H&M has proved that compliance, CSR and sustainability go hand-in-hand with colossal financial success

H&M has proved that compliance, CSR and sustainability go hand-in-hand with colossal financial success

Swedish fashion retailer H&M is one of the leaders of the move to change compliance, and is at the forefront of sustainability. However, at the same time H&M appears to show no interest in the safety of workers making its products, write Emma Birnbaum and David Birnbaum. What is the difference between compliance and worker safety? they ask.

This is a most difficult article. We have spent more than a few months looking at the subject. However, for better or worse we have finally decided to go forward.

So, here it is. We have a question that has been bothering us for a long time. We would be most grateful to anyone who can provide an answer: Why does H&M, a company world-renowned for ethical behaviour – and a leader in the move to bring higher ethical standards to the Bangladesh garment industry – fail to play a role in the efforts to improve worker safety in that industry?

The history

Following the 2012 Tazreen Fashions fire and the 2013 Rana Plaza factory building collapse, both EU and US based garment importers rushed to create organisations to inspect Bangladesh ready-made garment factories for structural and operational safety standards.

On 2 February 2016 a fire broke out at the Matrix Sweaters factory located on the 7th floor of an industrial building in Gazipur. Fortunately, the fire occurred between shifts, with the result that only seven workers died. Had the fire occurred one hour later, after the new shift had begun, the lives of 6,000 workers would have been placed in jeopardy.

The US based Alliance for Bangladesh Safety had inspected Matrix in May 2014, at which time the inspectors tagged Matrix for lack of adequate fire doors, sprinklers, fire alarms and fire hoses. The Alliance mandated that complete remedial action be taken not later than September 2014, six months after the date of the inspection.

Subsequent to the Alliance report, the EU-based Accord on Fire and Building Safety in Bangladesh carried out a series of follow-up inspections which mandated a Corrective Action Plan (CAP). The last CAP inspection prior to the fire concluded that "none of the hazards that pose the greatest danger to the safe exit of workers during a fire had been fully remedied."   

Furthermore, the week before the 2 February fire, an earlier fire had broken out in Matrix.

Matrix's most important customer was H&M. In fact, H&M is the largest garment customer in Bangladesh.

The current situation – compliance

  • H&M is in the forefront of the movement to ensure higher standards of compliance in its Bangladesh factory suppliers;
  • H&M has forced its supplier factories to raise minimum wages sufficient to ensure for a reasonable living standard;
  • H&M has instituted rules to reduce excessive overtime in its supplier factories;
  • H&M has worked hard to improve lodging at its supplier factory dormitories;
  • H&M is an industry leader in the move towards greater sustainability.

H&M is in the forefront of the movement to ensure greater sustainability.

  • H&M is working to create a closed loop, zero waste system;
  • H&M sells and promotes the seasonal line Conscious Exclusive Collection, composed of garments made from recycled materials;
  • H&M has set up a global in-store garment depot to recycle used clothes;
  • H&M is working to raise the number of women in both staff and management: 77% of employees and 72% of managers are women;
  • H&M has received a PETA "Libby Award" for the "best animal-friendly clothing company;
  • H&M has been recognised by Greenpeace as a "Detox Leader";
  • H&M has been recognised by Ethisphere as the most ethical company in the industry;
  • H&M is working with the WWF to improve and limit water waste;
  • H&M is working with Jeanologia to develop sustainable denim techniques;
  • H&M is working with Care to educate women and develop opportunity in the handloom industry linked to sustainable markets.

H&M has proved that compliance, CSR and sustainability go hand-in-hand with colossal financial success.

By the standards of South Asia, H&M is a leader for positive change for working conditions. It is indeed an admirable customer.

The role of the customer in the move towards better working conditions cannot be overemphasised.

Only the customer has the power to ensure effective change because the customer is the one that supplies the orders the factory depends on to survive.

The customer giveth and the customer taketh away.

The current situation – worker safety

In this area, H&M is not in the forefront for positive change. H&M is not even at the rear. H&M seems totally uninterested in worker safety.

