New report from the Global Labor Rights

http://www.globallabourrights.org/reports?id=0656

The link above takes you to new allegations against Wal-mart and Disney, in the wake of the Bangladeshi fire that killed over 100 workers. This is a bit like the mass shootings at a school in Connecticut last week. We all wring our hands with sorrow when these events occur, but do little to prevent them from happening. Let me re-phrase that. We DO many things, but not many that are effective, and we do the same things over and over again, with little impact.
It is time to change.

Could this happen in one of your factories?
Don't know?

Maybe it is time to take a good look.

Wally

Here we go again

Here is a link to another story giving details of a blaze at a Bangladeshi apparel factory. This might be one of your factories. Do you know where your products are made?

http://www.huffingtonpost.com/huff-wires/20121126/as-bangladesh-factory-fire/?utm_hp_ref=business&ir=business

Labor Compliance programs at your company are not just a nicety. They can help prevent tragedies like this from occuring. How many more deaths will it take to have your suppliers take ownership of compliance?

Apparel Industry Trends - From Farm to Factory

This report, by an organization called "Free2work" provides detailed information on fifty apparel companies’ CSR practices: In their words "It assesses each management system in four categories: Policies, Traceability & Transparency, Monitoring & Training, and Worker Rights. Each Free2Work indicator correlates with a piece of a system that should, if appropriately used, enable improvement in working conditions and the elimination of modern slavery. We hold that child and forced labor are far less likely in supply chains that are highly visible to companies and where workers have a voice to negotiate working conditions and speak out against grievances."

The report can be accessed through this link.
 http://www.free2work.org/trends/apparel/Apparel-Industry-Trends-2012.pdf

There has been much improvement over the last 10 years, but as this report shows, there is a lot more to do. For some, they have not even started yet.
For those companies that are in the same position at the bottom of the grade, Fair Labor Solutions can help create a path to the top.
Contact me through this site if you are interested.
Regards
Wally

Compliance initiatives to move your program forward

If you are thinking of updating your compliance program and are not quite sure what direction to take, have a listen to this recording of a webinar I did just recently on that very subject. Contact me if you need further details.

Recording Link to the Webinar:https://metricstream.webex.com/metricstream/lsr.php?AT=pb&SP=EC&rID=62050497&rKey=a0767c3fb8c39f6a

PDF Link of the Presentation: http://www.metricstream.com/presentations/Sustainable-Social-Compliance-Programs-%20Increasing-Supplier-Ownership.pdf

Towards a safe, just workplace. A report by the As You Sow foundation.

I am bringing this to your attention, as the summary of the report (see below) is also a summary of what I have identified as the way forward for more effective and sustainable compliance. The full report can be accessed here

http://www.asyousow.org/publications/2010%20Safe%20Just%20Workplace%20Report.pdf

 

If you would like to implement any of these recommendations, but are not sure how to, or have limited resources, contact me.

 

As You Sow’s research finds that in order for apparel brands and retailers to continue to improve compliance both

with their codes of conduct and conditions for workers, companies should:

• put more resources into continuous improvement – working with suppliers to build management capacity, training

workers and managers on labor rights and health and safety, as well as tracking key performance indicators;

• place greater emphasis on initiatives specifically aimed at empowering workers;

• integrate factory compliance performance into compensation for executives in headquarters. Evaluating executives

on working conditions in factories throughout the supply chain brings attention to workers to center stage;

• analyze their purchasing practices to assess if internal policies could be exacerbating compliance violations and

commit resources to improve those practices;

• develop more sophisticated technology to track the resolution and recurrence of compliance violations; and

• increase detailed public reporting on specific supply chain audit findings and remediation actions.

Regards
Wally

Join my Webinar

 Here is a link to a webinar I am hosting about labor compliance. It is on Thursday, Sept. 20^th 2012

 

Time: 8 am Pacific | 11 am Eastern

 

Please join me if you can.

 http://info.metricstream.com/social-compliance-program.html?utm_source=Campaigns&utm_medium=Email&utm_campaign=Sep20_WC_Social_Compliance_Werbinar&Cid=70150000000chNy&Channel=Webinar

Key discussion points:

• How to increase supplier involvement and ownership
• Setting up audit scope: social and fair labor, environmental, workplace health and safety
• Developing management system assessments to understand root cause
• Managing Vendor Compliance program
• Building an approach for Sustainability
• Brand Collaboration to share results

Recent Olympic merchandise claims.

In a recent report, The Daily Telegraph discovered that machinists were working up to 10 hours a day, six days a week, to produce the official Olympics merchandise that thousands of fans will buy in stores throughout Britain.

Living in squalid conditions, workers said they earned a basic salary of $61 (£40) a month for working eight hours a day, six days a week, plus a $5 allowance for health care. They said they could take their wages up to $120 (£78) by increasing their hours to 10 per day.

Adidas insisted on Friday that workers at the factory made an average of $130 a month, and would get a pay rise later this year, along with other garment industry workers.

A spokesman for Adidas confirmed that the Phnom Penh factory produced Olympic "fanwear" but denied that the workers' pay and conditions were in breach of the organising committee's standards.
"Adidas is confident we comply with all Locog standards. Workers at the factory earn an average of $130 a month, which is well above the minimum wage," he said.

