A study of 1,000 clothing factories found some fashion firms “involved in unfair practices”, including H&M, Lidl and GAP.
Major international fashion brands, including Zara, H&M and GAP, are exploiting workers in Bangladesh’s garment industry, with some engaging in unfair practices and paying suppliers below production costs, according to a study published on Wednesday.
The study, which examined 1,000 Bangladeshi factories producing clothes 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 garment factories have experienced at least one of the following: order cancellations, payment refusals, price cuts or delays in payment for goods, according to a study published by Aberdeen University and advocacy group Transform Trade.
“Such unfair business practices have impacted suppliers’ employment practices, resulting in worker turnover, job losses and lower wages,” the study found.
Of the 1,138 brands/retailers named in the study, 37 percent were reported to have 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 are struggling to pay the legal minimum wage as they reopened after lockdowns in March and April 2020.
The fashion industry needs to change.
Find out from a survey of 1,000 Bangladeshi factories by Transform Trade and the University of Aberdeen: https://t.co/yEcfhJr6LP pic.twitter.com/fsUR4nNdCG
— Transform Trade (@transformtrade_) January 10, 2023
It also found that some firms demanded price reductions for clothes ordered before the outbreak of the pandemic in March 2020, while some others refused to budge on the price, despite soaring costs and rampant inflation.
The report included responses from some companies.
Inditex said it has “guaranteed payment for all orders already placed and in production and has worked with financial institutions to facilitate loans to suppliers on favorable terms”.
German supermarket chain Lidl said it took the allegations “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 basic social standards are met throughout the supply chain.” “.
Primark said it had taken the “incredibly difficult decision to cancel all orders that have not yet been delivered” in March 2020 due to the pandemic.
The study recommended the establishment of a fashion watchdog to help curb unfair practices by ensuring “that buyers/retailers cannot impose disproportionate and inappropriate risks on their suppliers and that retailers and brands adhere to standards of fair business practice”.
In August, Bangladesh’s garment industry faced a double whammy from a slowdown in global demand and an energy crisis at home that threatened to derail the nation’s recovery from the pandemic.
In the same month, major global retailers agreed a two-year pact with garment workers and factory owners in Bangladesh, expanding an already existing agreement that holds retailers accountable if their factories fail to meet occupational safety standards, including retail giants H&M, Inditex. , Fast Retailing’s Uniqlo, Hugo Boss and Adidas.
Worker exploitation and poor work safety standards were highlighted after the 2013 Rana Plaza collapse that killed more than 1,100 garment workers, the deadliest incident in the history of the garment industry.
The European Union has warned consumers to stop using their clothes as throwaways and says it plans to tackle the polluting use of mass-market fast fashion.