H&M uncovers document forgery in CSR shake-up

10 May 2006
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11 May 2006 | Anusha Bradley

An in-depth CSR auditing programme run by high street retailer H&M has uncovered an increase in document forgery and abuses of child labour laws among suppliers.

Last year the Swedish clothing firm, which has 1196 stores worldwide, launched a comprehensive programme and improved training for its 40-strong auditing team. The firm's corporate social responsibility (CSR) report says 6 per cent of all 2,670 audits conducted last year were undertaken using the programme, which checks 300 areas of factory management and working conditions.

"As a result, we have detected and begun to address violations that we were not able to verify using our traditional inspection methods," the report said.

Auditors now check documents more thoroughly, and noticed an increase in falsified papers in its Romanian factories after the government started to crack down on labour law compliance. Fake documents were also found in Chinese and Indian factories. Eight per cent of audits in Asian factories, and 24 per cent in European factories uncovered abuses of child and young workers laws.

In its report H&M said it was difficult to always stick to the legal limit of 32 hours of overtime per worker per month, as production was not constant throughout the year.

"Suppliers often felt compelled to falsify documents to comply with labour laws, for fear of not getting orders," it found.

Karolina Dubowicz, who is responsible for H&M's CSR reporting, told SM the firm tried to encourage suppliers to be honest from the start.

"We don't demand full compliance from day one but we want full honesty," she said. Under the new system suppliers are audited from the start. A two-year action plan addressing any problems is created and H&M assists manufacturers to implement them.

H&M aims to use the new programme to conduct all its audits by the end of this year.

SMmay2006

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