The fashion giant opens its first NZ store this week. Underneath the hype is a company with a chequered history.
Photo: AFP
There’s a particular hysteria that seems to descend on New Zealand when an international brand comes to town. Maybe it’s a hangover from the days when ships from mother England spent months on the high seas before reaching Kiwi shores, but the first whispers of brands - be it Topshop or Taco Bell - arriving from other continents still shoot straight to the front pages.
The arrival of Swedish clothing giant H&M has been no different.
H&M is the second largest clothing retailer in the world, with 4,100 stores operating globally and another 400 scheduled to open in 2016. One of those will be this month, in Auckland - the first of the store’s brands to open in the country.
The company has put a fairly mammoth effort into generating good publicity around the brand’s arrival in New Zealand - even flying a contingent of fashion editors from Fairfax; the NZ Herald, and Remix on a free trip to Stockholm to tour the brand’s international headquarters.
So far, so effective - the imminent arrival of the brand has resulted in a series of anticipatory articles counting down the weeks till its opening - and even Facebook petitions for eager fans to announce their excitement over the imminent arrival.
The fast fashion titan has built its brand on identifying strong trends off the runway and reproducing them at astonishingly cheap prices. So far, it’s worked for them. In 2015, H&M’s profits after tax totalled 20.89 billion Swedish Kronor, or NZ$3.3 billion. Its sales were up almost 20 percent from the previous year.
But while H&M’s fast fashion model is proving both popular and lucrative; it has also produced a chequered history of labour and human rights abuses - something the plethora of New Zealand coverage so far has largely steered clear of.
At a surface level, H&M is one of the best performing of the big brands in the global garment industry. They won accolades alongside for their commitment to try and institute a living wage for 850,000 garment workers by 2018. The company was the first to sign up to the 2013 Accord on Fire and Building Safety following the disastrous collapse of the Rana Plaza factory that killed 1,129. It is also one of the first major global clothing brands to publish a full list of its supplying factories.
More recently, the company began a highly-publicised garment collecting initiative; where customers can bring in old clothes to be recycled, upcycled or on-sold, with the proceeds going to social causes.
But NGOs, workers and activists say the company has by no means rid its supply chains of major human rights issues.
H&M has faced allegations of child labour and illegal overtime in their Myanmar factories. Photo: Tobias Andersson Åkerblom
At two factories on the outskirts of Rangoon, girls as young as 14 worked in H&M’s supplying factories. They often worked up to 15 hour days, for whole weeks at a stretch.
The situation in Myanmar’s H&M factories was uncovered this year by Swedish investigative journalists Moa Kärnstrand and Tobias Andersson Åkerblom, who spent two years researching conditions in garment factories. They released their findings this month in a book entitled “Modeslavar”, which translates to “Fashion Slaves”.
“There is one girl we write about in the book , she was 14 when she started, and as with the other girls she worked 12 hours a day at some points. She told us that she was not allowed to leave the factory for lunch so her mum had to sneak lunch in through the factory fence,” Åkerblom says.
“That’s something that struck us on an emotional level.”
Investigative journalists Tobias Andersson Åkerblom and Moa Kärnstrand uncovered child labour and poor conditions in H&M factories Photo: Tobias Andersson Åkerblom
H&M subsequently investigated the factories themselves - auditors were sent to the factories and found a large number of workers had been hired with non-valid IDs and problems with illegal overtime.
H&M put business relationship with those suppliers on hold, but Åkerblom said child labour was likely widespread in the country and the company would not say if it had checked the other factories it worked with.
H&M responded in a statement that as the legal working age in Myanmar was 14, they did not consider the teenagers’ situation child labour.
“H&M does of course not tolerate child labour in any form. That teenagers have working hours violating the rules is unacceptable to H&M. Any overtime must be in accordance with legislation as well as our own demands, this is particularly important when it comes to the age group 14–18,” the statement read.
“We have therefore taken action regarding two suppliers in Myanmar which have had problems with ID-cards and overtime,” the company said.
Many H&M workers in Myanmar worked from 7am to 10pm, arriving and leaving work in the dark Photo: Supplied
But outside of Myanmar, the company hit headlines again this year when Syrian refugee child labourers were discovered in its contracted embroidery factories in Turkey.
Business and Human Rights Resource centre researcher Danielle McMullan said the group had discovered “very serious reports about exploitation of Syrian refugees including child labour, very low wages that were very discriminatory, far below minimum wage in Turkey.” When they put the allegations to H&M, the company admitted it had discovered child labour from Syrian refugees in Turkey, and had taken steps to remove the children from the workplace, and support them into education.
McMullan said the exploitation of Syrian refugee labour is widespread within the Turkish garment industry - and at least H&M had been transparent about the problems it was encountering.
“Many other brands simply said no, we haven’t got this problem in our supply chain, which with the evidence didn’t seem very likely.”
Some workers in Myanmar work up to 14 hour days, and were unable to leave the factory for breaks. Photo: Tobias Andersson Åkerblom
The collapse of the Rana Plaza factory in 2013 sparked international outcry and marked a turning point for many companies in the garment industry. Thousands were injured and 1,138 people died when the Savar building collapsed. The 2013 Accord on Fire and Building Safety that was developed to improve the safety and conditions of garment workers in the country, and H&M, the biggest buyer of clothing in Bangladesh, was the first company to sign up.
But three years on human rights watchdogs say the company has failed to follow through on its promises.
“And while there has been some progress in some of those factories, the reality is that the majority of H&M’s factories in Bangladesh still aren’t safe more than a year after the safety renovations were supposed to be completed,” Washington-based Workers Rights Consortium director Scott Nova.
