H&M's Minimum Wage Fiasco in Cambodia: Report

(Photo: Adam Berry)

A new Swedish documentary alleges that the retailer pays its Cambodian workers $.45 an hour.

Oct 29, 2012

By Misty White Sidell

The Daily Beast

The Swedish brand H&M has recently made headlines for its collaborations with high-fashion designers, such as Maison Martin Margiela, Marni, and Versace.

But last week, a Swedish documentary series cast the international retailer in a new light: as a potential violator of human rights. Kalla Fakta, or “Cold Facts” in English, recently revealed a segment about H&M’s use of underpaid laborers in Cambodia. The 22-minute report (that you can watch with English subtitles here), alleges that H&M's Cambodian workers are vastly underpaid. It claims that the brand uses factories that pay their seamstresses a reported average of $66 per month, representing only 25 percent of a livable Cambodian wage. H&M disputed the episode’s claims, saying that the documentary is riddled with inaccuracies – telling WWD that, “The angle in the program Kalla Fakta is that H&M’s competitors are far ahead of H&M when it comes to implementation of a so-called living wage…This is not correct.” They also told the paper that their brand policy requires factories to pay a minimum wage legally required of their respective country -- just $.45 per hour in Cambodia according to current exchange rates.

But H&M insists that they promote “the ambition that one should be able to live off the salary.” However, the brand rarely lobbies for new and progressive income policies in the countries where they manufacture merchandise.

With nearly perfect timing, a labor strike broke out on the grounds M&V International, one of H&M’s primary Cambodian factories, when Kalla Fakta correspondents (and their cameras) tried to pay the manufacturer a visit. The show captured factory workers peacefully rioting for better wages. “My worrying is making me sick, I don’t know where I’ll get the money,” M&V garment worker Deuar Sophon told camera crews when they visited her decaying home, explaining that she is forced to take out high-interest loans to purchase food. Sophon works an average of 70 hours per week. “Everything I make goes to paying off my debts,” she added.

H&M claims that they’ve “urged” Cambodian officials to raise the country’s minimum wage. But in Bangladesh—another of H&M’s manufacturing hubs—the company has formally approached officials to request a change in policy. “We need to learn more about the conditions in different countries to see how bad the conditions are there,” Helena Helmersson, H&M’s head of sustainability told a Kalla Fakta reporter, claiming that 75 percent of Cambodia’s factories are unionized, giving employees a proper outlet to have their voices heard.

The company reacted on Monday, vowing to ensure better conditions for their Cambodian seamstresses. “Our ambition is clearly set in our Code of Conduct: ‘Everyone who works has the right to a just and favorable remunerations ensuring for himself and his family an existence worthy of human dignity’,” the note read. But considering Cambodia’s current minimum wage requirements, a dignified existence is certainly still miles away. According to H&M, they’re working on it. The company claims that rather than involving government, they’re in direct contact with factory management—although it still seems that they’re perpetuating the problem rather than breaking away from it. “Our aim is therefore to influence the wage issue such that the minimum wage is increased to a level that represents a living wage," a company spokesperson said.