Major global fashion brands Inditex and Next have refused to sign a groundbreaking agreement designed to improve wages and working conditions for Cambodian garment workers, despite having participated in developing the initiative over several years of negotiations.
- The initiative establishes the first brand-supported collective bargaining template in the textile, garment, shoe and leather sector globally.
- A dozen leading global brands have committed to the Cambodia Agreements framework with IndustriALL Global Union.
KEY TAKEAWAY: The refusal by Inditex and Next to support the Cambodia Agreements undermines years of collaborative work aimed at establishing unprecedented brand-supported collective bargaining in the global garment industry, potentially denying thousands of workers access to improved wages and working conditions whilst highlighting the gap between corporate commitments and actual implementation.
THE TRIGGER: At respective Annual General Meetings in May 2025, both companies faced direct shareholder questioning about their refusal to sign the Cambodia agreement, with executives offering inadequate justifications for their positions despite public commitments to responsible business practices and existing Global Framework Agreements.
- Next's CEO controversially claimed female retail workers did not need living wages because their husbands supported them.
- Next stated it could not commit to the Cambodia agreement without providing substantive reasoning for the refusal.
- Inditex reiterated general support for collective bargaining whilst refusing the specific mechanism designed to deliver it.
WIDER LENS: The Cambodia agreement template extends beyond wage improvements to include enhanced maternity leave, paternity provisions, improved dispute resolution mechanisms, and skills development programmes specifically benefiting Cambodia's predominantly female garment workforce whilst addressing systemic wage competition challenges.
- IndustriALL's campaigns director highlighted that no single brand can address wage challenges alone in the competitive industry.
- The framework was developed through collaboration between IndustriALL, leading brands, employers, and affiliated Cambodian unions.
- Successful early implementation has already led to factory unionisation and collective agreements in participating facilities.
STRATEGIC SUBTEXT: Both companies' withdrawal appears calculated to avoid setting precedents that could pressure them into similar commitments across other sourcing regions, despite their participation in lengthy negotiations and existing commitments through Global Framework Agreements with IndustriALL.
- The Cambodia Agreements emerge from the ACT initiative and represent a potential solution to the garment industry's persistent race to the bottom on wages, offering a mechanism that balances wage improvements with maintaining supply chain competitiveness across the sector.
- The template was developed as a standardised Collective Bargaining Agreement through years of collaboration with Cambodian social partners.
- The initiative aims to stabilise supply chains while ensuring workers receive fair wages and improved conditions.
- The framework addresses the challenge of raising wages without endangering industry competitiveness through coordinated brand support.
THE OUTLOOK: IndustriALL and its affiliated unions remain committed to expanding the agreement's reach, with continued efforts to engage reluctant brands while supporting implementation among companies that have already signed the framework for Cambodian garment workers.
- The union continues pressing Inditex and Next to honour their stated commitments to collective bargaining and worker rights.
- Additional global brands sourcing from Cambodia are being approached to join the initiative.
- Existing signatories are proceeding with implementation to deliver tangible benefits for workers in the supply chain.
WHAT THEY SAID:
Low wages remain a systemic challenge in the garment industry, worsened by fierce competition. No single brand or actor can address this alone. A sustainable and effective wage strategy must involve all stakeholders, brands, employers, and workers.
— Walton Pantland
Campaigns Director
IndustriALL
Several investors have expressed interest in the ACT binding agreement and have asked IndustriALL why Inditex refuses to sign. Investors are concerned that Inditex is contributing to increasing inequality in Cambodia. How does Inditex justify its refusal to sign the ACT agreement with its stated commitment to freedom of association, collective bargaining, and fair wages, as well as its Global Framework Agreement (GFA) with IndustriALL?
— Yot Seang
Spokesperson
Coalition of Cambodian Apparel Worker Democratic Union
We must hold companies accountable for their commitments, especially those with GFAs. Taking part in lengthy negotiations only to walk away at the end undermines their stated ambitions. The Cambodia Agreement has the potential to solve one of the major issues in the garment industry: the race to the bottom on wages. Next and Inditex are undermining years of work despite their public statements. Actions speak louder than words. Investors should look closely at the gap between what these companies say and what they do.
— Atle Høie
General Secretary
IndustriALL
