As H&M Steps Up, Bangladesh Suppliers and Workers Ask ‘Where Are the Other Brands?’
“Where are the other brands?” Mostafiz Uddin, managing director of Denim Expert, a jean manufacturer in Bangladesh, texted a reporter over the weekend.
Uddin had just published a post on LinkedIn praising H&M Group, whom he counts as a client, for committing to paying its suppliers more in anticipation of the minimum wage hike for garment workers, which the South Asian nation fixed at 12,500 Bangladeshi taka ($113) on Saturday after weeks of protests demanding nearly twice as much.
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But even the smaller increase will prove burdensome without a corresponding markup in prices, factory owners say. Contracting economies and unbridled inflation have conspired to crush orders and escalate the cost of everything from fuel to medicine. Many of the world’s biggest names source clothing from Bangladesh, the second-largest exporter of apparel after China. And yet the Swedish retailer stands alone in assuring its network that it will absorb the wage increase in the prices it pays, Uddin said.
“This is the third occasion on which H&M has increased prices following an increase in the minimum wage. The company also did the same after previous minimum wage increases in 2013 and 2018,” he wrote of H&M’s letter, which the fast-fashion purveyor sent to suppliers last Tuesday. “Leadership like this matters as it sets a standard for other fashion brands in the industry to follow.”
Uddin told Sourcing Journal that he “demands” to see the same from other brands, most of all the likes of Adidas, Gap Inc., Levi Strauss, Puma and Calvin Klein owner PVH Corp., which sent a letter to Prime Minister Sheikh Hasina in October urging her government to settle on a minimum wage that would cover garment workers’ basic needs in “constructive” dialogue with labor groups, trade unions and other relevant stakeholders.
Though a handful of brands have responded to queries from Sourcing Journal to say that they believe in workers “accessing a standard of living that includes adequate food, clothing, housing, medical care and necessary social services” (in the case of Levi’s), are “??committed to fair labor practices, fair wages and safe working conditions” (Adidas), “remain committed to implementing responsible purchasing practices” (Puma), and are “committed…to conduct labor costings in line with predicted wage increases as soon as the information becomes available…and to incorporate this into purchasing prices,” (Zara owner Inditex), none have explicitly and publicly pledged to raise prices. Still more remain silent.
“Lots of brands have publicly urged the Bangladesh government to increase the minimum wage but H&M is the first brand to support such sentiments with meaningful action,” Uddin said. “From my 25 years of experience in the clothing industry, I have never seen any buyers send a letter transparently and openly, except H&M.”
H&M confirmed that it had sent the letter expressing its “commitment to stand behind our responsible purchasing practices to our business partners in Bangladesh after the new minimum wage.”
“We have communicated to our suppliers that we acknowledge the importance of our purchasing practices as enablers for improved wage levels, better planning and forecasting and beneficial payment terms,” a spokesperson said. “When we decide how to price our offer to customers, we always ensure that we have the best combination of fashion, quality, price and sustainability in every market where we operate.”
Miran Ali, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which represents factory owners, said that Bestseller, C&A, Gap and H&M have responded to the trade group’s entreaties for price increases to say that they would be paying more. As far as he knows, however, only H&M has directly reached out to suppliers as well.
C&A told Sourcing Journal that as a family business, it doesn’t disclose specific financial figures but that the retailer, as a member of the IndustriALL Global Union-led global framework on living wage known as Action, Collaboration, Transformation, a.k.a. ACT, it “believes that a sustainable apparel industry requires progress on living wages.”
“We are in discussions with our suppliers and internally to assess the situation and take final decisions,” a representative said. “Once these have been made, we can come back to this. We are confident that together with our strong network of suppliers, in Bangladesh but also in many other countries, we will find solutions. The affordability of our products remains to be an important value at C&A…as is our support for higher minimum wages in the region.”
Bestseller, a member of the Ethical Trading Initiative, would only say that it has backed public statements by human-rights multistakeholder initiatives supporting tripartite engagement and urging the Bangladeshi government to revisit negotiations. Gap declined to respond, referring instead to a previous statement from American Apparel & Footwear Association president and CEO Steve Lamar expressing a commitment to responsible purchasing practices to support the wage increases.
Ali said that while the BGMEA is “paying very close attention” to which brands are “supporting” suppliers and which ones are not, it’s still too early to tell one group from the other, since the new minimum wage goes into effect on Dec. 1. “In due course, the BGMEA will be reviewing which brands have come through with their support and which ones have not,” he said.
‘Set up to fail’
Indeed, suppliers are expected to respect human rights and promote gender equality yet are “set up to fail” by their buyers, two new benchmarks from the World Benchmarking Alliance (WBA) found last week. The multistakeholder organization, whose “allies” include Accenture, B Lab, CDP and ??the International Trade Centre, cast a gimlet eye on 55 apparel companies, including Adidas, Gucci owner Kering, Uniqlo parent Fast Retailing, Shein and The North Face owner VF Corp. Despite some headway in recent years, more than 60 percent of brands scored less than 20 out of a possible 100 on human rights indicators and 38 percent gleaned less than 20 out of a possible 100 on gender equality indicators.
