Labor violations still a big problem in our supply chains

Here's a report from China labor Watch that just goes to show that even companies who have a fairly rigorous compliance process can be found lacking in oversight. One of the big problems most factories face is a lack of staff, especially in the cut and sew factories. Are your factories over their capacity to manufacture within your code parameters and local law?


Just recently, six American clothing companies, including American Eagle and Gap, have confirmed the results of a China Labor Watch (CLW) investigation that uncovered violations of Chinese labor laws and worker rights at a factory that produces accessories for them. A factory of the Jiangsu Ningbo Hesheng Headwear Company (henceforth “the Ningbo Hesheng factory”) was investigated in August, 2011 by CLW investigators. The investigators discovered the following conditions at the Ningbo Hesheng factory, which we have outlined in detail in an investigative report:
- Since the factory is understaffed, it employs many students between 16 and 18 years old who are on summer vacation. These students work the same hours and have the same responsibilities as normal workers.
- Workshop conditions are extremely poor, and include high temperatures and toxic gases.
- Workers regularly work more than 12 hours a day.
- Workers work 30 days a month during the busy season.
- The base salary for a factory worker is significantly lower than the legal minimum wage of Cixi County, where the factory is located.
- The resignation process is very difficult for workers and many workers are fined for resigning if they have worked at the factory for less than a year.
We sent this report to the Ningbo Hesheng Headwear factory’s principal clients, and while August Accessories, GMA and Betmar Hats did not reply to our request for a response, American Eagle, GAP, J. Crew, Liz Claiborne, Talbots and Target jointly responded that they took these allegations seriously and would conduct their own investigation of the Ningbo factory. On November 11, they sent a letter to us stating that they had confirmed many of our report’s findings and were working with factory management to create a safer and fairer work environment for its employees.

CLW director Li Qiang said that he was pleased with this news and eagerly awaited further news of improvements at the Ningbo Hesheng factory. However he added, “We hope that in the future multinational companies will establish a system for improving conditions in their Chinese factories, rather than making improvements on a case-by-case basis.”

Video on Youtube

Here's a link to a video taken at a factory in China that makes hats for many American Brands. I post this today to remind people that every worker with a mobile phone is an investgative reporter and that conditions in your supply chain are only a youtube or facebook away.
http://youtu.be/QzNYY001Z_A

The video is of poor quality but it gets its point across.
For the full report, go here;
http://chinalaborwatch.org/pro/proshow-161.html

Labor unrest in Shenzhen

With the labor and raw material costs all increasing, and the factories ability to raise the prices blocked by brands desperate to keep retail price points unchanged, it is often the workers who suffer. No one wants to raise the retail prices in a down economy. However, it is unreasonable to expect the factories to absorb these higher costs without something snapping. With workers taking matters into their own hands, we can expect to see more of this type of action in the future.
This from China labor Watch
New York, November 22^nd, 2011 -- On November 21st, more than 400 workers went on strike at the Shenzhen Top Form Underwear Co., Limited factory in Shenzhen, Guangdong Province. The motivation behind the strike was rooted in worker unrest over the factory’s unfair piece-rate wage system and workers’ unachievable daily production quotas. Despite the long work hours and high pressure that workers toil under to complete their work quotas, the factory does not pay its workers overtime wages. During the peak season when the factory receives many orders, employees work approximately 300 hours per month. Regardless of these excessive work hours, workers are still only able to earn around 2,000 RMB per month ($314 USD). Workers are regularly reprimanded and verbally abused by factory management, further amplifying the pressure felt by the factory workers.Li Qiang, Executive Director of China Labor Watch, has said in a statement that factory workers have become increasingly conscious of their rights as workers and ways to protect these rights. Despite this belief, many factories still employ old-fashioned coercive-style management structures instead of a more fair and human-oriented system. Li believes that there is a growing sense of social justice among factory workers; this will lead to many more strikes in Chinese factories in the future.