A detailed report published in September 2015 jointly by the Clean Clothes campaign, the International Labor Rights Forum, the Maquilla Solidarity Network and the Workers Rights Consortium analysed H&M factory suppliers in Bangladesh with special consideration given to the top Gold and Platinum categories.

The report details the status of H&M's top factories as follows:

Safety Renovation Delays:

No delaysOnly few renovations 1%-20%Many renovations behind schedule 20%-50%Most renovations behind schedule 50%-100%
0%6%41%53%

Total number of safety renovations behind schedule – length of delay:

0-3 Months3-6 Months6-12 MonthsMore than 12 Months
4687699180

Percentage of factories that lack specific fire safety renovations and number of workers endangered:

Locking Doors Not RemovedSliding doors and Collapsible door Not RemovedNo Fire Exits
16%55%61%
25,50064,39278,842

The September report is but one of an increasing number of reports published by serious professionals criticising H&M. However, H&M has yet to provide any comments showing its side.

If this is the situation at H&M's very best – Gold and Platinum ­– suppliers, we can only imagine the situation at H&M's lower level and subcontract factories.

The question: H&M is one of the leaders of the move to change compliance and is at the forefront of sustainability. At the same time H&M appears to show no interest in the safety of workers making its products.

What is the difference between compliance and worker safety?

We do not think the answer is simple. It certainly is not limited to the garment industry. Time and time again global industry leaders have been complicit in disaster after disaster:

  • 2011– Patagonia: Taiwanese owned mills were tied to human trafficking and worker exploitation.
  • 2011– Apple: Foxx-con – Apple's largest supplier – workshop and factory both suffered explosions. The first resulted in 13 worker injuries and in three worker deaths, the latter resulted in 61 worker injuries, thankfully no-one was killed;
  • 2015 – BHP Billiton and Vale SA: Joint venture in Brazil led to a dam rupture killing 16 people, leaving 100s homeless and polluting an 800km river.

We cannot blame Patagonia, Apple or BHP Billiton for these events. They were not responsible. What is true of Patagonia, Apple and BHP Billiton is equally true for H&M. We cannot hold H&M responsible for the Rana Plaza catastrophe. H&M was not a buyer at Rana Plaza, did not build the factory, nor were they present when local authorities inspected the factory building structure. To hold H&M responsible retrospectively is not only unfair but more importantly irrational.

To H&M's credit, it paid its share of compensation to the families of workers killed. Compensation here was not a legal, but rather an ethical requirement, which is very much a part of H&M culture.

The real issue begins post disaster

What steps, if any, should the customer take to ensure that no repetition of these terrible events ever again occur?

There is a wide range of possibilities:

At the top of the list is Patagonia, where policy was guided by three requisites:

  • Immediately take responsibility
  • Take strong action
  • Be totally transparent

Patagonia took laudable steps to remain transparent by openly discussing the human trafficking endemic to its supply chain by. After a 2011 audit of a Taiwanese-owned mill revealed signs of modern slavery, Patagonia published the findings; conducted an extensive investigation; identified and independently worked with victims; reached out to NGOs, local experts, the Fair Labor Association and governments; documented the entire process and eventually released its in-house standard.

Additionally, Patagonia partners with its suppliers to develop sustainable, corrective actions plans and has developed a zero tolerance policy: if a problem is not rectified one week after it is identified, the supplier is served a warning. If immediate action is not taken, the factory/mill is dropped. Even today Patagonia continues to talk and write about the problem of human trafficking and its experiences. In the face of tremendous disaster taking responsibility, acting with humility and cultivating transparency is fundamental to regaining corporate integrity and respect.

At the bottom of the list lies H&M: refusing even to discuss the matter.

This creates not one, but two serious problems:

  • At some point H&M will be forced to accept the existence of the problem and take action.
  • H&M will then have to explain why it did not act earlier.

For people of our background, the move from sleeves and shoulder pads to ethical culture is quite a jump. However, as the world moves forward even we garmentos are increasingly forced to consider the broader issues that directly affect our industry and its players.

