1. Company Profile H&M.

Hennes & Mauritz (H&M) is the largest fashion chain in Sweden by sales and has developed successful retailing subsidiaries in many European countries, making it a major international retail brand. The business was founded in 1943 by Erling Persson as a chain of stationary shops but switched to clothing in 1947. The Hennes of the name is the Swedish word for 'yours' and the Mauritz the name of a small chain of shops which were acquired in the early days of the business. H&M is a publicly quoted company but control is firmly in the hands of the Persson family with Stefan, the son of the founder, being chief executive and managing director. The family as a whole owns 70.0 % of the voting rights and 38.4 % of the capital stock of the company, which remains based in Sweden but controls the growing international network from H&M International's offices in the Netherlands (Den Haag). The business has managed to weather the recession in both home and foreign markets since 1990 and reported record 1996 sales of Skr 17,212 mn, of which 76 % (Skr 13,085) was generated outside Sweden. There were 443 stores in the European network at the end of 1996, of which 117 in Sweden and 326 in foreign markets, with group employment amounting to 100,469.

While expanding in Sweden during the 1960s , H&M also moved into Norway (1964) and Denmark (1967), but waited until 1978 before entering Switzerland and entered Germany in 1980. An initial move was made into the United Kingdom, too, in 1976 but the other markets mentioned above expanded far more quickly. The Netherlands (1989) and Belgium (1992) followed, with Austria being the last on the list, in 1994, just prior to that country joining the European Union. In 1995, Germany overtook Sweden in terms of sales, with further outlet expansion planned for that country in 1996 and 1997. Sales outside Sweden exceeded those in the domestic market for the first time in 1990 and, while turnover in Sweden has increased by some 50 % since 1986, the level of foreign sales in 1996 was 7 times that of 1986 (Skr 1,871 mn). H&M was not spared the effects of the significant downturn in comsumer spending in 1995 in its home market and operating profit for the group fell by almost Skr 250 mn to Skr 1,449 mn in 1995. But this was recouped a year later when operating profit rose to Skr 2,034 mn. As evident, H&M enjoyed an excellent year in 1996 with group sales rising by 18 % to Skr 17,2 bn, and net profits by 37 % to Skr 1,3 bn.

H&M: Group Sales, 1986-1996
(Skr mn, incl.VAT)

H&M: Financial Performance, 1990/91 - 1995/96 (Skr mn).
Year to end-November Sales Of which:

Germany is the companies major market, followed by Sweden and, at some distance, Switzerland and Norway.

H&M: Sales by Country, 1994/95 - 1995/96
(Skr mn).

In the five years before 1994 H&M grew rapidly and opened 116 new stores and profitability improved successivily. During the 1990s sales have doubled. While expanding, the administrative resources increased only marginally, which enables them to remain flexible. The countries with H&M stores do not operate independent from the Swedish headquaters, all currencies are linked to US Dollars and the Luxemburg Trading and Insurance office takes care of an efficient handling of different currencies. They normally buy in U.S. Dollars and currencies linked to the dollar.

At the end of 1996, there were 443 stores of which 117 were in the domestic market, following an aggressive opening/acquisition policy during the year which saw entries into new markets (Luxembourg and (via mail order initially) Finland).

According to the Magazine Textil Wirtschaft (12-2-98) in 1997, 25 new stores in Germany were opened. H&M reports 1997 profit up to SKr 1.69 bn., while the period before profit was SKr 1.33. Gross turnover rose from Skr 17.2 bn. to SKr 21.3 bn. in 1997 and net turnover which rose from Skr 14.6 bn. to 18 bn. H&M opened a total of 56 new outlets in 1997, while closures resulted in a net 47 new outlets. In Finland in 1997, 5 new stores are opened. In 1998, the company plans to a further 56 new stores, including its first outlet in France, and 20-25 in Germany. According to Information Acces Company 1998, H&M will open its first three stores in Paris this month, and will open further stores in France later this year. France is the only major market in Europe without H&M stores until now. Here is also mentioned that H&M is planning for 1998 to open new outlets in Turkey.

H&M: Outlet Trends, 1990/91 - 1995/96 (No.).
Year to end-November Outlets Of which:

H&M employed a total of 10,469 staff at the end of 1996. Only 26 % of these were in the Swedish retail network (2,798) with employees in other European countries including 2,727 in Germany, 936 in Norway, 880 in Switzerland, 832 in The Netherlands, 627 in Denmark and 357 in the United Kingdom.

H&M: Employees, 1990/91-1995/96.
Year to end-November Employees (average no.)

Although the company says very little on the subject, the Swedish network in fact contains 19 (November 1996) Galne Gunnar stores of which the first opened in 1988. These offer budget-priced ends-of-lines of clothing, household goods, some food and, indeed, any job-lots of consumer goods which the company can negotiate. Seperate sales statistics for Galne Gunnar operations are not provided by H&M and there is nothing within the stores to connect the name with the H&M parent company.

H&M runs a seperate mail order company, H&M Rowells AB, based in Boras, alongside its retail business in Sweden and also has mail order operations in all the main European markets where it is active. In 1994 and again in 1995, this area of the company's business suffered from poor trading conditions. The H&M Rowells subsidiary had sales of some Skr 600 mn in 1995, including a contribution from the Norwegian market where it also operates. The performance in 1996 is claimed by the company to have been 'positive'.

According to Information Acces Company (29-01-98), H&M is to start mail offering service in Denmark through its subsidiary H&M Rowells. The mail order is already started in other nordic countries and includes 2mn household clients.

The successes of H&M in Europe are mainly build on three principles, to sell very fashionable clothing, for a low price and fast changing collections. It is the company's policy to convince its shoppers that they cannot buy cheaper elsewhere anything they can find in a H&M outlet.They want to deliver fashionable goods for a low price and good quality. They aim to offer the public the least expensive products within its own segment, which is the middle segment to which as well C&A, and P&C belong, and which has the largest number of customers.

The garments produced are meant to be worn for 2-3 seasons. Its strategy is to take a strong, quick presence in the markets were it decides to operate, targeting the individual main cities and often opening several outlets in each one in quick time. The 326 foreign outlets open at the end of 1996 were located in 149 cities, Geneva, for example, having no fewer than 8 H&M stores.

H&M: Outlets in Non-Swedish Markets, 1996.

Company Structure:

Sweden

|

H&M International Holland

________|__________________________________

Norway, H&M Holding Holland, Switzerland, Reinsurgance Luxemburg

____________________|__________________________________

Germany, England, Denmark, Holland, Belgium, Austria, Finance Trading Luxemburg, Switzerland

|

HongKong

The headquaters in Stockholm coordinate and manage the international company, here the most important divisions are located, the higher management, design, purchasement and marketing. Every country has its own production office, which functions more or less autonomously and is responsible for the outlets in the country. The country manager is responsible for the profit rates in his country. These production offices and country managers have contact with the main office in Sweden on a regular basis. H&M's company structure is marked by a decentralised system of decision making with a strong central management. Between management level and consumers are little levels of hierarchy. Because purchasing is centrally organised by the head office which is located in Sweden. Swedish laws and regulations are determinant; other countries do not have much influence on buying policy.

