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

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 study published on Wednesday. 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, LidI, 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. It also found that 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”.