1. Introduction
The global fashion industry’s complex production networks expose it to legal and ethical vulnerabilities, particularly concerning labor standards and compliance. Recent judicial proceedings reported by the media have highlighted these challenges in multiple jurisdictions. While these cases are sub judice and not subject to merit evaluation here, they serve as a catalyst for examining broader questions about how the law interacts with corporate practices. This article provides a systemic analysis of supply chain governance, compliance frameworks, and the role of law in fostering corporate accountability beyond litigation.
2. Supply Chains and Legal Challenges
Modern fashion supply chains are highly fragmented, involving numerous cross-border contractors and subcontractors. This fragmentation increases legal complexity and dilutes direct oversight by brand owners. Key areas of concern include labor law compliance, environmental regulation, and corporate liability for violations occurring at distant tiers of production. The conventional focus on formal contractual compliance often fails to detect manipulative practices that undermine workers’ rights.
2.1 Limits of External Controls
Even with external oversight—such as labor inspections, legal audits, or financial controls—companies may implement internal practices that evade detection. For instance, in some Italian contexts, reports indicate situations where employers formally paid workers their full wages but then required partial cash reimbursements, making the violations invisible to external monitoring. Similarly, workers may hold contracts that formally comply with labor regulations, but which stipulate a number of working hours far below those actually worked. In practice, employees often work significantly more hours than indicated on paper, without corresponding overtime compensation or proper contractual recognition. In some cases, workloads are so excessive that they seriously undermine the physical and mental health of workers. These practices illustrate not only the limitations of traditional control mechanisms but also the risks of superficial compliance when external evaluators rely solely on documentary evidence rather than on-site audits and observations.
Workers in such environments face increased vulnerability. Beyond the fear of direct retaliation, they often worry about losing their jobs if the company closes or reduces operations. The discrepancy between formal contracts and actual working conditions can further inhibit reporting. In some Italian industrial districts, reports indicate that workers who attempted to protest or assert their rights were occasionally subjected to physical intimidation or violence, further discouraging complaints and reinforcing a climate of fear. Effective compliance, therefore, requires multi-layered strategies, including secure and anonymous whistleblowing channels, systematic field audits, and comprehensive education on labor rights and reporting mechanisms. These measures are essential to ensure that formal legal compliance translates into genuine protection of workers’ rights, addressing not only procedural compliance but also the practical realities of workplace safety and worker empowerment.
2.2 Protection Programs and Incentives for Reporting
To address such vulnerabilities, some policy frameworks propose protection programs that combine legal safeguards with financial incentives for reporting abuses. Examples include temporary subsistence support for reporting workers, job protection guarantees, relocation assistance, and access to legal or social services in the worker’s language. These measures recognize that fear of retaliation and loss of livelihood significantly hinders disclosure and that systemic enforcement requires enabling workers to participate as informed and supported actors within the regulatory framework. Furthermore, in cases where subcontractors operate as sole-source suppliers, policy proposals often suggest strengthening the prime contractor’s or client’s responsibility to ensure that workers receive full and fair remuneration, effectively linking the client’s liability to the actual payment owed, rather than allowing gaps or delays to be masked by intermediary arrangements. This approach aims to reduce the circumvention of labor standards and reinforce accountability throughout the supply chain.
3. Corporate Accountability Beyond Litigation
Increasingly, corporate accountability encompasses proactive measures that anticipate and prevent harm rather than react to the outcome of legal disputes. Internal monitoring, codes of conduct, CSR programs, and the adoption of environmental, social, and governance (ESG) criteria integrate ethical standards into corporate strategy. For example, some fashion houses regularly conduct third-party audits of their suppliers, evaluating working conditions, health and safety compliance, and environmental impact. Others implement mandatory training programs for suppliers, covering topics such as workers’ rights, anti-discrimination practices, and sustainable sourcing. Some brands have introduced digital traceability systems to track the production of garments from raw materials to finished products, allowing real-time identification of potential risks and irregularities.
Furthermore, mandatory due diligence regimes in several jurisdictions require companies to systematically identify, assess, and mitigate potential adverse impacts, including human rights violations and environmental damage. In practice, this may involve corrective action plans with specific deadlines, contractual obligations for suppliers, and monitoring mechanisms that integrate data analysis and field inspections. Judicial proceedings, even if pending, can draw attention to structural weaknesses, prompting companies to strengthen their compliance culture, enhance transparency, and commit to continuous improvement. In this way, litigation—even if unresolved—serves not only as a warning but also as a catalyst for embedding proactive accountability measures across the corporate ecosystem.
4. Judicial Scrutiny as a Learning Moment
Judicial review uncovers gaps in legal frameworks, such as the adequacy of protections in transnational contexts, disparities in enforcement across jurisdictions, and challenges in assigning liability for infringements that occur in complex supply chains. In many cases, courts effectively intervene to fill gaps that supervisory authorities are unable to address, often due to resource constraints, limited staffing, or structural deficiencies within regulatory agencies. Through judicial review, legal ambiguities are clarified, enforcement standards are interpreted in practice, and systemic weaknesses are highlighted. Rather than adjudicating individual guilt in this analysis, judicial oversight is framed here as an opportunity for lawmakers, regulators, and corporate actors to refine accountability and compliance models. By identifying recurring patterns of noncompliance and interpreting regulatory obligations, courts contribute to strengthening both legal and ethical standards, encouraging proactive corporate behavior and pushing authorities to enhance monitoring and enforcement frameworks. In this way, judicial proceedings serve not only as a mechanism for dispute resolution but also as a structural driver for institutional and corporate improvement, particularly in contexts where regulatory bodies face limitations in resources or operational capacity.