According to the Key Success driver Analysis (The 1997 KSA Study of Success Drivers in European Retailing) H&M is sixth on the list of European retailers (measured were; 20% Sales growt, 25% ROS, 40% ROCE and 15% Cash flow).

H&M does not manufacture any clothing itself. It does, however, work with a number of manufacturers across the world to produce inexpensive but very fashionable merchandise, often adapting high fashion for mass-market consumption. Through its substantial purchasing volumes, all channeled through its head quaters in Stockholm, H&M can negotiate the very lowest prices from its suppliers, although the merchandise throughout the company's European network of stores is not identical. Local preferences in colour, style and taste are adhered to. H&M sources its merchandise from within Europe (including Eastern Europe), the Middle, Near and Far East and maintains a network of purchasing and 'representation' offices in countries such as Hungary, Turkey, Portugal, Romania, India and Bangladesh, China, Hong Kong and South Korea. Latest newsflashes reveal that the economic crisis in Asia benefits H&M as the falling value of the currency will reduce importers purchasing costs.

H&M has special policies regarding quality care of their products. The requirements are settled in Sweden. They work according to a list of requirements which producers have to agree with. In private laboratories in Western Europe H&M measures and tests the fabrics used in their products. The annual report mentions that H&M demands high standards of quality control, which often override the requirements that have been established by producing countries.

H&M entered Austria in March 1994 and opened its first three stores in Graz, Linz and Vienna. During the first year's opereation in Vosendorf (umlaut op o) alone, it was reported that the store achieved sales of Sch 320mn and total company turnover in 1995 was Sch562 mn, from seven outlets. At the end of 1995 H&M acquired the 8 small variety stores operated in Vienna by Globus of Switzerland. Two were closed and the others converted to H&M outlets with additional expansions in other cities in prospect. On 1st january 1997 store numbers had increased (by 12 during the year) to 19 and 1996 sales had soared to an estimated Sch1,945 mn (Skr1,193mn). A new warehouse has been planned to accomodate the axpansion.

H&M has been on the Belgian market only since 1992 and has 24 stores there (plus one in Luxembourg opened in 1996). Sales in 1995 are estimated to have been Bfr 2.670mn, rising to Bfr 3,675 mn in 1996 on the back of an aggressive store opening programme which saw the addition of 7 new outlets during the year. While Belgium is one of the smaller markets for H&M (sales in Switzerland are twice as high), it is one of the most rapidly developing. The merchandise is entirely made up of inexpensively priced fashionable clothing and swimwear for young women. There are around 445 employees in H&M's Belgian operation.

H&M entered Denmark in 1967. At the beginning of january 1997 there were 38 outlets located in 23 cities, generating sales of Dkr 925 mn (equivalent to a market share of some 4 %), with 627 employees. Pre-tax profit in 1995 was Dkr 58.3 mn, down 41 % on the previous year. Like Sweden and Norway, Demark represents an almost mature market for H&M, although a further two outlets were opened during 1996 and four are planned for 1997.

H&M entered Germany in 1980, since when it has become the most important market for the company, contributing some 30 % of sales turnover within the group and accounting for 26 % (2,727) of group employmees. After a slow start, by H&M's standards, it has acceleratedoutlet openings during the 1990s and opened its 100th store in Leipzig in early september 1996.

Hennes & Mauritz: Sales and Outlet Trends, 1991-1996.

In Germany, the company is conscious that it has created a very youthfull image for itself and some stores are currently offering higher-priced goods targeted at an alder clientele. H&M is a successful self-publicist but spends less than 10 % of its sales in germany on advertising and publicity. Its striking poster advertising has contributed significantly to broadening its costumer base and to keeping costumers coming into its stores while its competitors, in general, are suffering.

In 1989 the company started in the Netherlands with 11 stores. In 1996 38 stores were located in the Netherlands. In 1996 turnover in The Netherlands was 270 million guilders.

In the Netherlands H&M is a part of the MITEX federation (which is the organisation for small- and middle sized textile companies), instead of being part of VGT (the organisation for large textile companies) of which Vendex, C&A and Peek en Cloppenburg are members.

• Baby Baby/ Newborn
• Logg
• Children's Department
• Rocky Girl
• Rocky Boy/Jeans
• Impuls
• Clothes
• Hennes
• Woman
• BIB
• Mama
• Mauritz
• Uptown Classic
• Contemporary

2. Reasons why H&M was selected for the Forum, what Angle is used in the case of H&M for the International Forum in Brussels and reasons why this angle was taken.

H&M is one of the biggest and fastests growing retailers of Europe. They have quickly changing collections in large quantities which are sold for a very low price on the West European market. Their goods are made in countries with low basic salaries, and, until recently, H&M has not exercised any influence or shown any interest in the labour conditions of their employees outside Western Europe. "Until recently" is explicitly stated above, for H&M is getting more conscious of the situation they create in Southern countries and has developed a Code of Conduct.

The Clean Clothes Campaigns in Sweden, Germany, Belgium and the Netherlands focused some of their organisational efforts on H&M production methods. The report "Profiles of Garment Exporting Companies in Bangladesh and the Philipines" by Ineke Zeldenrust and Janneke van Eijk in September-November 1995 can be considered a starting point (see section 5). In 1996, CCC the Netherlands organised various street actions in Amsterdam to raise public awareness. Amongst others, an event to raise public awareness took place in front of the entrance of H&M. H&M was not pleased with this event.

According to H&M, they drew up a set of rules for producers in 1994. It is not completely clear wat these orginally entailed, also since H&M gave different replies to questions in different countries. The standard contract which was used prohibited child labour. This standard contract stated that producers had to comply to local laws and that H&M had the right to unannounced checks of the premises. The annual report of 1996 mentions that H&M has never made use of child workers; if such would be the case, the contract with the producer would be interrupted immediately.

In 1996 and in the beginning of 1997, CCC Belgium undertook various actions to raise consumer awareness about exploitative working conditions and child labour. Evidence was presented concerning Bangladesh (see further in the profile). In response H&M Belgium sent the CCC Belgium a letter in which the company stressed that the accusations were unjustified. H&M stated that the issue of labour conditions were of utmost importance, and that the company wanted to improve the well-being of its workers. H&M stressed hereby that it does not own any factories itself, but co-operates with suppliers in a flexible manner while maintaining rigid standards. With regard to childlabour, the company referred to the UN convention on the Rights of a Child, art. 32:1, and to ILO convention No. 138 which the company expects its producers to comply to. Furthermore, H&M requires its producers to respect the legal laws of the country. Finally, H&M stated that it has a series of criteria which enable the company to control whether a producer respects the requirements of H&M concerning workers- and children's rights. When a producer does not respect these criteria, the contract will be terminated. H&M mentioned that in co-operation with FEDIS (Belgian Federation of Distribution Enterprises) and with other large textiles retailers they are working to establish a code of conduct.

The Clean Clothes Campaign Germany started a protest letter campaign towards H&M and C&A, concerning its labour conditions in factories in low wage countries. CCC Germany printed 150.000 protest postcards.

