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H&M Continues its Commitment to Bangladesh Labor Reform

Continuing its efforts to aid in the gradual reform of Bangladesh’s labor practices, Swedish retailer H&M announced its commitment to the Business Call to Action (BCtA), a new initiative designed to provide vocational training to workers, thereby increasing productivity.

Helena Helmerson, global chief of sustainability at H&M, said, “We are pleased to announce our partnership with the International Labour Organization (ILO) and Swedish Development Agency (SIDA) at the BCtA platform as another step in our commitment to support long term social development in Bangladesh. The training will raise the workers’ level of education, provide them with skills required for development of the industry and increase their employability.”

The acting program manager for BCtA, Sahba Sobhani, acknowledged H&M’s participation with enthusiasm. “Through its expertise and focus on long-term sustainability, H&M’s focus on skills and development training, ensuring better workplace conditions and social dialogue in countries like Bangladesh is a win-win for all. The Business Call to Action welcomes companies such as H&M that support women and work to address gaps in skills training in an effort to develop business models with a positive impact on people living in poverty.”

H&M has been positioning itself as an industry leader when it comes to compliance, especially in Bangladesh and Cambodia. Last November, it announced an ambitious plan to deliver a “fair living wage” to the 850,000 textile workers who produce its garments by 2018.

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H&M had published a “road map” for accomplishing what initially seems like a daunting task. First, it plans to collaborate with factory owners to “develop pay structures that enable a fair living wage, ensure correct compensation and overtime within legal limits.” Then, H&M will test its approach in three separate factories, one in Cambodia, where it continues to bolster its presence, and one in Bangladesh.

Eventually, H&M will extend the initiative to include its “strategic suppliers” which lists more than 750 factories. H&M also wants all of its workers to have access to occupational training that improves their basic skills. The company plans to extend to their workers in both Bangladesh and Cambodia some basic training in collective bargaining, largely by introducing them to labor organizations in Sweden.

In search of low cost labor and high production capacity to service a high volume business, H&M looked to South Asia for its manufacturing needs. It moved into Bangladesh in 1982 and then Cambodia in 1998, always infamously tight-lipped about the nature of its commitments to these factories.

H&M refuses to believe that their efforts will negatively impact the costs of business, or their products. A company spokesperson said, “We don’t see that our roadmap on the fair living wage will have a negative impact on the price of our products. It is an investment in our customer offering and will benefit H&M long term. Wages are only one of several factors influencing the sourcing costs and prices in our stores.”

The BCtA initiative aims to establish a “Skill Development Centre of Excellence” which will provide job training, with the readymade garment industry as its special focus. The goal is to train approximately 5,000 workers by 2016.