The authors of the study, the University of Aberdeen and the advocacy group Transform Trade, surveyed 1,000 Bangladeshi factories making clothes for global brands and retailers during the Covid pandemic.
More than half of the factories experienced at least one of the following: cancellation of orders, refusal to pay, reduction of prices or late payment of goods.
The report’s findings
“This study highlights reports of unfair trading practices that manufacturers have encountered during Covid-19,” the report found.
The practice has led to lower wages for factory workers, job losses and high employee turnover, he said.
One in five factories are already struggling to pay Bangladeshis the legal minimum wage, he said.
The report also found an incident where some companies demanded a reduction in clothing ordered before the pandemic broke out in March 2020.
And some fashion companies refuse to budge on prices, despite rising costs and rampant inflation.
The study calls for the creation of fashion industry regulators in importing countries to improve purchasing practices.
The “highest proportion” of unfair business practices include major brands such as H&M, Next, Primark and Zara owner Inditex, respondents told researchers.
Several companies’ responses to the claims are included in the report.
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Inditex said it “guarantees payment for all orders placed and in the process of production and cooperates with financial institutions to facilitate the provision of loans to suppliers on suitable terms”.
German supermarket chain Lidl said it “takes the allegations very seriously”.
It added that it “takes responsibility for workers in Bangladesh and other countries where our suppliers produce very seriously and is committed to ensuring that core social standards are followed throughout the supply chain”.
Primark said that due to the pandemic, it was “the very difficult decision in March 2020 to cancel all orders that have not been delivered”.
Companies named in the report did not immediately respond to AFP’s request for comment.
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