BHRRC sent a short survey aimed at understanding in detail the engagement apparel brands have had with their suppliers amidst the continued disruption of the garment industry in Bangladesh caused by the gas crisis and quota reform protests in 2024.

We asked brands to respond to the following questions regarding their suppliers in light of the ongoing gas crisis and protests that began in May 2024.

1. Have you, as a matter of policy, directed your sourcing team to forgive any delivery delays resulting from the disruption to the garment industry and suspend the imposition of penalties until the region has recovered? If yes, please include details. If no, please explain why this decision was made.
   1. Has your company imposed any penalty on a supplier in the region as a result of delayed delivery? If yes, please share details on any penalties imposed and the circumstances for such penalties.

H&M Group: We have not charged our suppliers with such penalties as a consequence of the political unrests earlier this month. We continue assessing the situation constantly.

2. Have you, as a matter of policy, directed your sourcing team not to seek price concessions from suppliers in the affected region on both new and current orders? Please share details on specific actions and measures taken.

H&M Group: We have not charged our suppliers with such penalties as a consequence of the political unrests earlier this month. We continue assessing the situation constantly.

3. How has your company monitored the payment of worker wages in supplying factories and ensured that wages have been paid on time and in full during July-August?
H&M Group: As of 26 August, the majority of our direct suppliers (99%) have made wage payments for the month of July. Our colleagues in Bangladesh are following up with the remaining factories and monitoring compliance to ensure that workers have been paid the wage they are legally entitled to receive. For the August salary, each factory will submit wage payments as per our normal data collection routines, and the teams will continue to do enhanced verification. We refer to Better Work’s guidance on legal wages during this period to ensure that workers receive the wages owed.

H&M Group: Most of our purchasing practices are governed by digital systems and company policies. This ensures we consistently implement our standards and limits the risk of human error or external influence. It also means that many of the commitments we make, like adhering to certain payment terms, occur automatically.

We have standardised payment terms in line with industry practice. In addition, H&M Group has negotiated a factoring agreement on behalf of all its suppliers that gives them faster access to invoice payments. All of our suppliers can opt to receive payment approximately three days after sending an invoice to H&M Group. Taking this into account, our suppliers in Bangladesh on average get paid 16 days after they submit an invoice and hand over goods.

In addition to our regular routines, we have maintained a close dialogue with our suppliers to understand their need for support, and we continue doing so with our colleagues on the ground.

4. How are you ensuring order stability at the suppliers you source from, to ensure suppliers can maintain business operations and maintain jobs for workers, including confirming future orders and prices with factories? Please share details.

a. Have you committed to receiving and paying for all orders placed with suppliers before and during the crises the industry has faced since May 2024. Please share details.
b. Have you transferred orders from your suppliers in Bangladesh to suppliers in other apparel-producing countries in response to the crises? Please share further details on why this decision was made.

H&M Group: We have maintained a close dialogue with our suppliers to understand their need for support, and we continue doing so with our colleagues on the ground. We have not taken any decision to change our long-term sourcing strategies in Bangladesh and have publicly stressed the importance of responsible purchasing practices amid the current political situation through ACT.

We are committed to responsible purchasing practices that ensure we are a fair business partner, regardless of the country or situation in which we operate. As a founding member of ACT we have signed on to their five commitments on responsible purchasing practices:

• Purchasing prices include wages as itemised costs.
• Fair terms of payments.
  
• Better planning and forecasting.
  
• Undertake training on responsible sourcing and buying.
  
• Practice responsible exit strategies.
  5. What steps are you taking in collaboration with trade union and worker representatives at supplier factories to ensure the physical and mental wellbeing and safety of your workers? How do you plan to support your suppliers and workers long-term?

H&M Group: Our local colleagues are in communication with trade unions on the ground. We continue to collaborate with trade unions within our recently renewed global framework agreement, including in the national monitoring committee in Bangladesh.

Feel free to provide any further comments.