and are rarely inspected. A 2022 report from Transparentem revealed that workers in India producing for global fashion brands were trafficked into debt bondage through third-party recruiters — something never captured in standard compliance audits.

• Audits are not a substitute for traceability: Factory audits often fail to capture the reality of working conditions. They can be pre-announced, coached, or bypassed entirely when production is offloaded to hidden subcontractors. The Clean Clothes Campaign reports that even compliant factories routinely hide informal labor. Without deep, real-time traceability across suppliers and sub-suppliers, audits become performative, not preventive.

• Limited data limits action: Many ESG teams still rely on spreadsheets, self-reporting, or outdated ERPs — none of which provide the granularity or timeliness needed to surface labor violations. KnowTheChain’s 2023 benchmark showed fewer than 1 in 10 apparel brands track risks beyond Tier 2. Without digitized, structured data that spans the full value chain, brands can’t detect red flags or intervene early.

Without understanding how and why each of the above issues lead to an embedding of forced labor in global supply chains, risk will continue to live in blind zones — cotton fields, dye houses, or small-scale subcontractors — where audits rarely reach. 

And as work gets subcontracted further down to Tier 2, Tier 3, or raw material processors, oversight plummets. This is where the vast majority of labor violations occur.

According to KnowTheChain’s 2023 Apparel & Footwear Benchmark Report, nearly 70% of major brands failed to show evidence that they map beyond Tier 1 — and only 6% had systems to track risks beyond Tier 2.

The consequences of Tier 2 and 3 “blindness” aren’t theoretical. Even as recently as 2024, workers continue to experience the fallout from “brands who prefer to leave their workers at the mercy of the corporate-led systems,” as Clean Clothes Campaign phrases it. This next example is safety-related but points to a pattern of behavior that disregards workers in favor of checking boxes.

“On February 8, 2024, 14 workers were injured in a gas pipeline explosion in the Crony Group, which includes Crony Apparels Limited — an Accord-covered facility producing for Accord-signatory Matalan and non-signatory Tom Tailor, and Crony Textile Unit instead: a sister company across the street, deeper in the supply chain and therefore not covered. This means that the facility was not checked by independent inspectors beforehand, that workers have no avenue to complain if they see safety violations and that the facility will not receive a post-incident inspection to indicate what needs to remediate to ensure that the results of the blast do not endanger more workers and that such an incident can never happen again. It is high time to bring facilities deeper in the supply chain under the purview of the Accord.” — as reported on by media monitoring Clean Clothes Campaign, “Keep All Workers Safe”.

Pulling back the curtain on the many faces worn by the supply chain visibility gaps that enable exploitation is only the first step. The real work begins with closing them. 

That means going beyond surface-level transparency and designing supply chains that are traceable by default — not just at the factory gate, but across every tier where risk lives. 

In the next section, we’ll explore how fashion brands shift from reactive oversight to proactive design, building the structural foundations to make forced labor prevention operational, scalable, and real.

Designing a Stronger Supply Chain From the Ground Up

Forced labor survives in the shadows, but it absolutely thrives in the gaps — as we’ve already seen. The deeper a supply chain runs, the more those gaps multiply: between sourcing and certification, between supplier claims and subcontractor realities, and between ethical commitments and on-the-ground conditions.

That’s where traceability comes in.

While traditional compliance tactics look backward and rely on snapshots, traceability is a forward-facing system. 

As a practice, making traceability an operational reality embedded in your brand’s ESG strategy is an initiative that connects people, products, and processes across tiers. Traceability allows ESG managers to monitor risk in motion, not just flag it in audits months after the fact.

The following sections discuss four practical strategies fashion brands use to build traceability into operations, from documentation and due diligence to proactive governance.

#1: Build a Due Diligence Strategy

Too many brands approach due diligence as a one-time compliance check. But in high-risk, low-visibility environments, due diligence must be active, ongoing, and tailored to real-world supply chain complexity. 

Here’s what ESG leaders should prioritize:

• Map your supply chain beyond Tier 1: Don’t stop at direct suppliers. Identify where labor-intensive activities like spinning, dyeing, or sewing happen. Use digital tools and supplier disclosure platforms to visualize deeper tiers.

• Use risk-based prioritization: Focus attention and resources where the risk is highest — by geography, commodity, or production stage. Leverage benchmarks like the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor and the ITUC Global Rights Index. 

• Require transparency as a contract condition: Include supplier transparency and traceability commitments in your onboarding process and purchasing agreements. This will make access to data non-negotiable, not optional.

• Audit your strategy — not just your suppliers: Periodically evaluate your due diligence framework itself: Are your questions outdated? Are you capturing relevant data on subcontractors, labor agents, and migrant worker protections?

