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Study of 1,000 clothing factories found some fashion firms ‘engaged in unfair practices’, including H&M, Lidl and GAP.​

New York, January 13 (RHC)-- Major international fashion brands, including Zara, H&M and GAP, are exploiting Bangladesh garment industry workers, with some of them involved in unfair practices and paying the suppliers below the cost of production, according to a new study.

The study that surveyed 1,000 Bangladeshi factories making garments for global brands and retailers during the COVID pandemic found that many were paid the same price despite the global pandemic and rising costs.

More than half of the clothing factories experienced at least one of the following: order cancellations, refusal to pay, price reductions or delayed payment for goods, according to the study published by Aberdeen University and the advocacy group Transform Trade.

“Such unfair trading practices impacted suppliers’ employment practices resulting in worker turnover, loss of jobs and lower wages,” the study found.  Of the 1,138 brands/retailers named in the study, 37 percent were reported as having engaged in unfair practices, including Zara’s Inditex, H&M, Lidl, GAP, New Yorker, Primark, Next and others.  The study also found that one in five factories struggled to pay the legal minimum wage since they reopened after the March and April 2020 lockdown.

According to the report, some firms demanded price reductions for clothing ordered before the pandemic started in March 2020, while some others refused to budge on price, despite soaring costs and rampant inflation.  The report included the responses of some companies.

Inditex said it has “guaranteed payment for all orders already placed and in process of production and worked with financial institutions to facilitate the provision of loans to suppliers on favourable terms.”

German supermarket chain Lidl said it took the “accusations very seriously”, adding that it “takes its responsibility towards workers in Bangladesh and other countries where our suppliers produce very seriously and is committed to ensuring that core social standards are complied with throughout the supply chain.”

Primark said that, owing to the pandemic, it had taken “the incredibly difficult decision in March 2020 to cancel all orders which had not yet been handed over.”

The study recommended establishing a fashion watchdog that would help to curb unfair practices by ensuring “that buyers/retailers cannot dump disproportionate and inappropriate risks onto their suppliers and that retailers and brands conform to the norms of fair commercial practices”.

In August, Bangladesh’s garment industry faced a double whammy from slowing global demand and an energy crisis at home that was threatening to thwart the nation’s pandemic recovery.

In the same month, major global retailers agreed on a two-year pact with garment workers and factory owners in Bangladesh, extending a pre-existing agreement that makes retailers liable if their factories do not meet labour safety standards, including retail giants H&M, Inditex, Fast Retailing’s Uniqlo, Hugo Boss, and Adidas.

The exploitation of workers and poor labour safety standards have been highlighted after the Rana Plaza complex collapse in 2013 that killed more than 1,100 garment workers, the deadliest incident in garment industry history.

The European Union warned consumers to stop using their clothes like throwaway items and said it plans to counter the polluting use of mass-market fast fashion.