On march 12, 1997 Mathias Geduhn of H&M Germany sent a letter to Monika-Maria Kramer of Christliche Initiative Romero in response to her questions of CCC Germany, 10 march 1997, regarding labour conditions in companies supplying H&M. This response was very similar as the one of H&M Belgium towards CCC activities. He states that working conditions in companies producing for H&M should be according the national requirements of the producing country. When these are insufficient, for instance in the case of child labour, H&M follows international conventions of the UN and the ILO considering child labour. Besides that, H&M has its own requirements, which the company negotiates with its suppliers, and which have to be signed in a written agreement. In this document is agreed that the companies pay the legal minimum wage or higher. To be sure that requirements are respected, local bureaus are controlling the local suppliers. H&M remains the right to implement unexpected controls in every place at any time. When the company notes that the H&M requirements are not respected, the cooperation with the supplier will be ended immediately.

Evidence of violations of basic labour rights by H&M supliers however kept coming up. In the summer of 1997 CCC Sweden had contact with H&M about specific cases where suppliers broke local labour laws in Bangladesh and in Bombay, India. There was some exchange of views with CCC Sweden and Jörgen Andersson (head Purchasing) and Max Felixon (Purchasing manager). Mr Andersson mentioned contact with Save the Children Sweden, with reference to child labour. Mr Andersson told that H&M was working on organising questions considering working conditions. H&M was not prepared for these issues. Different H&M representatives said different things. For instance, Mr Andersson said they do not end contracts immediately if something is wrong. They make time tables for change. Mr. Felixon said they did end contracts immediately if something is wrong.

After the television documentary (see section 3 of this report) in Sweden had shown child labour practices in the Philipines, the director of H&M was shocked and reacted soon after broadcasting. He re-stated that his company is firmly anti-child labour and mentioned their subscribance of the UN human rights convention regarding child labour. In accordance with this they called upon their clothes producers to sign a treaty in which is stated that they have no children working in their factories.

By now however it was clear more needed to be done. They started working on their own code of conduct.

On December 10, 1997, CCC Germany had a meeting with H&M, during which Mrs Schullström presented the new code of conduct of H&M. Mrs Ingrid Schullström explained the H&M philosophy, in which demands of consumers, quality, and social conditions have a high rank. CCC emphasized their interest to cooperate. Mrs Schullstrom said that all these principles shall be implemented in all contracts with their suppliers. In detail they discussed the situation in Bangladesh (late payment; excessive overtime; H&M lacking written labour contracts and security questions), in the Philipines (Eastar Export), in Madagascar en Mauritius (low wages), and in the China Guadong Zone (lacking labour contracts; social security issues and forced overtime). CCC Germany and H&M also discussed independent monitoring. H&M does not see a possibility in monitoring as suggested by CCC, but considers the possibility of an independent third party (an accountant) as a control mechanism as a better option.

In a letter regarding the 10 december meeting of the German CCC and H&M, Carolin Schmidt of H&M Germany writes H&M is willing to co-operate with independent monitoring, under conditions that related governments, federations of exporters, NGOs, and control organisations are represented in such teams. The mission of this team will be to control systematically all registered textiles companies in every country. A Guideline for companies , containing a list of companies who are working according required criteria and who are not, would be very useful. When a producer, co-operating with H&M, does not comply to the required criteria of this inspection list, H&M is willing to address efforts to take corrective measures to improve the situation or to terminate the business relationship. H&M will actively work on improvements and will execute control. Their own Code of Conduct as a blueprint of the company' philosphy could be a viable possibility.

The newly developed Code of Conduct of H&M (developed in december 1997) is one of the important points within this case. There are several examples of previous developed Codes which can be used as models to value the H&M Code of Conduct. For example some significant differences can be seen between the H&M code of conduct and the code of conduct as proposed by the Clean Clothes Campaign (CCC), offered to H&M both in Belgium and in Sweden.

Below some of these differences are summed;

• H&M's code of conduct mentions that suppliers should always follow national laws of producing countries, while CCC's code of conduct uses international conventions designed by the ILO and the UN as a basis.
• The code of conduct of H&M mentions legal minimum wages, while the CCC code mentions a living wage, which provides for basic needs.
• H&M's code of conduct does mention the right of workers to join associations of their own choice, while the code of conduct of the CCC also mentions the right to set up an association.
• Considering wages and working hours, the H&M code mentions in 4.2.2. that working time must not exceed the legal limit, while the CCC code is more specific, and mentions that workers should never be required to work more than 48 hours on a regular basis, and that overtime may not exceed 12 hours a week. Furthermore, workers have the right to one free day in a 7 day workweek.
• Implementation and Monitoring is another difference, how will H&M observe the regulations stated in their Code of Conduct and will there be independent monitoring.

In the beginning of this year CCC Sweden had a meeting with the Swedish garment retailers. Among the company representatives was Ingrid Schollström, (head of Quality Control) of H&M. Before the meeting the companies got a 30 page proposal from the campaign about their Code of Conduct with independent monitoring. In detail the proposal explained what steps companies can take and how an independent foundation to oversee the monitoring could be founded and start in Sweden.

After the meeting CCC Sweden got a letter of H&M, answering their proposal of starting a foundation for independent control. H&M thinks it is still too early to start, they are in favour of social accountants that report directly to H&M and does not favour the proposal of a foundation made up of NGOs and trade unions. According to K. Bjurling, H&M is ready to make demands on suppliers (they already demand signatures on their code from suppliers), but not ready to have NGOs and trade unions demanding from suppliers on behalf of H&M to make changes.

On February 5, 1998, CCC Belgium organised a seminar in Gent, and established new contacts with H&M. The aim of this seminar was to share information and to unite members of the CCC. H&M was also invited and their representatives were confronted with a video of a factory producing for H&M with miserable labour conditions. H&M explained that this was an accident, and explained also that they already took some initiatives to improve the situation in rthis company. Regarding unannounced visits they said it sometimes happened, but often it was not possible. They need extra personel who efficiently perform control. The CCC insisted that information was given to workers and that the Code of Conduct should be implemented. H&M responded that they were busy with translating the code and making informative posters, aiming better knowledge among workers in the factories.

Consciousness raising in companies is regarded by H&M as a difficult task, for not many managers are willing to take their responsabilities.

Lately H&M is developing their environmental policy further as well. In Belgium and Sweden H&M discusses with various environmental organisations. In Sweden a steering committee has been established to design a set of requirements regarding the environment.

3. Collection of proof and examples consisting of research and witnesses' reports of companies that produce for H&M.

In August 1997 researchers from SOMO (Center for Research on Multinational Corporations), the Netherlands visited Mauritius and Madagascar as part of a bigger research program on the labour conditions in the garment export industry in African countries. On Madagascar one factory and on Mauritius 3 factories were visited who produced for H&M. A manager of a factory that used to do orders for H&M stated that H&M was not sourcing from them any more as they moved to Madagascar (where wages are lower, conditions worse and unions much weaker).

