Dear Friends,

The September MSN Update includes calls for just compensation for garment workers who have suffered the impacts of US tariffs, stronger labour rights protections in the Canada-United States-Mexico trade agreement, and enforceable mechanisms for workers seeking remedy for harms caused by Canadian companies abroad.

The Update also profiles recent victories in which apparel workers in Guatemala achieved significant remediation, though workers are still owed social security benefits in one of the cases.

We also highlight recent studies that challenge the legitimacy and effectiveness of private sector social auditing initiatives in identifying and remediating violations of workers’ rights, as well as environmental standards.

The Update concludes with a report on the closure of the Americas Group, a multi-stakeholder forum in which MSN played a leading role for the past two decades.

Lynda Yanz and the MSN team

With billions of dollars in tariff refunds now flowing to major apparel brands, the Clean Clothes Campaign (CCC), in which MSN is an active member, is calling on those brands to share their tariff refunds with the workers and factories in their supply chain that were forced to absorb tariff-related costs. In response to US tariff uncertainty, many brands put existing orders on hold and asked suppliers for price discounts. As a result, thousands of workers lost their jobs, many without any severance pay or compensation.

While the US media focuses on brands’ responsibility to compensate US consumers, suppliers and workers should also be compensated.

Despite the recent breakdown in trade negotiations between Canada and the United States, unions and labour rights organizations are continuing to lobby for stronger labour rights provisions in any renegotiated trinational trade agreement. On September 2, independent unions and labour rights organizations in Canada, Mexico and the US released a joint statement specifically calling for significant improvements in the Rapid Response Labour Mechanism (RRLM) of the existing trade agreement.

While recognizing that the RRLM has provided Mexican workers a channel to file complaints and achieve some corrective action when their associational rights are violated, the statement points to the need to broaden its scope to include all ILO fundamental rights at work and to apply to all export sectors, including agriculture, digital platforms, energy and migrant workers, and to be applicable to the United States and Canada, as well as Mexico.

As a member of the Canadian Network on Corporate Accountability (CNCA), MSN joins other member organizations in denouncing the Canadian government’s elimination of the CORE in June 2026. The CNCA had long called for the strengthening of the office, which still did not have investigatory powers, independence, or the ability to compel witnesses, as promised when it was created. The decision to eliminate the CORE completely, however, leaves communities and workers alleging abuses by Canadian companies abroad at risk for greater harm.

With a reversal of that decision and a strengthening of its mandate, the CORE could play an important role in remedying human rights violations by Canadian companies.

Following the release of investigative reports and significant engagement by the Worker Rights Consortium (WRC), local unions and labour rights organizations, former workers at two different factories in Guatemala have achieved at least partial remedy for serious labour rights violations.

The KOA Modas factory closed in February 2025, owing the 750 laid off workers an estimated US$5.5 million in severance and back pay, as well as an additional US$6 million in social security contributions covering health care and retirement benefits. In what the WRC described as the largest single factory back pay settlement for garment workers ever recorded in Central America, the former workers have received 95% of the legally owed back pay and severance through a contribution from Target’s vendor, Korean-owned manufacturer SAE-A Trading.

However, the former KOA Modas workers are still owed US$6 million in stolen social security contributions and pressure is now focused on Target, the factory’s main buyer that had been sourcing from the factory since 2015. Partners for Dignity and Rights is publicly calling on Target to take responsibility for what workers are owed.

In a separate case, also in Guatemala, the WRC informed its member universities that it had successfully engaged with Fanatics and its Nike-branded collegiate apparel supplier, Hoosier Manufacturing, to win back pay for 367 laid off workers. The agreement also includes an offer of employment in comparable positions to 66 of those workers who had challenged their dismissal in the courts. This case represents another significant victory for workers and labour rights advocates in a country where remediation is often difficult to achieve.

Three recent reports highlight yet again how social audits are failing to detect, much less ensure remedy for, labour rights abuses and environmental harm in global supply chains. The three reports, covering Pakistan, Bangladesh and China, identify numerous systemic issues with the multi-billion-dollar social auditing industry, such as insufficient engagement with workers, employer intimidation of workers, differences between wages reported by employers and the sub-minimum wages reported by workers, as well as environmental hazards and deadly safety incidents in factories that had been recently audited and/or certified.

While social audits fail workers, they allow international brands to claim compliance with the human rights and environmental norms in their codes of conduct. Brands should not be allowed to avoid responsibility and hide behind social audits while workers in their supply chains are harmed.

In September 2025, the Coordinating Committee of the Americas Group (AG) announced its decision to close the multi-stakeholder forum that had promoted and facilitated dialogue between international apparel brands and manufacturers and national trade union and women’s organizations for the past 20 years. The work of the AG’s Mexico and Central America committees was completed in July 2026.

For the last two decades, MSN acted as the Secretariat of the Americas Group, playing a leading role in planning, organizing and facilitating the labour-company dialogue sessions, as well as the development of resource materials, including Guidance Tools for Employers on Freedom of Association in Mexico and El Salvador.

The decision to close the AG was made because of the decreased participation and weakened commitment of a number of participating brands to take action to resolve issues identified in dialogue sessions in the post-COVID period, and the resulting increased burden placed on MSN and a small number of active brands.

Annual reports of the Americas Group, as well as publications of both the Mexico and Central America committees, are available on our website at the link below.

Photo Credits, in order of appearance: Factory worker in India (EqualStock, Pexels); Brands receiving tariff refunds; Signatories of the trinational alliance statement; CNCA model legislation (CNCA); Former workers from KOA Modas factory (WRC); Factory fire in China (Partners for Dignity and Rights); Americas Group annual report.  

The Maquila Solidarity Network (MSN) is a labour and women's rights organization that supports the efforts of workers in global supply chains to win improved wages and working conditions. Please consider supporting MSN's important work by making an online contribution or by sending a cheque to the address below.