Kiteet (16.03.2004 - Juhani Artto) The Swedish clothing chain H&M, with retail outlets in 18 countries, secures a significant proportion of its products from manufacturers in China. The exact number of orders is a business secret.
With respect to the national distribution of origin of goods, however, Kristina Stenvinkel, the Head of Public Relations at H&M, reveals that half of all H&M products are manufactured in Europe, and the other half come from Asia: “One of our major producers in Asia, for example, is China, and in Europe, Turkey.”
H&M has no production plants of its own. Its range is manufactured by about 800 suppliers. The agreements concluded with these suppliers reserved for H&M the right to make spot checks at supplier manufacturing plants. The purpose of these checks is to verify that the subcontractors are complying with the agreement clauses on such matters as working conditions.
Stenvinkel refers questions concerning employee rights at the plants of H&M’s suppliers to consult the company's Environment and CSR (corporate social responsibility) Manager, Ingrid Schullström.
Worker representatives should not create networks
Question: H&M’s public policy requires its suppliers to respect their employees’ right to organise and collective bargaining. How do you apply this in China?
Schullström: “China is a dilemma for all of us, including the trade unions. Nobody really knows how to handle this issue”.
“We understand that the ACFTU (the trade union confederation controlled by the Chinese power elite - JA) is not a free trade union, so in this case we cannot refer to them. Our approach is more pragmatic, in that we say that workers should have the right to form their own representation within the companies. This is actually legal in China, provided that this is not called a trade union or that the representatives do not form networks with representatives in other companies.”
Schullström admits that H&M has not subjected its Chinese suppliers to conditions requiring the existence of worker representation, even though on its website the company asserts that this happens. The purpose of outlining the representation concept is rather to establish an understanding on how to advance within Chinese political conditions. According to Schullström, many other companies and organizations have adopted such a policy in China. Furthermore, the SA 8000 certificate, developing norms for social responsibility in business enterprises, approves this kind of first step towards free trade unionism in the politically cramped conditions of China.
“This kind of model cannot change the Chinese government’s relation to the trade unions, but established worker representation in companies may exert a positive influence on the future prospects of trade unions.”
No bargaining on pay
The Swedish manager stresses the importance of social dialogue between management and workers. She believes that employees may thereby positively influence conditions at their workplaces. Currently there is little social dialogue in Chinese enterprises.
Question: How have the worker representatives been elected in the companies, or how should they be elected?
Schullström: “We know that ACFTU is more a management representation. We are seeking representation elected by the workers themselves. Sometimes this may mean a ballot, and sometimes some other approach. I have no details on this point.”
Question: Workers’ rights also include collective bargaining. Does that happen at your suppliers’ plants in China?
Schullström: “They have no collective bargaining of the kind that we have, for example, in the Nordic countries. In Chinese companies there is more of a general agreement focusing primarily on health and safety issues and on working conditions. Wages and salaries are not yet part of the bargaining agenda, however.”
“I think that in China employees have no clear concept of the kind of model that could be applied in collective bargaining. In most organizations, having come from outside of China, the main idea at this stage is to educate the employees. It is difficult for them to defend their rights if they do not know what those rights are.” The management and middle management of the enterprises also need education on these issues, Schullström adds.
Together with other multinationals
Schullström bases her belief in the prospects of this way forward on the activity of several companies, NGOs and other organisations now operating their own schemes and projects in China, often still at the pilot stage. One of the international forums where H&M is an active debating participant is Business for Social Responsibility (BSR), based in the USA. Several other globally well-known multinationals, such as Nike, Reebok and Ikea, also take part in the BSR debates and exchange experiences.
The H&M representative stresses that the initiative must come from outside of the Chinese organisations. Otherwise, in her opinion, progress will not occur. “The more projects there are, the easier it will be for enterprise managements to approve social dialogue at workplaces and to recognize the need for employee representation.”
In summary, Schullström states that H&M respects the right of workers to organise, but the situation in China is not yet ripe for this. She believes that in ten years a great deal of progress will occur towards a situation in which free and responsible trade unions exist in China.