The EPZ sector in Mauritius started quite early in the 1970s and covers the whole island. From the start of the EPZ employment was increasing due to the success of the sector. Nowadays Mauritius is losing cheap labour to other countries like Madagascar and Mozambique and since 1990 the workforce in the EPZ has decreased from 100,000 to 76,000 (of all workers in EPZs, 90% works in the garment producing companies). There is a special labour law for Mauritanian EPZs which states that for the EPZ's the normal working week of 45 hours can be expanded with 10 hours compulsory overtime. The minimum wage is too low to cover basic life necessities (is about 68 rupees per day ~ 3.10 $). Unions are allowed by law, however unionisation is low as people are afraid to join unions and a lot of companies discourage their workers getting unionised. As strikes are forbidden by law, which impedes unions to function properly, they miss pressure tools. There are, according to an official listing, 5000 Chinese contract workers in Mauritius on a contractbasis for 2 or 3 years. They work long hours, mostly 7 days a week. They live in cramped quaters, don't speak the languages used in Mauritius which pushes them in isolation and they have limited possibilities to change their situation as their is always the chance that they will be send back to China. There are also workers, although fewer, in the EPZ from Pakistan, the Philipines, Bangladesh, Madagascar and Malaysia.

Only since 1989 Madagascar's Export Processing Zones really took off. A lot of factories are established by Mauritian factories who relocate here part of their labour intensive prododuction. The EPZ's in Madagascar are not restricted to certain areas, every factory can have an EPZ status and all the factories that produce garments for export have this status. The normal labour law is also applicable to the EPZ's. The problem however is that these laws are hardly observed in the EPZ's and the workers and the unions miss the instruments to compel the observance of these laws. Overtime is a real problem, especially in peaktimes. Often workers have to work the whole night through, and even the next day, sometimes even more nights in a row. The unions are protected by law but are in reality powerless for companies have no obligation to negotiate with unionleaders (only 2 garment factories on Madagascar have a Collective Bargaining Agreement (CBA)). The basic salary is 120,000 FrMg (about 24 US Dollar) a month, which does not provide a living wage.

Floreal Group

The Floreal Group exists since 1972 and is part of a holding fully owned by one Mauritian family, which owns also other garment producing companies. The Floreal Group consists of 2 different companies (and a mill) which both have several factories. In total about 80-85,000 people are working for the Floreal Group on Mauritius, about 4000 on Madagascar. The Floreal Group constantly buys and sets up factories, in Mauritius as well as in Madagascar (and they are thinking about other countries too). They were among the first Mauritian companies to relocate part of their labourintensive production to Madagascar. Their biggest market is Europe and they deliver to, among others, H&M.

Floreal

The avarage wage is around 2300 rupees per month, with a minimum of 1800 rupees according to the manager. There are however workers in this factory who earn the minimum wage. The workers get a 13th month and transport is paid (this is according to the law). They work 10 hours a day, including breaks . Overtime is sometimes compulsory but not often. There are 2 unions in the factory, there is a CBA and negotiations every 2 months.

Floreal employs 300 Chinese workers The women work seven days a week. Monday through Friday they work from 7:30 a.m. until 11:30 p.m. Saturdays they work until 16.00 and Sundays till noon. Their 30 minute dinner breaks and their "time off" are spent at housing facilites provided by the company. Women live literally stacked on top of each other, 4 to 8 per tiny room. When researchers were able to get past the gates and visit these housing facilities they found not only cramped quarters, but dirty concrete showers and squat toilets which stank. For a recent report from a local NGO which works closely with the Chinese migrant worker community, see the Appendix.

The manager tells that with reference to certain social standards buyers just send their forms to him, he fills them in and sends them back. Even if agents from the buyer come over they come into the office and never look at the workfloor, at the toilets or at the quarters were the workers live.

Tropic Mad

One of the factories that produces for Floreal on Madagascar was included in the same research. The manager tells there is no compulsory overtime, the factory has to ask permission for overwork from the labour office (Overwork can be maximum 1.5. hours a day, not exceeding 20 hours a week). A worker states that the targets are very high, if they don't make the targets they get a warning, after several warnings they will get fired. She also states that normal working days are 8 hours but with a lot of orders she works 12 hours a day and the weekends. Especially in the finishing department overwork is excessive, sometimes even the whole night through. No exceptions are made for pregnant women. Overwork can not be refused. According to the manager protection equipment is given, mouthcaps and steel gloves, a uniform and haircaps. But the worker says she is not provided with a mask nor a haircap, only with a uniform. And as the researchers of SOMO also observed themselves in the factories, there is a lot of dust and it is very hot. The workers sit on stools or have to stand all day. A lot of the workers are always very tired and have problems with their lungs. The manager says that workers are paid piece rate, with a guatanteed minimum and lunch everyday. According to the worker bonusses are paid but when someone is 5 minutes late the whole attendance bonus is gone. Salaries do not cover basic life necessities. The manager mentions a salary of 200,000 FrMg (40 US dollar) but according to the worker this can only be earned with excessive overwork. There is a union in this factory, at the time of the visit there are disputes with the management about low salaries and the excessive overtime. There is a CBA.

According to the manager they have an extended quality control system. They get a lot of pressure from retailers in Europe about human rights, trade unions and security. Most buyers have agents in the region and come once or twice a year. According to one of the workers sometimes clients come to the factory but they do not talk to the workers, do not check the toilets or the canteen.

2 other factories in Mauritius

I is one of the biggest garment factories in Mauritius. They produce sportswear and fashion clothes for Europe. They employ 2400 people. According to the human resource manager they pay more than the official minimum wage, however, still not enough to live properly according to a union member. Overtime is compulsory and often more than 10 hours. During the peaks they work often till 10 pm, or on Saturday and sometimes even on Sunday. There is no hygiene on the toilets and they have to ask permission to go. Payment is never on time. There is no health insurance, if someone is sick more than the annual days he or she gets nothing. Some 500 workers are members of the union. They employ Chinese and Sri Lanka workers in this factory.

The manager tells the researchers;"we are not afraid of codes of conduct", Mauritius is much better as other countries.

II produces only for H&M. H&M orders big quantities here; as the profit margins are very low, only through the large quantities profit is made. They ship all the clothes to Germany, from where it goes in all directions. They have been working with H&M for over 10 years now. The average wage is 4000 rupees according to the manager, this is so high because of the piecerate system. They have no other bonusses than the ones prescribed by law as the piecerate should give an incentive. Overtime depends on the orders and will be especially extensive in the sewing and packing sections. The factory is very full, packed with boxes and piles of clothes. There are only a few striplights and some small windows which makes the lights in the factory completely insufficient. Fire extinguishers are not visible, nor is there an emergency exit. There are about 70 Indian workers in the factory. In an interview with some Indian workers they tell that they work 5 days a week from 7.30 am till about 10 pm. On Saturdays and Sundays till about 6 o'clock. This makes about 93.5 hours a week. One worker tells he earns between 4000 and 7000 rupees a month. There is an union in this factory.

H&M tests the products made at Hong Kong Garments and according to the manager they are very satisfied with the quality. The factory sends samples, which are tested on quality, dyes, etc. H&M never comes to Mauritius to control the factory or the quality directly, H&M never asks for specific standards.

The following company profiles in Bangladesh are based on the report: The report "Profiles of Garment Exporting Companies in Bangladesh and the Philipines" by Ineke Zeldenrust and Janneke van Eijk in September-November 1995.

