[Investigative Report] Reality Behind Brands’ CSR Hypocrisy: An Investigative Report on China Suppliers of ZARA, H&M, and GAP

Executive Summary

In the spring of 2015 and 2016, SACOM conducted undercover investigations inside four of Zara, H&M, and GAP’s supplier factories in China. Despite three brands’ CSR policies appear to be comprehensive and enable them to proclaim ethical, SACOM’s investigation reveals remarkable disparity between the brands’ supplier factory CSR Policies and the reality in their Chinese supplier factories.

Three brands have correspondingly CSR policies regulating working hours, which requires the factories to provide workers days off, and not allowed to work more than 48 hours. However, the research found that the dominance of large retailers
made supplier factories force workers to work excessively long overtime to meet disproportionally tight delivery time. The pressure from manager and co-workers were huge, and in some worst-case scenario, to achieve high production targets, workers were required to work from 7:30am until 1-2am, and only got one rest day a month.

Three brands’ code of conduct state that their supplier factories shall pay wages which can meet workers’ basic needs. However, the research reveals that workers’ wages were all calculated by fixed and meager piece rates, which pushed workers to work overtime to make as many pieces they can to make a living. Their wages were even unstable due to the frequent changes in designs, and difference between high and low seasons. Workers ended up not being paid a living wage.

Three brands also promise safety and healthy working conditions in supplier factories. Yet, in reality, workers were exposed to toxic chemicals, cotton dust and hazardous dusts without protective gear. The operation of machinery was neither safe due to the lack of training and protective equipment. Fire escape path was either narrow or obstructed. Workers’ health and safety was put at risk.

The investigation also reveals that there was no genuine representation of workers or channel for workers to voice out. Worker unions were formed by managers themselves; when workers went on strike, they were suppressed or corrupted by the factory.

Based on the investigation, Zara, H&M, and GAP’s CSR policies are proved to be empty promises and are not beneficial to workers at all. Though brands employ staff and partner with other external auditing firms to conduct plenty of audits every year, SACOM’s investigation unveils that supplier factories guided workers to lie to auditors and prepared fake documents to cover up the issues in working condition.

This report points out that the real reason why brands CSR policies have evolved for more than a decade but still failed to achieve their CSR goals is that they merely rely on the falsifying and top-down audits. SACOM demands three brands take the following actions:

Facilitate the factories in changing the unfair infrastructure of wages by paying a living wage for the work within standard working hours.

Provide workers with sufficient working health and safety training and empower them with information and knowledge in order to safeguard their own rights.

Give back workers’ right to organise, form a genuine represented worker union such that they have collective bargaining with the factory, let them be empowered and fight for a better working condition on their own.

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