 

Human trafficking in the supply chain

Seven years ago, David Arkless took a call from the first lady of an African state. She wanted to know what his company was doing about human trafficking. His answer was blunt: "What human trafficking?" The question prompted him to investigate. The figures proved startling. According to the UN Office on Drugs and Crime, more than 2.4 million people are being exploited by traffickers at any one time. Some campaign groups suggest the annual number of victims could be as high as 27 million.    "There are more slaves today than in any time in human history", says Arkless, who heads up corporate and government affairs for Manpower, a global employment services firm. He's become something of an evangelist on the subject. As board president of the campaign group End Human Trafficking Now, he helped push through the Athens Ethical Principles - a seven-step charter designed to stamp out the use of trafficked labour by companies and other organisations. Arkless' attempts to win over other senior executives are met with mixed responses, however. While most companies lament the problem, he says, they fail to see what it has to do with them. They're wrong, the Manpower executive maintains. And he tells them as much: "At some point in your supply chain or partner's supply chain, it's likely that you are using products, supplies or services that involve people who have been trafficked."    To read the full article by Oliver Balch, please click on this link: http://www.guardian.co.uk/sustainable-business/blog/human-traficking-rights-business?newsfeed=true  .

Technology for the masses

I heard in a BBC World Service report that a Chinese entrepreneur has developed an app called "Mobile Job Hunting", that will connect workers to the factories that have jobs available. It will give them information on wage rates, overtime rates etc and will allow thm to check out other factories while still in employment. With over 800m mobile phones in China, and over 300m migrant workers, this has the possibility of creating a huge change in working conditions for the better. As factories have to compete with each other for available workers, conditions will have to improve in order to retain their workers.
here's a link to the report.

http://www.bbc.co.uk/news/world-15372924

New project to tackle violence against women in India and Bangladesh.

Here's a story from just-Style magazine by Leonie Barrie, 27th Oct. 

As the article points out, most workers in the garment industry are women, so anything that can be done to improve the lives of these women will have a huge impact.

A project to reduce workplace violence against women working in export-oriented garment factories in Bangladesh and India has won a three-year grant from the United Nations Trust Fund.

The initiative will be implemented in Tirupur and Bangalore India, and Dhaka, Bangladesh, starting in autumn 2011, and is being coordinated by the Fair Wear Foundation (FWF) and four partner organisations.

According to FWF, recent research estimates that 60% of women in the garment industry have experienced some form of harassment, verbal abuse or physical abuse.

India and Bangladesh both have legal frameworks to prevent and address workplace violence, but full implementation of these laws in the garment industry has been hampered by several factors, including the complexity of apparel supply chains.

The new project will pilot ways to implement existing laws at the factory level through enhanced labour monitoring and remediation systems. One of its main focuses will be on improving relationships between workers, export-oriented garment factories, and the European companies that outsource to them.

To improve the chances of success, business, labour, government and non-profit organisations will all help to design and guide the project, ensuring buy-in from all stakeholder groups.

Up to 90% of workers in some garment factories are women. A high percentage of women workers are also employed in other export-oriented industries, so a key long-term aim is to establish best practices which can be implemented in other industries and countries around the world.

"The benefits to women of a workplace without violence are clear and immediate, and an issue of respect for fundamental human rights," said Erica Van Doorn, director of Fair Wear Foundation.

"Factories also benefit from reducing violence and improving dialogue with workers, which can lead to better morale and increased productivity. As corporate social responsibility concerns among clothing brands grow, factories with functioning anti-violence systems will have a competitive advantage in the international marketplace."

The project will be implemented by SAVE and Cividep in India and by AMRF Society and Awaj Foundation in Bangladesh.

If working overtime without adequate/legal  compensation constitutes a sweat shop, then Gucci is not the only one. Try just about every brand selling in the USA. The story would be far more interesting if the reporter could find out why they are working so much overtime, and why the wages do not meet the legal requirement. I have a feeling Gucci's purchasing practices might come under some scrutiny.
This report is from Just-Style magazine. Written by Richard Woodward

 Luxury Italian fashion brand Gucci has been accused of being a “sweatshop” by five people who used to work in the company’s store in Shenzhen.