“There’s no question that workers’ lives continue to be at risk in many H&M factories,” he says.
A report by Clean Clothes Campaign checking progress earlier this year found “all but one of H&M’s strategic suppliers remain behind schedule in making repairs and that over 50 percent of them are still lacking adequate fire exits.”
Nova says many of the factories still lack fire escapes, exits and alarms - making them potential death traps in a country that experiences dozens of factory fires every year.
In February this year a Bangladesh factory making clothing for H&M caught on fire early in the morning, injuring four and taking firefighters four hours to contain. Local news reports showed workers jumping from windows as the fire raged above them.
Had the blaze been just a few hours later, the factory would have been packed with up to 6000 workers.
“H&M has over 200 garment factories in Bangladesh, so we’re talking about literally hundreds of thousands of garment workers in that country are sewing clothes for H&M,” Nova says. “Most of those factories still are not safe.”
In a statement, H&M said the timelines set by the accord were “too optimistic”.
“The Accord is working towards a transformation of a whole industry, in a low-income country, to Western safety standards,” they said. The delays were partly due to delays importing safety equipment and a shortage of technical expertise in Bangladesh.
“These are challenges that all brand signatories are facing and they are not specific to H&M.”
The company faced more accusations of unkept promises with its living wage campaign.
H&M committed in 2013 to institute a living wage for all its manufacturers by 2018. But when Labour Behind the Label published an investigation in 2015, they found progress was slow.
“Wages had increased, but not enough to meet a living wage level. 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,” their report concluded. “Average take-home pay came in at US$187.97 a month, but workers estimated they needed $230 a month to live with dignity.”
But the company said it was still on track for its 2018 goal.
The first evaluation of its Fair Living Wage scheme had been tested in a model factory in Cambodia, and overtime had reduced 40 percent, while take-home wage had increased 10 percent.
“During the coming year, we will scale this up to another 60 factories. And by 2018, all of H&M’s strategic suppliers should have improved pay structures for fair living wages in place.”
Workers have helped document child labour and illegal overtime in Myanmar factories Photo: Supplied
H&M is by no means an anomaly in the global garment industry - nor is it at the bottom of exploitation rankings.
Baptist World Aid issues a "Fashion Report" every year, awarding letter grades as measure of clothing companies’ efforts to mitigate the risks of forced labour, child labour, and exploitation throughout their supply chains. This year, H&M was awarded a B+ overall - including an A+ mark for its policies, and C- for worker empowerment.
Many local Kiwi brands scored far lower - with Glassons awarded a C+, Ezibuy a C, while MacPac and Pumpkin Patch both scoring Ds. Topshop, another big international player to recently enter NZ, received a C+.
Baptist World Aid spokesperson Jasmin Mawson said the grades were based on an assessment of companies’ policies and systems, rather than any on-the-ground inspections of conditions faced by workers.
“A high grade in our report does not mean a company has a supply chain which is free from exploitation - rather it’s an indicator of the efforts and the strengths of the systems a company is undertaking to reduce the risks of exploitation,” Mawson said. “It’s an assessment of the systems they have in place rather than what’s happening on the factory floor.”
She said that the size of H&M’s operations, combined with its recent commitments to greater transparency about where it was sourcing clothing from meant the company was bound to come under scrutiny.
Last year the company employed 148,000 people - not counting the workers in its supplying factories and manufacturing. The Workers Right Consortium in Washington estimates 1 million workers are currently employed in the factories supplying H&M’s stores.
“It’s such a giant fast fashion retailer with literally thousands of factories and constant new styles being turned over there’s bound to be challenges,” Mawson said.
She noted that H&M was actually one of the best performers at a policy level, and had invested a great deal in cleaning up its supply chains.
“If it’s a company like H&M which is that big and is investing that much in their systems and we’re still finding significant human rights breaches, then I have no doubt that many other companies are also dealing with the same issues.”
The Business and Human Rights Resource Centre’s Danielle McMullan believes it will take industry-wide reform to improve wages and conditions for garment workers. The heart of the issue, she says, is not just the practices of brands but what consumers expect to pay for clothes now.
“Clothes are being sold incredibly cheaply and there’s ever-increasing pressure to bring the cost of production down,
This, she says which is why we see the garment industry constantly on the move - from China to Bangladesh and on to Ethiopia in search of lower wages. The problem is a fundamental one: that the price brands are paying the factories isn’t enough for the workers in the factories to be paid a fair wage.
“So although they will talk about their auditing and monitoring practices, checking standards in supply chains, that can only do so much, when one of the basic issues is the price that they’re actually paying the suppliers.”
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There’s something astonishing about picking up a garment in a store like H&M. It might be beautifully designed, well-enough tailored and intricately embroidered. Maybe it’s been shipped around the world from a cotton weaver in India, to a factory in Turkey, to a warehouse in Sweden, to a bright, slick, showroom in Auckland.
To know the ingredients of such a garment - the cost of raw cotton, the labour in the factories, the design expertise, the sales assistants on the shop floor, the rent of the buildings, the marketing of the brand and expense of shipping it across several oceans. And see it costs only $10, $20, $30? The price tag is something of a miracle.
While it’s a difficult problem to solve, McMullan says exploitation is not an inevitable feature of making clothing.
“I certainly wouldn’t let any brands off the hook for ensuring that a living wage is paid - undoubtedly it’s a complex issue but it is solvable.” she says.
“Remember this is an industry that makes huge, huge global profits, and at the moment the workers just simply are not seeing a fair share of those profits - I wouldn’t say it’s inevitable at all. It’s a consequence of the business model.”