A Change of Guard

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Tuesday, 30 October 2012

CAMBODIA: H&M hits back at low wage claims

29 October 2012
H&M claims to be "doing more than others" on garment worker wages
H&M claims to be "doing more than others" on garment worker wages
Swedish fashion retailer H&M has hit back at accusations that it fails to pay adequate wages to workers in Cambodian factories making its clothes - and says instead that the situation would be a lot worse if it didn't source from the country.
A Kalla Fakta documentary aired on Swedish television last week claims Cambodian workers at H&M suppliers are paid just SWK3 ($0.45) an hour.
But H&M CEO Karl-Johan Persson told a press briefing that while wages "could absolutely be better," companies like H&M have a responsibility to "buy products from the companies in these countries." 
"It leads to higher employment," he said, adding: "The alternative is extreme poverty.
"Asian wages are low, but that way the economy will grow and they employ millions of workers.
"It's about the country's competitive power. It would have been much worse if we hadn't been there. But we want to be there and make a difference and make sure it's going in the right direction.
"You can't change it overnight. There are many buying from these markets and from these suppliers. We must get others along.

Persson is also adamant that H&M is "doing more than others" on the issue of garment worker wages.
"We have dialogues with the concerned parties [such as unions and the Better Factories Cambodia initiative]. The way to get sustainability in the long term [is] if all the concerned parties can negotiate wages."
He added that H&M wants to see annual wage reviews - an issue it raised with the Bangladesh government last month. "We prioritised Bangladesh where wages are lower," Persson said.
At the time he also argued that increasing the minimum wage would help to create more jobs in Bangladesh.
"Since foreign trade plays a major role in the development of countries as a source of economic growth, we believe that it is in the interest of the Bangladeshi textile industry, as well as in our interest, that the industry continues to develop into an advanced and mature textile industry."
Campaigners, however, point out that while H&M has held high profile meetings with dignitaries such as the Vice Prime-Minister of Cambodia, and officials from the wage board of Cambodia to call for a higher minimum wage, this is not a sufficient response to the health risks and poverty conditions faced by factory workers.
"Low wages come at a high cost. Last year, over 2400 workers passed out in Cambodian factories due to malnutrition as a direct consequence of low salaries," says Jeroen Merk of the International Clean Clothes Campaign.
In September, the Clean Clothes Campaign Network teamed up with the of Cambodian Apparel Workers' Democratic Union (C.CAWDU) to launch a Europe-wide campaign called 'No more Excuses', demanding H&M pay a living wage.
The campaign says that whereas the minimum wage for garment workers is US$61 a month, this amounts to less than 25% of a living wage in Cambodia - which is calculated by the Asia Floor Wage alliance at US$283 a month.
Ahead of the television documentary, H&M last week announced plans for a project to strengthen dialogue between unions and management at some production units in Cambodia.
But again campaigners say it offers no guarantee of living wages for workers.
Instead, activists want all garment buyers sourcing from Cambodia to support the Cambodian trade union's US$131 minimum wage goal.

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