By Jasmin Malik Chua / Source: Ecouterre

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H&M and Marks & Spencer can ballyhoo their stances on ethical sourcing all they want, but not everyone is buying it. Among the skeptics? Labour Behind the Label, a workers-rights group that claims that the retailers have not lived up to their promises to promote “fair living wages” for the people who make their clothes. “Both brands have hung their ethical credentials around this key human rights issue, to great applaud, but without reporting clearly on the outcomes of the schemes,” wrote Anna McMullen, lead author of the U.K. group’s latest report. “While consumers are left to trust that what was said is being done, many are left wondering about the real impact of the promises that were made.”

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TRUTH AND REALITY

Six years after M&S pledged to “implement a process to ensure our suppliers are able to pay workers a fair living wage,” starting with South Asia by 2015, workers in three factories in Sri Lanka, three in India, and two in Bangladesh continue to live in “abject poverty,” according to Labour Behind the Label.

In Sri Lanka, the basic pay averaged 13,500 rupees ($197) per month, but workers interviewed by campaigners said they needed at least 33,000 rupees ($481) to support their families. Living conditions were abysmal, with the majority of workers sharing single-room, tin-roofed houses without access to running water.

In India, workers were frequently in debt, earning 6,284 rupees ($92) a month when they needed 13,000 rupees ($190) to make ends meet.

Traveling to Bangladesh, Labour Behind the Label campaigners found M&S workers living in slum housing and earning a maximum wage of 8,000 taka ($102) per month, when a basic living wage called for at least 15,000 taka ($191). “[They were] in debt, having to pay for groceries on credit each month because wages were too low,” McMullen said.

M&S insists, however, that it has made a “significant difference” since it tasked itself with improving working conditions in its clothing supply chain in 2010. According to a spokesman, the average wages at the company’s supplier factories in Bangladesh are 60 percent above the current minimum wage.

“There’s always more to be done due to the complex nature of the clothing supply chain and we cannot determine the wages paid to supplier employees,” the spokesman said. “However, we are committed to ensuring our cost prices remain high enough to pay a fair living wage, training workers in financial literacy and worker rights, and playing our part in collaborating with other brands and governments to improve the sector.”

But as far as Labour Behind the Label is concerned, M&S has failed, mostly because the company’s basic assumptions were faulty out of the gate.

“[M&S’s] fair living wage method relied on three basic assumptions: that the benchmark M&S were using reflected the actual needs of workers themselves; that efficiency gains would be sufficient to ensure pay increase to workers in factories supplying multiple buyers; and that the systems set up in the ‘ethical factories’ would be robust enough to ensure workers themselves benefited from any gains made,” McMullen wrote. “From our perspective, these assumptions were flawed from the start, and as such the program was always going to struggle to actually ensure workers throughout the supply chain were able to earn a living wage.”

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SETTING BENCHMARKS

Over in Cambodia, campaigners found that wage levels at H&M’s so-called “strategic suppliers,” which it considers among its best, had increased, but not enough to meet a living wage it’s been promising.

“Workers reported issues with short-term contracts limiting their rights to holiday and bonuses. In some factories, piece-rate systems had been put in place causing workers to skip breaks, and leaving them exhausted and prone to regular illness,” McMullen wrote.

The average pay came in at $187.97 but workers said they need about $230 to “live with dignity,” she added.

Still, as Labour Behind the Label notes, H&M is in the initial stages of its commitment. The retailer announced its vision and roadmap for fair living wages in supplier factories in November 2013, with the goal of improving pay structures for 850,000 textile workers in Bangladesh and Cambodia by 2018.

Writing in the report, McMullen praised H&M for collaborating with international stakeholders such as the International Labour Organization, as well as global union federations such as IndustriAll and UNI Global2.8.

But McMullen also criticized H&M for not putting a figure to what it considers a fair living wage, instead deferring to the textile workers’ “own opinion of what a decent living wage is.”

Benchmarks are necessary because they provide measurable goals and allows unions to negotiate defined sums, she said.

“If H&M were to establish a living wage benchmark, in consultation with the local trade
unions, it would send a signal to the industry that H&M are not going to leave the country if wages are increased to that level,” McMullen said. “More could be achieved if H&M [was] willing to publicly support a living-wage benchmark as a minimum basis for negotiation.”

Plus, the company’s perceived secrecy is not the way to progress, McMullen added.

“Although H&M are, on the surface, shouting [its] fair-wage commitments from every rooftop, the work to make outcomes a focus of agreements and sustainability reports is less forthcoming. This has led to some skepticism in regard to whether real and genuine progress is actually being made,” she said. “In the same vein, while we can only welcome H&M’s apparent willingness to sign agreements with global organizations, its reluctance to meet with local unions, whose members are actually experiencing the day to day reality of working in an H&M factory begs some serious questions as to H&M’s intention to go beyond generalized commitments toward on-the-ground implementation.”

H&M refutes Labour Behind the Label’s claim that it lacks transparency. “Besides from collaboration, we also believe transparency is a key catalyst of positive change,” a spokesman told Ecouterre. “Therefore, we have published our supplier list and we constantly keep track of where our products are being produced. In this way we can focus our sustainability program and continuously improve the working conditions for the 1.6 million workers who are employed by our suppliers. We also publish our sustainability result in our yearly published Sustainability Report.”

The company says that while its goal is for all employees in the textile industry to earn a fair living wage, development “takes time.”

“We want to further accelerate our work, but we must be patient since it is a complex issue that affects not only the suppliers we work with, but also other actors,” the spokesman said. “Raising wages in the textile industry is a shared responsibility involving a number of stakeholders with which we have continuous dialogue with.”

In light of M&S’s poor showing, McMullen has some advice for H&M.

“H&M’s process has not yet failed,” she said. “But we would urge [it] strongly to consider the reasons why the M&S scheme didn’t get off the ground—a reliance on ‘efficiency savings’, a failure to act collaboratively, and a failure to be open and transparent about progress.

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