Azim Group, Dhaka

Total labour force of the Azim Group is 6.182. H&M buys through Hong kong and has a local office in Dhaka for quality control. CCC visited one factory with two names that is part of the Azim Group, namely; GK Garments and Global Fashion Garments (1000 workers), in 1995. Global Fashion Garments is another name for GK Garments seated in Sabar, 20 km outside Dhaka. . There is no union. According the manager basic wages are 1500-2000 taka a month (30-40 guilders) for a trained sewer, and 1000 taka for a helper. According to the workers a trained sewer receives a wage of 450-900 taka (10-20 guilders), and helpers 350-500 (± 10 guilders) taka, a supervisor makes 2200 taka (± 25 guilders), including overtime and bonusses. According to interviews with workers wages are basic minimum wages, maternity leave is 90 days, of which 50 % is paid.

In Dhaka CCC visited a second factory of GK Garments (350 workers). This fabric makes shirts, dresses and nightwear and here as well H&M is a big client. The fabric is hot, dusty, and crowded with security guards. All workers have white dust in their hair and on their clothes. The wages are even lower.There is one emergency exit with one fire-extinguisher. The workers work 8 hours a day, sometimes 10 or 11, 6 days a week. No union is allowed in the company. According to the manager a union only serves to abuse the country.

On April 30 1997 H&M reported to CCC Belgium that it stopped co-operation with GK Garments and Global, which were investigated by the CCC . H&M did not find irregularities at Global. Later H&M found out that GK Garments and Global were part of a group of enterprises were more irregularities were discovered, H&M decided to terminate co-operation in accordance to it's rigid policies.

This is not the aim of the campaign, and H&M was prevailed upon to start working towards improving labour relations in discussions with representatives from the Clean Clothes Campaign in among others Belgium and Sweden. As recent as 1997 however a factory, located in Dhaka, producing 50.000 shirts for H&M was described by Neil Kearny from the ITGLWF (International Textile Garment and Leather Workers Federation, as violating many Bangladeshi laws. Wages are below the legal minimum and working hours are exceeding the legal maximum. The general secretary from the National Garment Workers Ferderation of Bangladesh will give evidence on the current situation in the sector.

The Dutch India Working Group and SOMO did research in India in 1996. Evidence from several factories visited in India has demonstrated various problems concerning labour conditions. Two H&M suppliers in Bombay were visited in May 1996. It was found that the suppliers have their production in small sweatshops in the slum area of Bombay. It was extremely hot, dusty and crowded and very badly ventilated. The suppliers made short-term contract with 9-10 sweatshops. The workers slept in the same place where they worked, by their sewing machines and could possibly reach 2500 rp a month if they work hard (about 12 hours a day was not unusual). The management had never heared any demands on working conditions. H&M checked this and according to them they only buy from one of the suppliers' factories, which is located in Bangalore, were they visit often. But H&M could not promise that these sweatshops did not supply "their" factory in Bangalore with items. H&M has now employed a special person to work with these issues.

Royal Exports, Bombay. Visited September 1995.

All of the products of this company are exported to Europe, H&M is one of the main costumers which operates via middlemen. The company employs 30 workers, of which 10 are women. According to the director minimum wage and above is paid, normal average wage. Overtime only occurs when an order has to be finished, this does not happen often. There is no collective bargaining an there is no union in the factory. One worker who is asked some questions gets suspicious and stops answering questions. According to the director of the company sometimes they have to subcontract and child labour cannot be controlled in these circumstances.

AKR Tex, Tirupur, India. Visited November 1995.

In this company which is a supplier to a corporation in Mumbai called Texool Corporation, work around 200 to 300 people. H&M buys here through there agent in England. The production process is split and takes place in seperate rooms. In one department the sampling and cutting is done in another room the garments are checked and ironed. In a seperate room the garments are stiched and dirt is removed from the fabrics. Than in another room the ready made garments are packed. In all the different rooms, children are at work. They do simple tasks like carrying bundles of clothes from one room to another. In every room around 4 children are assisting the adult workers. None of the children are behind the stitching machines.Everywhere children sit on the floor arranging and folding the clothes. The manufacturing rooms are spacious with sufficient light but ventilation is lacking. mainly adult males stand in these rooms for 12 to 16 hours per day.

In March 1998 a CCC/SOMO research was conducted on working conditions in 25 Romanian garment factories.

Untill 1991 the garment industry in Romania was divided into two segments; on the one hand there were companies producing for export on the other hand there were the so-called county industries, the later producing garments for the local market. Trade relations were maintained by a special departments of the trade ministery, the one responsible for garments was called CONFEX.

Since 1991 most of the garment factories have been privatised and many private, so-called "newly born" companies were established.

The transformation to a market economy requires big changes in company policies. There is an old joke: " we pretend to work while the state pretends to pay".

The old state owned factories face many problems;

• for the first time in their carreers factory managers have to make sure they get orders themselves,
• factories existed to create jobs in the first place, now their main aim has to be to make profit,
• many of these companies produce both textiles and garments; because the amjority of the clients place orders in lohn system, the textile units often produce at a loss,
• the interest rates are extremely high; factories are stuck with very old, inefficient machinery
• the loss of the USSR market was a big loss, now it is an unsafe market to rpoduce for.

At the moment all factories which were visited produce for export only. Managers explain that producing for the home market is not viable at all, simply because the buying power of the Romanian people is too small. The main share of production is exported to Western Europe, especially to Italy and Germany. Some producers export to the USA.

Almost 100% of the orders are placed in "lohnsystem", meaning that buyers deliver all materials to the producer. On the one hand factory managers see this as a good system because they cannot afford to buy the materials. On the other hand, it leaves the Romanian producer with a very low profit margin.

The main problem which workers face is that wages to not reach the level of a living wage. The legal minimum wage for the light industry is 600.000 Lei, bruto, which is 325.000 Lei ($40,-) netto. Different workers and trade union representatives said a living wage of a family consisting of 2 adults and 2 children is 2.000.000 lei per month ($250,-). According to the labour law overtime hours should be paid 200%, in most cases workers earn the same rate for overtime. A normal working week is 5 days, 40 hours. Many workers complain that targets cannot be reached in a 40 hour work week. In all factories there is a regulated basic wage. In case a workers doesn't reach the target she doesn't make this basic wage

In all factories a small part of the workforce are men. They ussually work as technicians and cutters. All managers and trade union representatives claim that wages are the same for men and women. A striking difference is that in factories where women work in the ironing section this is a low paid job because: "the job doesn't require any skills", in other factories only men work in the ironing section there the wages are relatively high because: "ironing is a heavy job".

Romania has 4 big garment workers federations. Unions are organized on the factory level. 20 members are required to establish a union. According to the law on trade union organization individual membership is not possible. In most of the former state owned companies unions are organised. Here workers have a strong awareness of their rights as laid down in the labour law. In private companies the management won't allow a union although this is unlawfull they get away with it. Besides, many workers feel that in a private company it's possibble to earn a higher wage but in exchange one has to agree with a higher workpressure, more working hours and less rights. One trade union representative stated: "unemployment is high and people are afraid to loose their jobs, they don't see their own power".