#2: Use Documentation and Data to Strengthen Forced Labor Prevention Efforts

Remember: “seeing” the supply chain isn’t what’s at stake here — traceability is about proving it. And that’s what your customers (and compliance requirements) want.

So, let’s operationalize this, shall we?

• Collect consistent documentation from every tier: business licenses, proof of wages, employment contracts, and worker age verification. Nestlé uses a Responsible Sourcing Standard across all sourcing activities to ensure traceable documentation across supplier tiers.

• Digitize data collection and recordkeeping: Paper records are easily forged or lost. Digital records with time-stamped submissions improve auditability and allow real-time data sync with traceability platforms.

• Cross-verify documentation with third-party sources: Use geospatial tools, certifications, and worker interviews to check for inconsistencies between what’s reported and what’s true on the ground.

• Create centralized data hubs: Eliminate silos by integrating traceability data into shared dashboards accessible to sourcing, compliance, and ESG teams. Tools like Retraced are enabling exactly this kind of data alignment.

• Log deviations and red flags: Brands should log irregularities (e.g., mismatched factory addresses, incomplete contracts) to flag potential risk and trigger supplier follow-ups or remediation.

Moving from compliance “intent” to evidence-based action will require leading brands to document what is happening, where, and with whom, before then using that data to close risk gaps.

#3: Engage Suppliers as Partners, Not Just Checkpoints

Forced labor prevention fails when oversight becomes one-sided. Leading fashion brands are shifting from transactional compliance to collaborative engagement — building trust, sharing responsibility, and creating real incentives for better labor practices.

Here’s what they’re getting right:

• Co-developing a “Code of Conduct”: Instead of imposing static codes, forward-thinking brands work with suppliers to localize expectations and co-create ethical guidelines that reflect real conditions and cultural contexts. As Fair Trade USA posts, PACT’s collaboration with Fair Trade USA–certified factories, giving suppliers a voice in how working conditions improve, is a perfect example of this.

• Offering capacity-building support: Brands provide training, tools, and resources on responsible hiring, grievance mechanisms, and worker protections — especially in lower-tier facilities. Patagonia offers ongoing training and financial literacy education through its Fair Trade partnerships. 

• Tying performance to long-term contracts: Rewarding ethical performance with multi-year contracts builds accountability and reduces incentives to cut corners for short-term gain.

• Including suppliers in risk-mapping and due diligence:  Rather than mapping risk around suppliers, involve them directly in identifying hotspots, verifying subcontractors, and building more traceable workflows.

• Shift the language of enforcement: Move from punitive audits to proactive collaboration so that there are fewer “pass/fail” inspections and more joint roadmaps for remediation and progress tracking.

#4: Embedding Labor Rights in Sourcing, Not Just Audits

So far, we’ve covered the data, due diligence, and development of supplier relationship priorities. These bring us to our last stop: sourcing.

Nipping forced labor right in sourcing decisions means brands must embed worker protections upstream.

Here’s how future-focused fashion brands bake labor rights into their procurement strategy:

• Pre-screen sourcing regions for systemic risk:  Use due diligence tools (e.g., Open Supply Hub, ILO indicators, Verité data) to flag regions with high-risk recruitment practices or weak labor enforcement. Layer this analysis with production timelines to avoid last-minute sourcing in vulnerable regions under pressure.

• Make human rights a measurable matter with supplier scorecards: Move beyond price and delivery metrics — include living wages, grievance mechanisms, and worker voice in supplier evaluations. Kering’s Supplier Index, for example,integrates social compliance into procurement KPIs.

• Set ethical minimums for subcontracting: Build clauses into sourcing agreements that restrict or require approval of subcontractors, especially in deeper tiers.

• Ensure sourcing timelines don’t drive exploitation: Unrealistic lead times fuel unpaid overtime, recruitment debt, and third-party subcontracting — build sourcing calendars that respect production realities.

• Reward ethical suppliers with priority placement: Use preferred vendor lists and incentive-based pricing to elevate suppliers that consistently meet labor standards.

Moving Forward: The Future of Trade Depends on Ethical Production

Those who want to frame forced labor prevention as “lofty” or “idealistic” human rights issues simply aren’t looking closely enough — or thinking deeply enough. As we’ve explored here, on the ground, forced labor stems from a systemic supply chain failure. 

And, fortunately, we can use the supply chain to solve for it as well. 

The brands shaping the future of fashion know that prevention starts long before the product hits the shelf. They’re embedding accountability into sourcing, elevating supplier partnerships, and using data not just to monitor — but to act.