This is the third edition of the Australian Fashion Report. It is being launched on the eve of the third anniversary of the Rana Plaza factory collapse in Bangladesh, a tragedy which cut short the lives of 1,136 garment workers. When the factory came down, it simultaneously catapulted the poor and unsafe working conditions of the apparel industry to front page news and to the front of our minds.

The Rana Plaza shocked the collective conscience of consumers and decision makers across the world, helping to accelerate efforts to uphold the rights of workers throughout the entire apparel industry supply chain. Three years on however, the need remains pressing. There are presently 14.2 million people in forced labour exploitation and 168 million child labourers scattered across the global economy. Many of this number are forced to work in the farms and factories that feed the apparel industry. For millions of others working in the industry, wages remain so low that they are unable to lift themselves and their families out of poverty.

The Australian Fashion Report sheds light on what the industry and individual companies are doing to address forced labour, child labour and exploitation. Each report - since the launch of the first in 2013 - has tracked the progress within the industry. The change since 2013 has been significant. In this edition we have assessed 87 companies, awarding each a grade from A to F based on the strength of their labour rights management systems to mitigate the risk of exploitation in their supply chain. This report marks a significant expansion of the work of previous reports adding 50% more companies, updating the research and adopting a new and enhanced rating tool. 78% of the companies assessed directly engaged in the research process - up from 54% in the first report.

Fairtrade companies, though still relatively niche, remain the standout when it comes to strong labour rights management. Etiko and Audrey Blue (inc. Mighty Good Undies) both received A+ grades. The next best performer was one of the world’s biggest fashion retailers, Inditex (Zara), which received an A grade. Australian brands Cotton On Group, APG & Co (Saba, Sportscraft, Willow, JAG), Country Road Group and Pacific Brands all received a commendable B+.

The past 12 months have seen some substantial improvements in reported company performance, with APG & Co, Industrie and David Jones being the most significant. APG & Co demonstrated that it had substantially traced back to the inputs stage of its supply chain (it knew who its fabric suppliers were), and that it sourced from predominantly unionised factories for its final stage of manufacturing. Industrie demonstrated that it had significant traceability back to its input suppliers, and that it had begun work to understand what percentage of its factories were currently paying a living wage. David Jones results reflect a strong uptick in investments to improve labour rights, significantly improving traceability and the quality of its auditing and supplier relationships.

These three companies are reflective of one of the most welcome trends in the industry - the improved company knowledge of suppliers. Knowing suppliers is critical to a strong labour rights management system. If companies don’t know or don’t care who their suppliers are, then they cannot ensure that workers are not being exploited. In 2013, we found that only half of companies had complete knowledge of who their suppliers were at the final stage of production (the manufacturing or ‘cut, make and trim’ suppliers). This has since increased to 70%. When we focus in on those companies that have been assessed across all three reports, the proportion rises to an impressive 94%.

It is clear that the industry is also increasing its efforts to know suppliers deeper into the supply chain. In 2013, 41% of companies had engaged in some effort to know their input suppliers (e.g. where their fabric is produced), this has now increased to 79%.

However, there is still much to be done. Only 31% of companies knew more than 75% of their input suppliers, and at the next tier down - at the raw materials level - only 5% of companies knew who all of their suppliers were.

Continuing to improve traceability will remain one of the most important challenges for the industry. While inputs and raw materials sit outside the purview of companies, the worst forms of worker rights abuse (including forced and child labour) will continue to remain prevalent in these parts of the supply chain.