Many older women workers feel threatened because of a company policy to hire younger women all the time. If these women complain about bad conditions a manger bluntly says: "take it or leave it, you won't get another job anyway because you're too old". There are big differences between regions in wages and work relations. A big share of the garment factories are placed in Bucharest, here wages represent the average of the country. The north-east is very poor and the south-west is obviously the richer part of the country which can be found back in wages and working conditions. In Sibiu, a city with a long tradition of garment production, managers even feel they have to compete for workers by offering a better wage.

4 companies were found to produce for H&M. 2 of them are wholly privatized, the other 2 are still partly owned by the state. The average wages in the 4 companies range from 500.000 Lei to 1.000.000 lei per month.

Some factory managers knew about the existance of the company code of conduct of H&M, others claimed that H&M is only intersted in the quality of production and never asked any questions related to working conditions and work relations. The status of the code of conduct is unclear. The managers interviewed understand it to be a set of general recommendations, not as requirements. None of the managers said anything about a time path within which all requirements posed by H&M should be fulfilled.

Company I

Interview with the factory manager by SOMO/CCC, March 1998.

The company was established in 1994, starting with a workforce of 250 workers. The company has two factories now, with a total workforce of 1,000 workers, including staff and administration. Orders cover 85% of the production capacity at the moment. 100% of production is for export. Direct export to retailers is 10% of the production. 100% of the orders are placed in "lohnsystem": the buyers provide all the materials to the factory. According to the manager the price levels are low. Profit comes from the huge quantities produced.

There are fire exstinguishers which have been checked in 1997. The cutting ,sewing and ironing section in factory 1 is badly lit. Ironing tables are not adjustable. Half of the chairs are adjustable, the other half of the workers sit on small stools. There are windows in this section but they cannot open.

In the second factory chairs are adjustable, the light is not sufficient, the windows are placed high and cannot be opened. No protective gloves are used in the cutting sections. The atmosphere is tense. There are 4 guards at the factory exit, checking the women who leave the factory.

A normal working day counts 8 hours. Saturday is a working day. 99% of the workers are women. According to one of the workers the average wage is 500-600,000 Lei ($62,50- $75,-) per month Bruto). She is not told what the piecerate is. When there are excessive orders workers have to work 10,12, or even 16 hours per shift, then they reach a wage of 800.000-900.000 lei per month. Overtime hours are paid by the regular piecerate. When there are no orders they do not work or only part of the shift. It occurs that workers earn as little as 200.000-250.000 lei per month when there is not enough work. They don't know in advance when they have to work. She is a member of the factory union, but says the union doesn't do anything.

A British represenative from H&M visits the factory regularly. According to the manager none of the clients ever mentioned a 'code of conduct' nor they they ever ask any questions related to social standards. The contract with the buyer is always signed on the basis of delivery times, prices and quality.

Company II

Visited by SOMO/CCC, March 1998. Interview with the head of the marketing department.

The company produces textiles and garments. 90% of the production of garments is exported. 80% of the orders for garments are placed in lohnsystem. The company is not privatised yet. The orders do not cover the production capacity of the factory at the moment and the company faces difficulties in making needed investments. H&M Sweden is an important client. They distribute the garments to their shop chains in Western Europe. They have been working with H&M for 2 to 3 years now. H&M places orders on a regular basis.

In 1989 this company employed about 8000 workers. After restructuring the workforce was reduced to 2450 workers, including staff members. 2300 employees work in production. 80% of the workers are women . The majority of the workers is member to the factory based union.

The factory is placed in a huge old building. It is dark, dusty and noisy. In the dyeing section the air is polluted. People do not wear protective clothing. Especially in the spinning- and weaving sections people work with old fashioned and dangerous machines. The head of the marketing department tells about regular accidents of workers loosing part of their hand when they get stuck in the machines. In 1990, a workers died because he fell into a machine for cutting cotton. In the sewing sections there is not enough light. The height of the chairs is not adjustable. There are no windows. Cutters do not wear protective gloves. In the second cutting section the only light is the light which comes in through the windows, this is not enough. The packaging room is full, small and very dusty. The ironing room stinks and is damp and steamy. Hazardous working conditions are compensated with a wage increase of 12%

The workers work on piecerate. The average wage in the weaving and spinning sections is 400.000-500.000 lei. In the sewing section workers earn an average wage of 600.000 to 700,000 Lei ($75,- -$87,50). A normal work week counts 40 hours. About once a month they also work on Saturday. Sometimes overtime is done on weekdays. Overtime is paid 25 % extra. If their are not enough orders workers have "forced holiday". For many of them this is a problem because they have land where they grow vegetables. For these workers it's essential to have a holiday in the spring. One of the women who works in the spinning section says she earns around 450.000 per month. She used to get clothes sometimes as a bonus this doesn't happen anymore. She thinks that conditions in this factory are very bad. She doesn't expect the union to fight for any improvements: "it's a sleeping union".

According to the head of the marketing department H&M is a good client, they pay on time, the prices are good and they give regular orders. They have an office in Bucharest which sends people over once a week when they are doing production for them. Swedish representatives from H&M come to the factory every two or three months. H&M sent a specification (in English) about some social standards. The head of the marketing department could only mention the standard that no children under 14 years old should be employed. She did not know if this was a recomendation or a requirement. H&M did visit all the sections but did not check on working conditions.

Company III

Visited by SOMO/CCC March 1998. Interview with the economic manager. In 1993 the company was fully privatized. It used to have a textile section. Now they only produce garments: dresses, skirts, women's suits and occasionally men's suits.H&M Sweden started placing orders in 1993. The Swedish office redistributes the garments to other Western European countries. Orders for H&M Germany are placed by the German representatives directly. Since about 2 years orders for H&M are growing.

The building has been renovated and, except for the dirty, wet toilets, looks clean and spacious. The atmosphere in the factory seems good and in the different sections a radio is playing. The cutting room is badly lit and cutters don't wear protective gloves. The two sewing rooms are very hot and crowded, windows do not open.

In 1993 the company had 250 workers. At the moment there are 500 workers in this factory. At the day of the factory visit another plant is being opened starting production with 100 workers. 90% of the workers are women. According to the manager the average wage ranges from 800.000 to 1.000.000 Lei per month ($100,- -$125,-). She says that most workers count what they produce, so they know exactely how much they earn. New workers have a 3 month probation period. During this period they do not produce the target and they earn less than others. According to the manager wages are not too high but not lower than in other factories They work mostly 5 days a week 8 hours a day. There is not a lot of overwork and when there is they get paid double. If workers don't reach their target they have to work on Saturdays. If there is not enough work people are send home. The manager says: " if we send the people home we see from case to case whether we can pay them anything". The company provides transport from and to the factory. There is a union active in the company and the manager claims that the relation with the union is good.

One male worker who works in the cutting section says he earns 1.200.000 Lei per month. He says he doesn't work many overtime hours and if he does he gets double pay. He is happy to work in this factory because conditions are good compared to other factories. One woman who works in the sewing section usually earns around 900.000 Lei. Another woman makes about 800.000 Lei. They both say that compared to others this a good factory.

