In its Human Rights Policy1, Gildan commits to upholding and respecting human rights as established in the UN Guiding Principles on Business and Human Rights (UNGPs) and periodically conducting human rights materiality assessments. Gildan’s Social and Sustainable Compliance Guidebook2 describes its human rights assessment processes, and Gildan states deeper due diligence is conducted where required. Despite Gildan’s human rights commitments, workers in Honduras have experienced adverse human rights impacts.

Factory Closure and Occupational Injuries
In June 2023, Gildan announced the closure of its Honduras San Miguel clothing factory, leaving 2,700 primarily women jobless. Months before, Honduras’ Supreme Court of Justice ruled Gildan violated workers’ human and labour rights and unjustly dismissed workers.[3] Instead of reinstating workers under better working conditions as ordered, Gildan shuttered the entire factory citing fortuitous event and force majeure.[4] In 2018 Gildan offered to relocate all affected employees after its Star facility (El Progreso) was closed.[5] No such offers were made to San Miguel workers.

According to the Honduran Social Security Institution at least 300 former San Miguel workers were assessed with occupational injuries. An NGO reports supporting 209 additional cases. Injury rates may be underreported, and many cannot access social security services and disability pensions due to the manner the facility was shuttered. Workers claim occupational injuries are caused by long work hours, embedded overtime that is not voluntary in practice, and high production goals. Gildan claims compliance with local law. However, a fundamental premise of the UNGPs is seeking compliance with standards beyond domestic law.[6]

Safety and Security
A Globe and Mail report highlights the issue of gender-based violence in Honduras.[7] Honduras has Latin America's highest femicide rate[8], with a woman killed every 23 hours.[9] Gildan's shift scheduling requires employees to travel at night, raising safety concerns among female workers, including reports of sexual abuse. In jurisdictions with challenging security situations, an employer’s responsibility extends beyond the workplace to employee transportation, especially where security is an issue.

As per the UNGPs and ILO, Gildan’s responsibility is clear given transportation is provided as part of the work arrangement.[10,11] All the above issues raise concerns about Gildan’s risk oversight and expose our company to legal, financial, and reputational risk.

Management Concerns
Shareholders’ concerns for the human rights of Gildan’s employees are exacerbated by the Board’s recent revelations about Gildan’s former CEO, specifically that he “gradually became more disengaged,” had an unstructured management style and never visited Gildan’s new manufacturing plant in Bangladesh.[12] These revelations undermine investor confidence in
Gildan’s assessment and mitigation of human rights risks.

1 https://gildancorp.com/media/uploads/policies/bgildans_global_human_rights_policy.pdf
2 https://gildancorp.com/media/uploads/policies/bgildans_social_and_sustainable_compliance_guidebook.pdf
3 https://investments.bcgeu.ca/supreme_court_ruling
4https://assets.nationbuilder.com/bcgeu/pages/896/attachments/original/1706815599/Gildan_termination_letter
_SanMiguel_worker1.pdf?1706815599
5 https://www.businesshumanrights.
org/documents/3649/Response_to_Business_and_Human_Rights_Centre_Mar2018_ENG.pdf
6 https://www.business-humanrights.org/en/big-issues/un-guiding-principles-on-business-human-rights/guidanceimplementation/
7 https://www.theglobeandmail.com/world/article-women-of-honduras-find-little-refuge-and-even-less-justice-ina-
surge/#:~:text=Honduras%20has%20the%20highest%20rates,a%20kitchen%20for%20preparing%20meals
8 https://oig.cepal.org/en/indicators/femicide-or-feminicide
9 https://derechosdelamujer.org/comunicado-honduras-el-pais-mas-peligroso-para-ser-mujer-en-america-latina/
10 https://gildancorp.com/media/uploads/sustainability_reports/bgildans_2022_esg_report.pdf
11https://ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:55:0::NO::P55_TYPE,P55_LANG,P55_DOCUMENT,P55_NODE:
SUP,en,P155,/Document
12 https://gildancorp.com/en/media/news/open-letters-to-shareholders/