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Wal-Mart and H&M Suppliers Pay Workers at Closed Cambodia Plant

March 2 (Bloomberg) -- Suppliers to Wal-Mart Stores Inc. and Hennes & Mauritz AB agreed yesterday to pay about $145,000 in back wages and severance to about 160 workers at a Cambodian factory that closed in November, a labor activist involved in the deal said.

The agreement, which followed a two-day hunger strike, was reached at a meeting yesterday in Phnom Penh that included representatives from Wal-Mart, H&M and their suppliers, Saramax Apparel Group Inc. and New Archid Garment Factory Ltd., said David Welsh, country director in Cambodia of Solidarity Center, a Washington-based international worker rights group.

The payment decision comes as Western retailers are facing increased scrutiny of their international garment production. More than 100 people were killed on Nov. 24 at a Bangladesh plant producing garments for companies including Wal-Mart and Sears Holdings Corp.

The Cambodian workers, who sewed underwear for Wal-Mart and H&M suppliers, had earned an average of $60 a month at the Kingsland factory in Phnom Penh, Welsh said in an interview. Welsh is based in Cambodia and attended today’s meeting. Cambodia is the eighth-largest apparel producer for the U.S. market, according to the U.S. Commerce Department.

Saramax will pay about $100,000 to the workers and New Archid will pay about $45,000, Welsh said. Workers will begin receiving the payments in the coming weeks, he said.

Kevin Gardner, a spokesman for Bentonville, Arkansas-based Wal-Mart, said in an e-mailed statement yesterday that the company was told the factory stopped doing business with Saramax in October.

“We have paid in full for all merchandise,” Gardner said in the statement.

H&M, Saramax and New Archid couldn’t be reached immediately for comment.

To contact the reporter on this story: Renee Dudley in New York at rdudley6@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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