Cambodia – Textile – Minimum wages and social security

In spring 2012 H&M placed an order with its supplier in Cambodia. This supplier subcontracted to Kingsland Cambodia Garments Ltd without informing H&M. The employees were paid according to the law during the production months.

After the placed order was shipped in June, Kingsland suspended production and illegally laid off 200 employees. Kingsland did not pay compensation and outstanding wages (around $200,000), consequently being closed down in January 2013. These actions triggered factory employees to protest, including blocking the factory gates and machines for four months. Some employees would also go on hunger strikes, calling for action.

To resolve the issue, the Cambodian NGO CLEC (Community Legal Education Center) informed H&M of the situation. The factory employees, CLEC and the Workers Rights Consortium in Cambodia delivered letters to H&M appealing to compensate 200 employees. H&M was also challenged by the media. As a result, a social dialogue took place in a stakeholder meeting, including H&M, BFC (Better factories Cambodia) and ACILS (American Center for International Labor Solidarity). It was concluded that factory assets and contributions from H&M’s suppliers would cover the employees’ compensation. The factory employees received their compensation in mid-March.

After this case, H&M took preventive actions including whistleblowing system in the factories producing for H&M; and a workshop with all suppliers in Cambodia on H&M’s new policy of using subcontractors. In December 2012 H&M adapted a human rights policy based on the UN Guiding Principles on Business and Human Rights as a response to the Kingsland case. Among the policies included, H&M forbids the use of undeclared production units by its suppliers.

Sources:

Business and Human Rights Resource Centre. (2015). THE KINGSLAND CASE – CAMBODIA (pp. 1-2). Geneva: UN Forum on Business & Human Rights. 

H&M. (2013). Update regarding Kingsland Garment Cambodia Ltd. About.hm.com.