H&M aims to pay all textile workers "living wage" by 2018

Reuters

* Protests over wages shut factories in Bangladesh

* H&M to start on fair wages plan with three model factoriesin 2014

* H&M hopes higher wages to boost productivity

BERLIN, Nov 25 (Reuters) - Hennes & Mauritz, theworld's second-largest clothing retailer, laid out a plan onMonday to pay a fair "living wage" to some 850,000 textileworkers by 2018, saying governments were acting too slowly.

"We believe that the wage development, driven by for examplegovernments in some countries, is taking too long, so we want totake further action and encourage the whole industry to follow,"H&M said in a statement on its website.

H&M sources most of its garments from factories in Asia,particularly Bangladesh, where a factory collapse in April thatkilled almost 1,130 people put pressure on big brands to improvethe working conditions of those making clothes for the West.

H&M, which did not source from that factory, was the firstcompany to sign a Europe-led safety pact for Bangladesh garmentfactories after the collapse. It has urged Bangladesh andCambodia to raise the minimum wage and revise it annually.

Violent protests over pay have forced the closure ofhundreds of Bangladeshi garment factories in recent weeks eventhough factory owners have agreed to a proposed 77 percent risein the minimum wage.

Rock bottom wages and trade deals have made Bangladesh'sgarments sector a $22 billion industry that accounts forfour-fifths of exports, supplying retailers such as Wal-MartStores Inc, and Primark as well as H&M.

About 3.6 million of Bangladesh's 155 million people work inthe clothing industry, making it the world's second-largestgarments exporter behind China. Around 60 percent of garmentexports go to Europe and 23 percent to the United States.

H&M said it would support factory owners to develop paystructures that enable a fair living wage in two model factoriesin Bangladesh and one in Cambodia in 2014 and then scale up themodel to the 750 factories it works with by 2018.

It wants wages to be negotiated annually and reviewed bydemocratically elected trade unions or worker representatives.

Helena Helmersson, global head of sustainability at H&M,made the commitment at a conference on living wages in Berlinorganised by the Dutch and German governments.

"We are willing to pay more so that the supplier can payhigher wages," H&M said. "We believe that our purchasingpractices will lead to better efficiency and productivity."

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