“High performers” across both benchmarks, including VF Corp. and Inditex, have “fundamental corporate due diligence and sector-specific policies” for their supply chain to protect workers against violence, harassment, and child and forced labor, WBA noted. Others, such as Shein, Prada, and Youngor Group, failed to meet key indicators across the board. Shein declined to provide a statement while Prada and Youngor Group did not respond to emails requesting comment.
Namit Agarwal, WBA’s social transformation lead, said that he didn’t find a correlation between a company’s performance and whether it fell into the fast fashion, middle market or luxury category. The problems, he said, are endemic, with many buyers failing to pull their own weight when it comes to taking on the issues of human rights and gender equality. The same goes for wages.
“I think a lot of the expectation is there from brands—they have commitments—but when it comes to implementing a lot of those expectations, particularly in supply chains, when it comes to wages, livelihoods and all of that, there are big gaps,” Agarwal said. “And unless companies really follow through and work with their suppliers in addressing some of those issues, you’re not going to see a significant change in what’s happening on the ground.”
Among the “advanced steps” companies need to take, he said, is making sure that there is enough training and capacity building, not only with the sustainability department but also with the procurement teams “because often what happens is the commitments are met by the sustainability but when it comes to the procurement departments, they are not necessarily prioritizing sustainability.” That dichotomy is why a lot of commitments “fall flat on the ground,” Agarwal added.
Brands also don’t necessarily see themselves as responsible for worker welfare, since the vast majority don’t own their own factories, something that Agarwal says the analysis supports. But focusing on direct operations over the rest of the supply chain would be a mistake, whether morally or in light of impending legislation.
“A lot of these workers in the supply chains are in the global south in regions where the rule of law is not necessarily that strong,” he said. “So it is the responsibility of the business to make sure that if they have any policy, whether it’s around violence and harassment or family-friendly policies, it should apply globally, irrespective of the role of the workers.”
‘Systematic punishment‘
There are more immediate ways brands can intervene in Bangladesh, said Thulsi Narayanasamy, director of international advocacy at the Worker Rights Consortium (WRC), a labor advocacy group. Garment workers, she said, are encountering “systematic punishment” and retaliation for protesting against the new minimum wage proposal, including police and military violence, arrests and terminations. Already four people have died, three after allegedly being shot at by police.
Narayanasamy said that the BGMEA has been directing member factories to file mass criminal cases against workers, both named and unnamed, as well as to submit evidence of worker demonstrations directly to the organization, although the trade group has called this allegation “entirely false” and that any cases filed against the destruction of property, looting and harm to employees, as caught on CCTV footage, are a “lawful right for any victim.”
Still, at least 43 First Information Reports (FIRs) have been filed in police stations, Narayanasamy said, leaving thousands of workers at risk of arrest. “WRC research reveals international brands including H&M, Gap, Bestseller, VF Corp., PVH Corp, Kontoor Brands and Matalan are linked to cases issued against more than 20,000 garment workers by their factory suppliers leading to widespread fear about false arrests,” she said.
The WRC says that a minimum of 115 garment workers, including at least three union leaders and organizers, have already been arrested and imprisoned, where they face “challenging conditions in overcrowded jails” already filled with opposition party supporters who have been rounded up ahead of January’s election. Brands, Narayanasamy said, need to not only reject the current wage offer and commit to increasing prices and maintaining production levels, but also ensure that no further mass FIRs against unnamed workers are filed, that unsubstantiated charges against workers are dropped, that workers are paid in full for “illegal lockout periods initiated by employers” and that factories are not continuing to threaten employees with closures.
Bestseller said that it’s taking the WRC’s findings “very seriously,” while C&A said that it, along with its fellow ACT members, expresses a “profound concern over the violence resulting in injuries and fatalities among individuals involved in recent wage protests” while calling for authorities to “protect all people affected…in line with international standards” without detention or discrimination.
“Our teams on the ground are continuously monitoring the developments,” the H&M spokesperson said. “Protecting workers’ rights in our suppliers’ factories is of utmost importance to us and we will follow up on any findings brought to our attention.” The other brands either declined or did not respond to requests for comment.
For workers, however, the danger is clear and present, not something to be monitored.
“These false charges aim to intimidate and distract us from focusing on the movement,” said Taslima Akhter, president of Bangladesh Garment Workers Solidarity, a union whose organizing secretary, Babul Hossain, has been accused of setting fire to a car in Gazipur despite other members testifying that he wasn’t in the city on the day of the alleged incident. Bail requests have so far been rejected.
“It’s tough to handle this alone,” Akhter told Sourcing Journal. “We need collective pressure for movement.”
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