5. Media, Public Perception, and Legal Neutrality
Media coverage plays an important role in shaping public understanding of corporate conduct. While transparency can drive reforms, there is also a significant risk of reputational damage arising from premature or incomplete judgments, particularly in complex cases where facts are not fully established. In highly publicized industries such as luxury fashion, the stakes are especially high: brand image, consumer trust, and investor confidence can be affected long before judicial proceedings reach a conclusion. The complexity of global supply chains, multiple jurisdictions, and layered corporate structures makes it easy for commentators, journalists, or the public to jump to conclusions that may later prove inaccurate or incomplete. Maintaining neutrality in academic and professional analysis requires careful use of terminology—describing cases as alleged, reported, or under investigation—and respect for the principle of presumption of innocence. Such rigor helps ensure that reflection on systemic challenges and corporate practices is objective and evidence-based, while mitigating the risk of reputational harm unrelated to effective legal findings.
6. Digital Tools and NGO Support for Vulnerable Workers
In recognition of the vulnerabilities faced by migrant and low-wage workers, NGOs and institutional initiatives have developed digital tools that provide multilingual information on labor rights and reporting mechanisms. For example, inter-institutional helpdesks offer guidance via phone, messaging apps, or online platforms in workers’ native languages. Similarly, mobile applications enable workers to document irregularities, access legal advice, and connect to support services. While these tools help reduce informational asymmetries and lower barriers to reporting, they are no substitute for on-the-ground law enforcement and protection, which remain essential for effective rights protection.
7. Comparative and International Perspectives
Corporate accountability) norms vary globally, reflecting differing legal traditions, enforcement capacities, and socio-economic priorities. In the European Union, the recent adoption of the Corporate Sustainability Due Diligence Directive (CSDDD) establishes broad obligations for companies to integrate human rights and environmental risk assessment into their corporate governance and supply chain management. This Directive requires companies above certain thresholds to identify, prevent, mitigate, and account for adverse impacts on their operations and those of their business partners, and to integrate these processes into their risk management systems.
National implementation of the CSDDD is planned for the coming years, with a gradual application to large enterprises starting in 2027 for companies with more than 5,000 employees and substantial turnover, followed by subsequent phases in 2028 and 2029 based on the company’s size and revenue. Before these dates, Member States must transpose the directive into national law by 26 July 2026.
In Italy, although the European CSDDD has been adopted at the EU level, it has not yet been fully transposed into national law. Italian authorities are currently working to implement the directive at the national level, reflecting ongoing efforts to align national rules with EU-wide due diligence obligations. This situation highlights that — while European norms are increasingly shaping corporate expectations and responsibilities — Italian corporate responsibility law continues to rely on existing frameworks, such as non-financial reporting requirements and administrative liability under Legislative Decree No. 231/2001. Specifically, Legislative Decree 231/2001 establishes the administrative liability of legal entities — a form of corporate criminal liability — for certain offences committed in their interest or to their advantage, including labor exploitation, thus encouraging the adoption of organizational models aimed at preventing unlawful conduct.
Furthermore, Italian authorities are actively pursuing initiatives that combine regulatory oversight with industry cooperation: prosecutors and industry bodies have collaborated on voluntary transparency and supply chain monitoring schemes, and government proposals have been put forward to introduce legal certification mechanisms for fashion companies to demonstrate compliance with labor laws and safeguard the reputation of “Made in Italy.” In many producing countries, enforcement capacity and regulatory frameworks vary significantly. Some jurisdictions lack the resources or institutional infrastructure necessary to effectively monitor complex supply chains, resulting in regulatory asymmetries that multinationals must manage.
In many producing countries, enforcement capacity and regulatory frameworks vary significantly. Some jurisdictions lack the resources or institutional infrastructure to effectively monitor complex supply chains, resulting in enforcement asymmetries that multinational companies must manage. These disparities underscore the value of comparative and transnational frameworks — including international soft law instruments such as the UN Guiding Principles on Business and Human Rights and OECD guidelines — which help harmonize expectations and offer guidance for voluntary compliance initiatives beyond national borders. These frameworks support companies in managing legal and ethical risks internationally, complementing national regulation and promoting consistent global standards.
8. Conclusion
This article used judicial proceedings reported in the press as a catalyst for a broader reflection on systemic governance and accountability within the fashion industry. It emphasizes that corporate responsibility cannot be reduced to legal avoidance; proactive frameworks such as due diligence, ESG integration, and worker-support mechanisms are essential for sustainable and equitable industrial practices. The current judicial review, though unresolved, highlights the complexities of fashion law globally and the potential for legal innovation. Scholars, policymakers, and industry stakeholders can leverage this moment to strengthen governance, expand protections, and align legal frameworks with evolving social expectations.
References
European Union. (2024). Directive (EU) 2024/1760 of the European Parliament and of the Council of 24 April 2024 on corporate sustainability due diligence. Official Journal of the European Union. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32024L1760
Ethical Trading Initiative. (2023). Just Good Work App develops new interface for workers of all literacy levels. https://www.ethicaltrade.org/resources/blog/just-good-work-app-develops-new-interface-workers-all-literacy-levels
OECD. (2017). OECD Guidelines for Multinational Enterprises. OECD Publishing. https://www.oecd.org/corporate/mne/
Ruggie, J. G. (2013). Just Business: Multinational Corporations and Human Rights. W. W. Norton & Company.
Reuters. (2025, May 26). Italy’s fashion brands sign accord to fight worker exploitation. https://www.reuters.com/sustainability/italys-fashion-brands-sign-accord-fight-worker-exploitation-2025-05-26
Reuters. (2025, July 22). Italy moves to safeguard fashion sector reputation after labour scandals. https://www.reuters.com/en/italy-moves-safeguard-fashion-sector-reputation-after-labour-scandals-2025-07-22