China Daily reported that the former employees had complained of having to work overtime without adequate compensation, and of having to get permission to go to the bathroom or have a drink of water.

In an open letter, the ex-workers said they had had to stay on until 2am or 3am to conduct inventory checks, and had seen their salaries cut when items left in their charge were found to have vanished.

According to reports in Beijing, Gucci has so far declined to comment on the reports, except to say that it is investigating the allegations.

Gucci and parent company PPR failed to respond to just-style’s request for comment on the story.

Child Labor on the increase

At a recent conference of Labor Compliance Specialists, the conversation turned to child labor and its resurgence in China. We discussed the possible reasons for this spike. Here are the top 3.

1. A movement of work from the heavily audited east coastal belt into central china where few factories experience the scrutiny of factory audits.
2. Increased labor and material cost but little increase to the cost of the finished goods,
3. A shortage of workers.

With many factories struggling to stay in business and margins shrinking, it is hardly surprising that they try and cut costs. More than ever before, you are at serious risk if you do not have a robust compliance program, not only from being exposed by one of the many NGOs on the ground, but also falling foul of new regulations governing forced and child labor. 

If your factories are not passing on the large cost increases they are experiencing, you have to ask yourselves why.

Here's an Article from just-Style magazine by Leonie Barrie.

Garment, footwear and cotton producers continue to be among the worst offenders when it comes to the use of forced and child labour, according to a new report published by the US Labor Department.

The findings feature in the latest update to the 'List of Goods Produced by Child or Forced Labor' which the government agency was required to produce under the Trafficking Victims Protection Reauthorization Act of 2005. The initial list was published in September 2009, followed by the first update in December last year.

The department looked at a total of 130 goods from 71 countries. It found that 17 countries produced cotton with child or forced labour - including the addition of child labour in cotton production from Mali.

The other 16 countries are unchanged from the last list, and include Argentina, Azerbaijan, Benin, Brazil, Burkina Faso, China, Egypt, Kazakhstan, Kyrgyz Republic, Pakistan, Paraguay, Tajikistan, Turkey, Turkmenistan, Uzbekistan and Zambia.

It also singled out India and Nepal for using forced and child labour in the production of embroidered textiles, and Bangladesh, China and North Korea for textiles.

Six countries (Argentina, China, India, Jordan, Malaysia and Thailand) were claimed guilty of violations in garments, and five (Bangladesh, Brazil, China, India and Indonesia) in footwear.

"These reports provide an overview of international efforts to protect children from hazardous work and identify critical gaps in policy and enforcement that leave them vulnerable," says US Secretary of Labor, Hilda Solis.

"Through increased education and awareness, and critical assistance to families and governments, we can help make exploitative child labour a thing of the past."

While the ILO estimates that more than 215m children are involved in child labour, US officials also point out that some countries with relatively large numbers of goods on the list may not have the most serious problems of child labour or forced labour.

"Often, these are countries that have adopted a more open approach to acknowledgement of the problems, have better research and have allowed information on these issues to be disseminated," they note.

"Such countries include Argentina, Bolivia, Brazil, Colombia, Ecuador, El Salvador, India, Kenya, Mexico, Philippines, Tanzania, Turkey, Uganda and Zambia."

The report also advises companies and industry groups to implement social compliance systems to ensure they are not profiting from "grave labour abuses" in their supply chains.

If things don't change, they'll stay the same

As the old adage goes, "If things don't change, they'll stay the same". I thought I'd start my new blog with a look into the past. This article was written by me in 2004 for a business magazine and some things have changed, but many have not. Overtime and Overtime wages continue to be a thorn in the side of many brands. Fortunately, many Brands are realizing that the old way of trying to audit in compliance has not been successful in dealing with these enduring issues.
We need to figure out the root cause of non compliance, both internal and external, and search for ways to work with factories so they are not punished for issues we are in large part responsible for. It won't be easy, but I firmly believe that progress can be made.
Wally