By Mia Shanley
STOCKHOLM (Reuters) - Hennes & Mauritz (H&M) (HM-B.ST), the world's second-biggest fashion retailer, said on Thursday Bangladesh needed to speed up inspections of its garment industry, almost a year after the collapse of a factory that killed more than 1,100 people.
The disaster at the Rana Plaza complex a year ago prompted the Swedish budget fashion chain and other Western brands to pledge to cooperate to improve working conditions.
More than 150 retailers and brands said they would have all of the 1,500 Bangladeshi factories making their clothes inspected by the end of August. But the inspections have been slow to get under way.
H&M's Head of Sustainability Helena Helmersson said Bangladesh also needed to implement a national plan for inspections of the whole garment industry.
"It should not be dependent on which brand is buying at the factory - it should be all factories. They have to put a lot of resources to be able to speed up the inspections," she told Reuters after releasing an annual report on sustainability.
Bangladesh has pledged to boost worker rights and recruit more safety inspectors after the European Union, which gives preferential access to Bangladeshi garments, threatened punitive measures.
But the country has fewer than 200 qualified inspectors and government officials say it will take at least five years to check all factories.
H&M buys about 80 percent of its stock from Asian suppliers, whose low-cost production has helped it build a global empire with more than 3,000 stores in 53 countries. It did not source clothes from Rana Plaza.
Faced with growing competition from even cheaper rivals like Britain's Primark (ABF.L) and U.S. chain Forever 21, H&M is now seeking to differentiate itself by stressing a commitment to sustainability, including using more recycled materials and organic cotton as well as campaigning for better wages.
The company, which has been lobbying officials in Bangladesh and Cambodia to raise minimum wages, laid out a plan in November to pay a fair "living wage" to some 850,000 textile workers making garments for its stores by 2018.
Bangladesh's official wage board raised the monthly minimum wage for entry-level garment industry workers late last year to 5,300 taka ($70) from 3,000 taka ($40) a month and Cambodia has recently implemented a number of wage increases.
"The problem in Bangladesh is that wages have been revised almost every fourth year," Helmersson said. "What we really try to influence is to have yearly wage revisions. As inflation goes up, then also wages have to go up."
H&M has said a drive to increase wages for Asian clothing workers is likely to dent its profitability as weak consumer demand and stiff competition make it hard to pass on costs to shoppers.
($1 = 77.6000 Bangladesh Takas)
(Reporting by Mia Shanley; editing by Emma Thomasson and Tom Pfeiffer)
- Politics & Government