Sri Lankan Apparel Manufacturers Make Traceability the Norm

March 10, 2024

Look out, South Asia – Sri Lanka’s apparel industry isn’t willing to disappear without a trace.

The country’s apparel manufacturers have teamed up to proactively embrace the onslaught of legislation changes that could begin affecting the fashion and apparel industries in the coming years.

Sri Lanka’s manufacturers have linked with Global Language of Business (GS1), the Asian Development Bank (ADB) and International Financial Reporting Standards (IFRS) to usher in an era focused on transparency and traceability.

The entities announced that, going forward, all pieces of apparel coming out of Sri Lanka will have a QR code tag affixed to them. Scanning the QR code will show stakeholders information about the brand, the materials used for the product, care instructions, guidelines for end of life, supply chain traceability and more.

Nick Allison, general manager government of GS1 New Zealand, explained that the new QR code tags will be accessible to consumers and worthwhile for stakeholders who need access to nitty-gritty details.

“QR codes powered by GS1 will appear familiar to consumers—they look just like standard QR Codes, but they also carry a barcode number (GTIN) and can do many more things than usual QR codes. Think of it as a supercharged QR code opening the door to dynamic data that can be updated on every aspect of an apparel item,” Allison said. “In the Sri Lanka project, GS1 is helping industry digitally share the likely ESG information requirements so that export market access is facilitated.”

According to the Joint Apparel Association Forum Sri Lanka, in 2023, the country exported just over $4.5 billion in apparel products to global markets, which was down over $1 billion from 2022’s record-high global export total of nearly $5.6 billion.

Though those figures lag behind the likes of China, Vietnam and Bangladesh, the Ceylon Chamber of Commerce released data in February that 39 percent of Sri Lankan exporters expect to see moderate growth in the country’s economy in 2024.

Some fashion brands, like Mara Hoffman and Coach, have already introduced digital passport-style tags on some of their items and product lines. But global adoption has not yet occurred.

External legislative considerations

Sri Lanka’s legislative policies did not dictate this move.

The country may be putting itself ahead of competing apparel exporters in South Asia as existing and pending regulations in the United States, United Kingdom and European Union indicate a concerted effort to dictate stronger supply chain transparency.

“Being ahead of trends and requirements, and having the digital knowhow, will help the industry expand its attractiveness to more global brands, many of which already see Sri Lanka as a choice location for manufacturing,” Allison said.

Take for example, the U.S.’ Uyghur Forced Labor Prevention Act (UFLPA), which bars any goods made or sourced, wholly or in part, in China’s Xinjiang Uyghur Autonomous Region (XUAR). Since that regulation took hold, companies have scrambled to prove their supply chains are compliant with the UFLPA, in turn opening up broader conversations about the importance and relevance of supply chain traceability.

In the UK, the government has required companies to put forth an annual statement detailing the ways in which they have worked to ensure forced labor is absent from their supply chains under the Modern Slavery Act.

Meanwhile, aggression rages between European countries trying to secure final approval for the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which France, Germany and Italy further muddied this week by voting against the proposed legislation.

If EU countries’ leaders can come to a compromise, the regulation would mandate that companies in EU member states be held legally accountable for adverse environmental and human rights impacts coming from their respective supply chains.

The myriad of regulations coming swiftly toward the apparel industry could make Sri Lanka’s new initiative valuable to the Global North, especially as iteration of sustainability legislation continues in some countries—and begins in others.

“Being up to speed with the requirements of the regulations positions the industry to compete globally and demonstrate its successful investment in progressing sustainability,” Allison said.

The ADB and IFRS did not return Sourcing Journal’s requests for further comment on their collaboration.