While the fashion industry has begun to focus more on sustainability, inclusivity, and female power this doesn't apply to the workers in the factories of big companies like H&M, Lidl, and GAP. A study was done of about 1,000 factories where the fashion industry was exposed for once again exploiting their workers, the people of Bangladesh. International brands: Zara, H&M and GAP have been exposed for unfair practices— including paying the supplier below the cost of production.
Source: BBC News
The study was published on Wednesday, January 11, by Aberdeen University’s Business School and Transform Trade. It consisted of around 1,000 factories that worked during the COVID19 pandemic from March 2020 to December 2021. The study uncovered order cancellations, refusal to pay, price reductions, and or delayed payment for goods.
Of the 1,138 brands or retailers 37% engaged in unfair practices while one in five struggled to pay minimum wage after reopening post lockdown. The study states, "51% of factories reported at least one out of four unfair practices by retailers: cancellation of orders, price reduction, refusal to pay for goods dispatched/in production, and delay payment of invoices."
After the horrific Rana Plaza Complex collapse, in 2013 killing more than 1,100 garment workers due to poor conditions in factories. While fire and collapsed buildings are not uncommon, this was the first of its scale. People are still dealing with the consequences of this incident including severe injuries, job instability, lifelong conditions, or medications they didn't previously have.
The people of Bangladesh continue to protest for better conditions. Companies signed a legally binding Accord to fix the conditions in the factories or they would be shut down. This agreement was later extended two more years.
Firms demanded price reductions for clothing ordered before the pandemic, and some refused to change the price despite excessive costs and inflation.
The report states that major global brands including: ASOS, H&M, Inditex (Zara), Primark, Aldi, Lidl, Asda (Walmart), Nike, and COSTCO have the highest portion of unfair practices. Meaning that larger brands and retailers are more likely to engage in unfair practices than compared to those with fewer factories. Seasoned industry buyers of the companies purchased from four or more had an 88% chance of unfair practices, and buyers that had purchased from 15 or more factories had a 100% chance to engage in unfair practices.
Brand name mentioned by suppliers
Number of factories producing for brand
Cancelled or partially cancelled orders
Refused to pay for goods already dispatched/ in production
Delayed payment for goods already dispatched to them
When thinking about the incident of 2013, we can see that poor working conditions were just the tip of the iceberg compared to all the shady ongoings of large companies' production out of Bangladesh. The solution calls for the government of countries to have a fashion watchdog to ensure there are no unfair purchasing practices taking place. The report suggested that the countries update and enforce new labor laws. Despite recognizing that many of these countries have wealthy business-minded governments who believe these large companies help their economy.
This shifts the blame onto the government, which is aware these lax laws and minimum wages lead companies to make factories in these countries. Despite having an extremely low minimum wage, "Nearly one in five found it challenging to pay the legally mandated minimum wage for workers in the garment industry.," according to the study. When the government has a history of not enforcing labor laws, corporations keep getting away with more and more abuse; Who is looking after the people of Bangladesh?