H&M CEO praised for suggesting minimum wage increase for textile workers

6 September 2012

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6 September 2012 | Adam Leach

The CEO of H&M has met with the prime minister of Bangladesh to lobby for an increase in the minimum wage for textile workers to make the supply market more stable.

Karl-Johan Persson met with Sheikh Hasina on Monday in the country’s capital city Dhaka. He also called for more frequent reviews into pay levels in the country, from which H&M sources a large amount of supplies. The company called for the minimum wage to be reviewed on an annual basis.

In a statement, Persson, said: “Since foreign trade plays a major role in the development of countries as a source of economic growth, we believe it is in the interest of the Bangladeshi textile industry, as well as in our interest, that it continues to develop into an advanced and mature textile industry.”

Bangladesh’s textiles and clothing industry is the country’s biggest export earner. It employs more than three million workers and minimum wage has been a key workers’ rights issue in recent years.

H&M, which has been buying supplies from Bangladesh since 1982, said its priority is to ensure workers are properly compensated for the work that they do. However, it explained that improved conditions further down its supply chain would benefit its own operations. It said greater stability in the market would “help employers and buyers work together and focus on productivity as well as on developing a constructive framework to improve resource efficiency in the textile and garment sector”.

Peter McAllister, director of the Ethical Trade Initiative (ETI), which campaigns for workers’ rights, said they commended H&M chief executive for raising the question of minimum wage, describing it as a “good example of a major brand taking seriously its responsibilities towards those in its supply chain”.

However, it added that minimum wages, which are set by the government, are a minimum often not enough for workers to survive on and are “certainly not a legal maximum”. The ETI’s ‘Base Code’, which is based on the conventions of the International Labour Organisation, advocates for a living wage, meaning that workers receive enough to meet basic needs as well as have some discretionary income. The ETI is working with key stakeholders, including companies, trade unions and non-governmental organisations to establish a programme that addresses key labour rights such as living wage and worker management dialogue.

This week, H&M also announced that it is to implement a ban on perfluorinated compounds (PFCs) from all of its products. The chemical, which is used as a water repellant, is harmful to the environment and for aquatic organisms. The ban will apply to its global supply chain from 1 January 2013.

H&M is involved in a variety of cross-sector initiatives to reduce hazardous chemical use in the textiles supply chain, including the AFIRM international working team, which also counts Hugo Boss and Puma among its members.

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