Investors not pushing brands enough to pay Bangladesh RMG workers’ living wages: study

by Apparel Resources News-Desk

12-February-2019  |  3 mins read

Bangladesh Garment Industry
Image Courtesy: thepages.com.bd

Investors should leverage their influence on goals and strategies of global brands to ensure that workers in Bangladesh readymade garment factories get living wages, a latest report by European non-profit Fair Action maintained, recommending further that Nordic banks ought to adopt policies that required companies to ensure that workers in their supply chain were paid better.

According to the study titled ‘Broke in Bangladesh – Nordic Banks and Living Wages in the Garment Sector’, conducted by Fair Action and released recently found that none of the Swedish banks with investments in Swedish fashion brands H&M, KappAhl, Lindex and MQ, who buy clothes from Bangladesh, was doing enough to push for living wages.

Further, according to it, on average, prices paid to suppliers have dropped by 13 per cent, and lead times for production have shortened by 8.0 per cent, between 2011 and 2015, adding that the boom of RMG sector is not reflected in the prices, paid to the local garment factories by international fashion brands.

The fast expansion of the sector has only benefited some elites within the Bangladeshi society, the study underlined while adding that in total, the banks hold shares worth over € 1.4 billion in H&M alone.

The banks are Danske Bank, DNB, Handelsbanken, KLP, Länsförsäkringar, Nordea, SEB, Skandia, Storebrand and Swedbank as well as four savings banks (Sparebank 1 Nord-Norge/ SMN/SR/Östlandet).

“As large owners they have a unique opportunity to influence the company’s goals and strategies concerning living wages,” the report said adding, “None of the banks in this study with investments in H&M, KappAhl, Lindex or MQ is doing enough to push for living wages….”

It said that H&M is committed to making sure that the company’s strategic suppliers should have pay structures in place to pay a fair living wage to 8.50 lakh workers by 2018 but the banks had not taken the opportunity to follow up on whether the promise had led to actual wage increases at H&M’s suppliers in countries such as Bangladesh while as far as KappAhl is concerned the company was yet to set any clear goals or strategies concerning living wages, the study said.

It also said that the MQ had not published data on the development of average wages at suppliers, nor did they set any clear goals or strategies related to raising wages in its supply chain.

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