Regularly representatives from H&M in Bucharest come to the factory. Once a year Swedish representatives come. H&M makes more requirements on social and environmental standards than any of the other clients. The company signed the code of conduct of H&M. When they first came to the factory their comment was that it was to hot and steamy in the factory. They recommended that there should be a dressroom with showers for men and women. The manager thinks however, that such improvements will not be possible for the next few years. To the question whether H&M pays a better price in order to enable the producer to live up to the code of conduct, the manager said no. The manager says though that they do want to make investments in social standards and working conditions.

Recently there was a meeting of H&M and the Romanian producers. H&M told that they were moving production from Turkey to Romania.

Company IV

Visited by SOMO/CCC, March 1998.

This factory is also a huge old factory, producing textiles and garments. Before 1990 there were 3000 people working at the this company, after the reorganisation there were 1300 left. In 1980 the garment section was opened with 100 workers. Now there are 350 workers in the section. In the garment section there are only two men; a cutter and a technician. The garment section is the profit making section, 100% of the production capacity is filled.

10% of the material produced by the factory is used in the own garment section. In 1997, 95% of the production of garments was exported.

H&M came in 1991, placed a test order and was satisfied.They place regular orders in all periods of the year.

In the whole factory the air is terrible, it's smells like acid and is very humid. It is quite dark and noisy. There is a lot of dust. The atmosphere seems alright. Workers who stand around don't seem hastened by the visit of the manager.

In the sewing section the strip light hang about 5 meters above the tables. The sewers sit on uncomfortable chairs, the tables are adjustable though. At the moment of the factory visit they are working with filling material of winter jackets which causes a lot of dust.

According to the manager the average wage is 800.000 Lei bruto per month ($100,-), netto this is between 600.000 and 650.000 lei. The minimum wage in the factory is 600.000 Lei nobody earns less than this. Wages are based on a piecerate, but also related to the work history of a person. A normal workweek is 40 hours, if overtime is done this does not exceed 8 hours per week. Usually overwork is done Saturdays. There are two unions in the factory. The manager says the relationship between the management and the union is good.

H&M does make requirements on environmental issues. The company signed an agreement with H&M, saying that there is no child labour, that there is a canteen, that toilets are clean etc. Once a month they come to the factory, when they come they check the production quality. The manager says that all standards laid down in the code of conduct of H&M are already settled in the Romanian labour law, while with H&M it counts as recommendations, in fact they are no recommendations but law.

A few times H&M made recommendations, the company made improvements accordingly. Although H&M makes a lot of demands they do not pay a better price in order to enable the producer to live up to the code of conduct.

In December 1997 the documentary of Cecilia Zadig: H&M: Latest fashion, but at what price? was broadcast by Swedish television. The research group IBON of the Philipines conducted research for this documentary. Excerpts of this documentary will be shown to the jury during the International Forum. Ros-B Guzman, a research fellow of IBON will present a follow up of the documentary. After the broadcast in Sweden, H&M was subject of public debate and the international press paid a lot of attention to H&M's social policies. This section provides a summary of information included in the documentary which is relevant to the international forum.

A timely reaction to the latest trends, cheap prices and a consumer-oriented approach are important features of the company. If a customer wants a certain piece of clothing for e.g. US$ 15, H&M searches for a producer able to fulfil that wish. Advertising is important.

In the documentary, cineast Cecilia Zadig buys a sweater for SKr 160 (US$ 20). She wants to find out were and under what conditions the sweater has been made.

The Chief of Production Menswear, Jörgen Andersson states that due to the large scale production, H&M does not produce in small factories. Mr. Andersson says that H&M do not tolerate child labour.

In the 1970s H&M started to send production to Asia. As such, the company set the trend in foot-loose operations by Swedish companies. The main reasons were that labour-intensive production in Sweden was to expensive and that production in Sweden was not flexible enough. H&M established its buying office in Hong Kong, and produces a.o. in China, Bangladesh and the Philipines.

In China, Cecilia Zadig had to use a cover presenting herself as a buyer to get entrance in the Chinese factory Don Guang, which produces for H&M, Lindex and Ellos. The washing department was extremely noisy and dense with chlorous air. The workers did not wear protective gear. They were washing jeans with their bare hands. The owner of the factory is Mr. Chang, who has companies in the Philipines, Indonesia and China. In China labour unions exist but they have no bargaining power. If workers workers were granted rights, production would be more expensive. In China the owner of a factory can guarantee a supplier that an order will be delivered in time. Most workers stay for 5-6 years. Workers are recruted from the countryside. Mr. Chang brings the workers home once a year, at Christmas time. According to the factory owner, the workers are satisfied to be working for him. Women are employed when they are about 16 years of age. When an order has to be filled within a limited period of time, the workers work 13-14 hours a day, seven days a week. In the Don Guang factory the workers live in dormitories. The tv team was able to pass the guards in the dormitory area and to interview some of the workers. Workers earn 500 yuan a month. A room is shared by 16 people, as they sleep on bunk beds. One worker revealed that he earns 600 yuan, including a bonus. Every month he sends 450 yuan home. He works together with his wife in the factory. Their child lives with its grandparents. The worker said that there are a lot of fights going on in the dormitory area. In 1.5 year they want to go home and start their own business. He tells that work in clothing factories is very attractive to many people.

In Hong Kong J. Andersson states that H&M has a team of professional buyers who are searching for the cheapest prices. Every penny is taking into account.

The film crew visited another company in Hong Kong that used to produce for H&M. The owner explained that H&M is a tough company to work for, as they have US management strategies. They can stop placing orders at once. Producing for H&M means that you have to be well prepared. It is a very good learning experience for starting managers. Producers stand in awe of H&M. If they manage to get an order of H&M, this means they are very capable.

In the Philipines the Eaststar Export factory was filmed. This is the second largest garment exporter of the country. Eaststar pays minimum wages, but their subcontractors pay less. The director, B.K. Chung explains that the costs of production are reduced by using subcontractors. He perceived subcontracting as the only way to produce cheaply. Costs like water and sewage are on the subcontractor's account. Angelina Ingco, a woman working for a subcontractor of Eaststar, tells that she is the only one in the family with a decent job. Her husband is unemployed. At first, she had a better paid job in a factory (not a subcontractor), but she is glad to have a job. The money she earns (100 pesos, SKr 23) is just enough to buy food for her family. Her children go to school, but she does not have money to buy books for them. She thinks that she earns too little money. The factory she works in is noisy, looks untidy, and children can often be found sleeping on piles of garment. She brings her daughters with her, because she has nobody to look after them. The sweater that cineast Cecilia Zadig bought is produced at the factory Novilon Garment, which is a subcontractor of Eaststar. Production costs are Skr 23. Luiza Novilon, the owner of the factory, tells that she has worked for H&M for 6 years as a subcontractor of Eaststar. Two hundred people work from 8.00 until midnight, and sometimes throughout night, depending on how quickly H&M wants an order in. Angelina tells that her daughter does not officially work at the factory, but that she performs certain tasks for it while she is there.

