2014-04-11

Co.Exist

Can H&M Pave The Way To Fair Wages For Garment Factory Workers?

H&M staked itself out as a leader in ethical fast fashion after the deadly factory collapse in Bangladesh last year. Now its commitment to ensuring better worker conditions will be tested at three model factories.

In the aftermath of the Rana Plaza factory collapse that claimed the lives of 1,129 Bangladeshi garment workers, clothing brands faced more public pressure than ever to finally take responsibility for their supply chains. Now, nearly a year after one of the worst preventable industrial disasters of the 21st century, retail giant H&M has released more details on the plan it announced last year to bring fair living wages to workers involved in making its products by 2018.

It’s a bold and ambitious statement. H&M is the biggest buyer in Bangladesh, a country arguably attractive to the garment industry in the first place because of its cheap labor and few regulations. But H&M is now saying that fast fashion—selling fast and selling cheap—can mean ethical working conditions, too.

I spoke to H&M’s head of sustainability, Helena Helmersson, to understand a little bit more about the company’s commitment to such a major initiative, as well as an anti-slavery group and labor unions that remain cautiously optimistic.

How committed is H&M?

H&M didn’t source from Rana Plaza, but the company still found itself the target of a human rights campaign that placed a photo of its CEO next to a bloodied Rana Plaza survivor. The bad press also served as a reminder: Just three years prior, 21 Bangladeshi workers making H&M clothing died in a garment factory fire. When I asked Helmersson how the Rana Plaza collapse and the subsequent campaign affected H&M’s thinking, she said it was a tragedy, but also insisted that H&M had already prioritized fair wages and safe working conditions for a long time.

"We came to a point where we felt like there must be more to do because the progress was so slow," she says. "Which is why we decided to create more of a holistic wage roadmap and do something that can inspire the whole industry to set more measurable targets."

Rana Plaza likely had something to do with it. In March of 2013, before the disaster, Jyrki Raina, the general secretary for the IndustriALL Global Union, held a meeting in Geneva with 10 leading brands producing in Bangladesh, including Walmart, Marks and Spencer, and H&M.

"At that point what astonished me is that I felt no urgency and an amazing level of complacency," he says. "There had been too few dead bodies recently, and while the brands felt like there was a threat to their image, they seemed to be quite happy with their voluntary initiatives."

Helmersson, however, did live in Bangladesh between 2005 and 2007, so she says the fair wage issue was particularly close to her heart. But whether the plan was hatched as a result of outside pressure, internal direction, or a combination of both, a series of strategy meetings among production managers, CEO Karl-Johan Persson, and Helmersson after Rana Plaza added momentum to H&M’s response. In May, the company was the third to sign a legally binding accord that held them accountable for fire and safety inspections in Bangladesh. More than 150 brands would follow H&M's lead.

Making a model factory

In November, H&M announced the plan for its fair wage roadmap, starting with three pilot factories in Bangladesh and Cambodia from which H&M alone would source. (Multiple brands usually source from the same factories, but that also makes it more difficult to pinpoint responsibility on one brand to raise wages and better conditions.) And the new plan did contain some good ideas.

For one, H&M’s relationship with model factories would mean the company would theoretically gain better control of its subcontractors—second-tier factories and mills that factories often use in a crunch. The problem with some of these secondary workplaces is that they often use cheap labor that brands don’t have any direct contact with, or something called a sumangali scheme, in which mills lure women and children hoping to earn enough for a dowry, but pay them a fraction of what’s promised.

H&M’s new report pledges to bring 50% of its second-tier suppliers into its audit program, and to publish 100% of its first-tier factories to a public list. H&M has already revealed 95% of its factories—a big step for transparency—but internal audit programs often fall short of actual accountability.

"I think most of the ethical auditing that is done is done with the specific purpose of finding nothing," says Anti-Slavery International director Aidan McQuade. "The whole process is functionally worthless if your purpose is to remove exploitation. But it's functionally extremely useful if to say to a gullible public everything’s fine."

Ensuring that workers have freedom to associate with unions, McQuade says, would be a good place for H&M to start. And on that front, H&M actually takes a strong stance. Since 2008, H&M has worked with NGOs to train nearly 900,000 workers on their rights, and, according to Helmersson, encourage workers to negotiate their wages.

"H&M has said in public, also thanks to their Swedish position, they do believe in collective bargaining," Raina, the IndustriALL general secretary, says.

In its latest sustainability report, H&M also says it will pay factories more, lobby the Bangladeshi government to increase the minimum wage, and work with suppliers to reduce overtime. Critically, Helmersson adds, H&M is also researching ways to make sure that future wage increases can be incorporated into the company's business model. If this is true—that a company like H&M could stick around in Bangladesh as wages significantly increase—it would set a powerful example for the rest of the industry.

What’s a living wage?

After H&M came out with the initial roadmap, the Clean Clothes Campaign, an alliance of NGOs and labor unions, published a report that celebrated the statement, but criticized the company for refusing to set an actual benchmark on what a living wage was. The organization urged the company to abide by something called the Asia Floor Wage, which would guarantee workers $360.86 a month. Meanwhile, Bangladeshi officials recently raised the minimum wage from a paltry $38 to $68 a month.

"To me, [a benchmark] is a pretty outdated way of looking at wages," Helmersson said. "To us, the living wage level has to be decided by the workers. It’s about the workers’ demands. When we work in these three role model factories, what’s built in the structures is asking the workers what does their wage cover."

The fact that H&M is working with labor unions—and encouraging workers to demand their own wages—is an encouraging start. But it remains to be seen whether H&M can follow through on real, consistent, living wage increases as a company that produces so much, so fast, and so cheap. Some are skeptical that H&M could achieve real progress without upping their retail prices. But the model factories will prove the testing grounds.

Helmersson, however, doesn’t see H&M’s business model as a conflict with sustainability goals.

"When it comes to mass consumption, our vision is to make it possible for as many people around the world to buy our fashion and more sustainable fashion, and to make it attractive and available for as many people around the world," she says. "The prices we offer are something we’re proud of. But of course that comes with great responsibility."

[Image: H&M via Martin Good / Shutterstock]

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