H&M holds fair wage summit after criticism of supply chain pay policies

Fashion giant H&M has today (11 December) held a summit to determine how best to ensure all supply chain workers receive a "fair" living wage, following campaigner accusations that it had failed to pay some garment workers enough to keep them above the poverty line.

The summit, which was held at a converted garment factory in Phnom Penh, Cambodia, was attended by representatives from other fashion retailers as well as NGOs, supplier factories and investment firms.

Campaigners, trade unionists and academics were also present for the discussion, which explored the key challenges facing fashion brands seeking to meet worker needs and eliminate human rights breaches from their global supply chains.

During the discussion, H&M also unveiled an independent review of its roadmap for wages, which includes a headline goal of ensuring 100% of its supplier factories and farms meet its “fair living wage” standards.

Conducted by the Ethical Trading Initiative (ETI), the independent review of the roadmap concludes that H&M’s strategy is “broadly the right one”, noting that it “contains some strong elements that seek to address the long-term, systemic root causes of low wages”.

However, the review additionally states that wage growth among garment workers has “remained slow” and urges H&M to do more to ensure these employees have access to their “basic human rights”.

Specifically, it recommends that the company develops a “complete and consistent” definition of the term ‘fair living wage’, improves the basic rate of pay for all garment workers and collaborates with other fashion brands to share best-practice.

Responding to the report, H&M Group’s global sustainability manager Jenny Fagerlin said the company’s commitment to ensuring all workers receive a fair wage was “stronger than ever”.

“What we have learnt from our experiences, we will bring with us in our future work,” Fagerlin wrote in a blog post.

“Together with our partners, we will have the possibility to go beyond factory level and create systemic change for all garment workers across the industry. We are learning by doing, as we are testing things that nobody in our industry has ever done before.”

Going forward, H&M may choose to adapt the roadmap in light of the ETI’s findings. It has also committed to “go beyond factory level and create systemic change for all garment workers across the industry”. 

A responsible roadmap?

Published in 2013, H&M’s fair living wage roadmap has spurred the firm to work collaboratively with the IndustriALL Global Union through the ACT platform, which helps retailers to revamp approaches to bargaining agreements and responsible purchasing practices.

The retailer has additionally partnered with the likes of Sida, the International Labour Organisation (ILO) and IF Metall to train management and workers in exemplary workplace cooperation and dispute resolution since launching the roadmap.

Earlier this year, H&M announced that more than 930,000 garment workers located in its supply chain were covered by the roadmap, with 84% of the company’s product volume produced in factories that are improving wage standards and human rights approaches, as of October.

However, the claim was criticised by the Clean Clothes Campaign (CCC) – an alliance of labour unions and NGOs aimed at championing ethical garment production – which accused H&M paying its factory workers across Bulgaria, Turkey, India and Cambodia wages below the poverty line.

In response to these accusations, H&M told edie that its supply chain audits had not highlighted any factories where garment workers were paid less than the minimum wage.

A spokesman for the company additionally claimed that H&M “regularly” follows up on ethical standards at its suppliers and will end its business relationship with any given supplier if it is found to fall foul of its commitment requirements.

Ahead of the fair wage summit, H&M published new information on the wage requirements it enforces across its supply chains in Cambodia, Turkey, China and Indonesia. The figures state that the average worker in Cambodia currently receives 123% of the national living wage, with the rate standing at 193% for China.

The CCC declined an invitation to the summit, citing concerns that its marketing “concealed important issues” and that the event would not address these challenges as reasons to abstain from attending. 

Sarah George

Comments (1)

  1. Jeffery Hermanson says:

    Anyone with any knowledge of H&M’s supply chain factories knows that this report is a complete lie. They claim that 100% of their supplier factories have "democratically elected worker representation". In China, Vietnam, Bangladesh, Myanmar? Please don’t take us for fools. Visit any factory in Vietnam and you will find the factory-level union executive committee composed of the HR director as chairperson and the other seats filled by top supervisors. The same is true in China. In Bangladesh, if there is a worker representative body, they are chosen by management and function to prevent authentic worker representation by a labor union. The claims about wages are similarly false and misleading. 49% above the national minimum wage in Bangladesh is nowhere near a living wage. 24% above the national minimum in Cambodia is nowhere near a living wage. This is self-serving BS, and H&M must know it. They are using their Global Framework Agreement and the ACT process as a pretense, while for five years, H&M has claimed to be doing something about wages, and still the workers are malnourished and overworked. Let them have real unions, let them bargain for their wages, and you will see real progress. Until H&M does that, all their words are empty.

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