Another 500 people work at home for subcontractors supplying H&M. The tv team visited a homeworkers community. Women and children embroider on H&M sweaters by hand. A girl tells that she performs this work when she is not too tired. On Saturdays she combines this work with housecleaning. These tasks can occupy her until midnight. The girl earns SKr 1 (US$ 0,12) for each sweater that she embroiders on. It takes her 8 hours to do 2 sweaters. Another girl, Jo-Ann, is 9 years old and folds the sweaters inside out. She is a homeworker and works for a subcontractor. She earns 1 peso for each sweater (US$ 0,04). After 4 hours of work she earns 12 pesos. Rosario del Rosario from the University of the Philipines investigated the situation of working children; they often have a lot of problems keeping up with school, with the result that they often quit. Angelina is very concerned about what is going to happen to her children in the case that she dies. She wonders whether H&M director Persson can pay for her children's schooling. She says that she would be very grateful for this, and starts to cry.

The Swedish television team asked H&M director Persson to comment on the documentary. At first instance he refused, and stated that the factories profiled in the documentary were not representative of H&M suppliers. Later he reacted and responded concerned.

In Sweden contact with H&M intensifies rapidly after the broadcast of the documentary (see section 4). Since the broadcast H&M has got a lot of media coverage and was urged by many people to improve labour conditions in factories producing for the company. According to Kristina Bjurling of CCC sweden 3 out of 4 consumers tells that they will stop to buy H&M clothes and 7 out of 10 consumers want to see a fair trade label on garments.

As a response Mrs. Ingrid Schullström went to the Philipines in February 1998 to check the case of Eaststar. H&M initially contracted Eaststar, since about two years the manager of Eaststar started another company, Gu-Young, and H&M contracted this company instaed of Eaststar. (A slightly different version is given in a letter regarding the 10 december meeting of the German CCC and H&M, Carolin Schmidt of H&M Germany writes that the company Eaststar Garments no longer is on the suppliers list of H&M. The company changed its name into Gu Young and with this company H&M co-operates).

According to H&M Sweden the owner still had some part of ownership in Eaststar and placed some orders there. Since end 1996 he sold all his parts of ownership in Eaststar and H&M did no longer have contacts with Eaststar. However, Gu-Young used Eaststar as a subcontractor without informing H&M up till June 1997. Since that time, Gu-Young stopped subcontracting Eaststar. Before June 1997, Eaststar handed some orders to Novelyoung, which subcontracted embroidery to homeworkers. At Novelyoung the Swedish TV team found the children working (among others JoAnn). Mrs. Schullstrom of H&M states that she found that JoAnn did not work at the factory, and that she is going to school, eight hours a day. According to Mrs. Schullström she was brought into the factory by the TV team, JoAnn just happened to do some work on a free schoolday when they filmed. She did not deny that JoAnn sometimes helped in the factory. She also said that it just can happen that you are doing some work on free schoolday when accidently a TV team comes by. Mrs. Schullstrom told Cecilia Zadig, the producer of the documentary, that they tried to ask Jo-Ann to sew something and she could not, which is used as prove that she is not working (According the documentary JoAnn was folding sweaters). Mrs. Schullström could not manage to find the embroidery village of Rosell and Beth, the two girls doing homework. According to Cecilia Zadig it must be easy to find them, the manager of Novelyoung knows where to find them. H&M plans a follow up with homeworkers (embroidery) to see how embroidery can be made in decent labour conditions. She also met with Labour department and textile exporters to discuss ideas on how to improve labour conditions. H&M assumed that the TV team asked Novelyoung to throw out piles of cloth to make the factory look untidy. According to the TV team this is not true.

Altogether this is a perfect proof that a company representative cannot get the truth in their inspections. Suppliers hide the thruth because they are afraid of the steps H&M will take and loosing business. Independent monitoring is needed. Kristina Bjurling of CCC Sweden told Mrs. Schullström that according their code of conduct H&M has a responsability for what happens to these children. She agreed, but said the documentary was made too long ago and that it was too late to find these children.

Appendix

"Working Conditions of Migrant Chinese Workers in the Mauritius Garment Industry"

Submitted by a local NGO, April 1, 1998

Contact Period

Normally 2-3 years with possibility of brief extension, generally on the same conditions. In the absence of a standard model, contracts generally differ among the different factories.

Normal Hours of Work on a 5-Day Week Basis

Nine hours per day from 8:00 a.m. to 5:00 p.m. (including lunch break and two tea-breaks)

Overtime Work on Week Days

Up to 8:00 p.m. or 9:00 p.m. or 10:00 p.m. or 11:00 p.m., depending on circumstances. Breaks are granted for dinner and refreshments.

Overtime Work on Saturdays

From 8:00 a.m. to 1:00 p.m. or 2:00 p.m., etc. up to 5:00 p.m.

Overtime Work on Sundays and Public Holidays

From 8:00 a.m. to 12:00 (noon) or 1:00 p.m.

Rates of Pay (For Normal Work)

These vary according to the contract and may be within the range of US$100 to US$170 monthly. Some factories pay daily rates, others pay according to piece rates fixed by the management who do not sometimes hesitate to increase the daily quota to their advantage. Some workers can manage to attain during the normal hours of work the quota fixed, other workers have difficulty to do so and have therefore to work overtime without renumeration in order to reach their quota.

Rates of Pay (For Overtime Work)

These rates are in accordance with the labour laws in Mauritius. All overtime work performed per week is renumerated: a) at 1 1/2 times the daily rate of pay for the first 10 hours overtime; b) at two times the daily rate of pay for the next five hours overtime; c) at three times the daily rate of pay for overtime over and above these 15 hours. All work performed on Sundays and Public Holidays is considered as overtime and is renumerated at two times the daily rate of pay. Chinese migrant workers are generally willing to work overtime in order to earn more income in spite of the sacrifices and fatigue which regular overtime work entail.

End of Year Bonus

Chinese migrant workers normally benefit from the end-of-year bonus which is granted to all workers in December in accordance with Government's decision.

Food and Lodging

Free lodging (with electricity and water supply) is provided. However, the space for sleeping, cooking and laundry is generally inadequate as are bathrooms and toilets. Food for more than 20 workers is purchased and cooked by Chinese cooks. A food allowance of about RS. 1000- is granted to each Chinese migrant worker to meet the cost of such benefit.

Sick Leave

Whenever they feel ill and unable to attend work, Chinese migrant workers must consult the company doctor in order to be recommended for rest and medication.

Casual Leave

The Chinese migrant workers are not eligible for the casual leave grantable to their Mauritian fellow workers.

Annual Leave

Most factories grant five to 10 days annual leave to all their workers (Mauritian and Chinese Migrant) on the occasion of Christmas and New Year.

Trade Union Activities

The Chinese migrant workers are not authorised to form workers' associations nor to participate in the activities of Mauritian workers' associations.

Religious and Social Activities

The Chinese migrant workers are generally not allowed to participate in religious and social activities organised in Mauritius.

Cultural Activities

The Chinese migrant workers are generally not authorised to attend cultural activities which are organised in Mauritius from time to time. However, on the occasion of the Chinese Spring Festival, which is a public holiday in Mauritius, these workers are allowed, on agreed conditions, to attend cultural events organised to celebrate that festival.