The Role of the Brands’ Home Governments
The United States, European Union, Canada, and Japan are the top four markets for garments and textiles from Cambodia, but they are also where major international apparel brands are headquartered. The 2011 Maastricht Principles on Extraterritorial Obligations of States in the Area of Economic, Social, and Cultural Rights, while non-binding, provide some guidance on state responsibility to regulate the global operations of home companies within their jurisdictions.
Extraterritorial obligations are defined as “acts or omissions” by states “within or beyond its territory,” that impact the enjoyment of human rights outside the state’s territory. States should regulate those “transnational corporations or other business enterprises” that they “are in a position to regulate” in accordance with principle 25 of the Maastricht Principles in order to ensure that they do not nullify or impair the enjoyment of economic, social, and cultural rights. A state is said to be in a position to regulate a transnational corporation “where the corporation or its parent or controlling company, has its centre of activity, is registered or domiciled, or has its place of business or substantial business activities, in the State concerned.” Regulation can take different forms including administrative, legislative, investigative, and judicial.
The US, EU, Canada, and Japan have not introduced regulations to provide incentives or require international apparel brands domiciled in their territories to make non-financial, human-rights related disclosures that would facilitate labor rights compliance throughout the supply chain. Such measures should include requiring international apparel brands to disclose the names of their suppliers and subcontractors.
In 2014, the EU revised its rules on financial statements by adopting a directive on “disclosure of non-financial and diversity information by certain large undertakings and groups” requiring some big EU companies to annually report on their respect for human rights, social and employee-related matters, anticorruption efforts, and environmental concerns. The directive should be adopted by EU-member states within two years.