H&M presents itself as rigorously ethical, a beacon of sustainability and equality, leading by example, not only for the industry but for the world at large. H&M management believe themselves to be the apotheosis of how a responsible, ethically driven company should act.

The H&M website clearly states: "H&M does not own factories, but instead buys products from independent suppliers that are close long-term partners of H&M. We work to bring about long-term improvement for people and the environment – in the supply chain, the garment lifecycle and the communities in which we are active."

I believe that H&M management considers ensuring a living wage, reasonable overtime, decent conditions in dormitories and ensuring the highest level of sustainability to be an obligation, which they gladly undertake.

However, they clearly look at worker safety, particularly at the structural level, as a factory supplier obligation.

Now we get to the real issue. H&M clearly takes the position that the issue remains unchanged. Responsibility still lies with the factory.

However, there is another aspect to consider.

As written above: "Only the customer has the power to ensure effective change because the customer is the one that supplies the orders the factory depends on to survive."

There is a corollary: "When the customer is seen to take no action, the effect is to give license to even more egregious neglect of worker safety."

The ethical issues here are not unique to H&M, in fact they are endemic of most people and organisations. As we get further and further away from our intimate circle, our ability to empathise wanes: 

  • It is natural to mourn a loss of a family member over the loss of a friend;
  • It is natural to mourn the loss of a friend over the loss of an acquaintance;
  • It is natural to mourn the loss of an acquaintance over the loss of a stranger.

At the end of the day physical and emotional proximity dramatically effect how and what we value and, ultimately, how we value life. The general result is a dichotomy between us and them. 

When we look at the issues concerning worker safety at H&M's Bangladesh supplier factories, what do we see?

  • The financial cost to H&M to raise worker safety in Bangladesh is negligible.
  • It is inconceivable that H&M would ever allow these problems of worker safety to arise in Sweden.

This is not a question of paying sewers in Bangladesh the same wages as their counterparts in Sweden or reducing working hours to Swedish equivalents. This is a question of humanity.

We must traverse the physical, socio-economic, racial, lingual and cultural gap to authentically empathise with the millions of individuals who are in our care and are making our products.

Either all people everywhere are equal or in the words of George Orwell: "All animals are equal but some animals are more equal than others."   

This is the underlying issue, which H&M must now face – and so too must the rest of us.

In our rush to do the right thing we must never forget the individuals we are doing the right thing for. 

The caveat

The above is the opinion of two people, albeit garment professionals. Our answer will certainly prove controversial. Others may claim that our conclusions are incorrect – as well they might well be.

If you disagree, we invite you to provide you own answer to the question: Why compliance but not safety?

Two separate stories on just-style over the past week highlight the challenge. On the one hand H&M has been rated one of the world's supply chain leaders, with a nine out of ten rating for corporate social responsibility (CSR). On the other, though, it has been criticised for failing to live up to its commitments to protect workers in its supply.

H&M, Inditex and Nike rated supply chain leaders

H&M criticised for labour abuses in India and Cambodia

In response to this article, H&M says:

"It would be impossible for H&M to operate if we didn't take responsibility for how those working for our suppliers are treated. We want people to be treated with respect and that suppliers offer their workers fair wages and good working conditions. It is, of course, of outmost importance that all factories producing for us are safe. All our suppliers must follow our mandatory fire safety requirements and we welcome even stricter regulations.

"The new additional requirements from the Accord on Fire and Building Safety, transforming the entire Bangladeshi textile industry, are gradually implemented at more factories. The work is a complement to the mandatory H&M requirements such as having emergency exits, emergency lights, fire alarms, fire extinguishers, evacuation plans and regular evacuation drills.

"The remediation process was initially delayed, partly due to import delays of upgraded safety equipment as well as a shortage of technical expertise needed to conduct detailed engineering assessments, planning and submissions of drawings, and installation of technical equipment. However, now the remediation is showing progress. To further speed up the remediation we are working closely with IndustriAll to use our combined leverage where needed. We are also in close contact with the suppliers to support them and follow up on the work that remains to be done.

"We regularly provide public updates on the progress with fire safety on our website, you can read the most current one here."