A Locog spokesman said: "We understand that the Shen Zhou factory is part of the International Labour Organisation labour rights programme, which means that it is inspected."

In this case, Locog are correct. The daily Telegraph is correct and Adidas are also correct. So what is the issue?

Well, if you go into the ILO/better Work web site, you will see that the above hours of work and overtime claims are legal. Adidas is working in a factory that meets the ILO core conventions.

However, they also have statistics such as these;

• 97% of factories audited in the last 6 months are out of compliance with overtime restrictions.
• During  the  reporting  period, garment  factories  experienced  27  strikes  involving  36,053 workers. This represents approximately a doubling of the number of strikes and the number of  workers involved as compared to the last reporting period.

Couple this with the reports of late about workers fainting in factories, clearly all is not well.

Take a good look at the better factories report, especially if you are working in Cambodia. It makes good reading.

Sourcing practices at odds with compliance goals

This story from the Financial Times gives a bit more information about Nike's assertion that their business practices can exacerbate a factory's ability to meet compliance goals.

http://www.ft.com/cms/s/0/d609cf9e-a434-11e1-84b1-00144feabdc0.html#axzz1z67lVImy

If Brands are really interested in making improvements to working conditions in their supply chain, they need to take a long hard look at their own sourcing practices.
Maybe if I say this long enough and loud enough, someone might take notice.

1000 workers riot in Foxconn factory.

I was having dinner last night with a good friend who's opinions I value. He said that I come across in this blog as a bit of an Apple hater and that I should tone it down.  If anyone else thinks this then I apologize. Apple is no worse than any other US brand making in China. My goal here is not to vilify Apple so much, rather it is to point out some obvious inadequacies in their Labor Compliance process.

Unless they focus on Root Causes, and Yes, that might mean taking a good look at their business practices, the improvements they say they will make will not happen anytime soon.
In a a recent article about 1000 workers in a Foxconn factory rioting, workers said the improvements promised are not happening. Whilst the reason for the riot was not labor related, tensions between management and workers remain high.

Here's a report from the Guardian outling recent investigations from SACOM, an NGO in Hong Kong

http://www.guardian.co.uk/technology/2012/may/30/foxconn-abuses-despite-apple-reforms?newsfeed=true

I reiterate that unless Apple, or any other company engaged in Labor Compliance understands the probable impact that their business practices and sourcing decisions have on a factory's ability to meet their compliance objectives, they will fail to deliver on their promises.
Regards
Wally

Labor unrest continues in China and Cambodia.

Here are two reports from this month, one in China http://www.rfa.org/english/news/china/death-05292012103808.html and one in Cambodia, see below.  Both reports are from Radio Free Asia.

Heavy handedness by factory management and local police were a factor in both protests getting out of hand. Low wages, and non payment of wages also seem to be the trigger.

Thousands Protest Garment Factory Conditions

2012-05-21

On their third straight day of protests, Cambodian workers take their demands to the government.

Some 3,000 employees of a textile factory in Cambodia’s capital of Phnom Penh gathered to demand better working conditions on Monday, in one of the largest recent strikes to hit a garment industry plagued by complaints of low wages and few protections for labor rights.
On the third day of their strike, workers from the Chinese-owned SL Garment Processing Cambodia company’s two factories in the outskirts of Phnom Penh took their protest downtown, gathering in front of the Social and Labor Ministry building in the capital.
The protesters said they were determined to continue the mass strike until they receive better working conditions, benefits, and protection of their rights.
“If we don't have a solution, what will we do next? We will struggle until we can see a solution,” one worker shouted at the protest.
The demands are not an unusual refrain in the country’s garment factories, which are the country’s largest employers and hire more than 300,000 people, mostly women.
Art Thun, president of the Coalition of Cambodian Apparel Workers' Democratic Union, said the company should address the workers’ concerns.
“They will go to negotiate right at the factory, since whether or not the factory owner agrees [to their conditions] they still need to seek a proper solution for the workers. The owner can't avoid responsibility for this matter,” he said.
The factory’s management has condemned the strike as illegal and warned protesters not to try to take over the factory buildings.
“Don’t take any action to incite or lead workers to block the entrance gates to the SL factory companies,” a member of the management company shouted to the strikers through a loudspeaker.
Strikes and protests are not uncommon at textile factories, where laborers often work long shifts for little pay.
In February, protests by two thousand workers at the Chinese-owned Manhattan Textile and Garment Corp’s factory in southeastern Cambodia’s Kampong Cham province turned violent when workers blocked a national highway and vandalized the factory.
The industry has also been rocked by nearly a dozen incidents of mass fainting in the past year. The faintings are mostly blamed on workers' poor health, bad ventilation in the workplace, or exposure to dangerous chemicals, although some factory managements have disputed this.
Reported by Uon Chhin for RFA’s Khmer service. Translated by Taing Sarada. Written in English by Rachel Vandenbrink

Apple, meet Nike.

Leonie Barrie of Juststyle has posted this news from Nike.
In it, there is a snippet of information that Apple may need to take notice of if they are to achieve their stated goal of resolving their overtime issues.

I quote, "But the company says in some areas "progress was slower than targeted," including the reduction of excessive overtime within factories. Crucially, 68% of excessive overtime incidents in 128 factories were found to be due to factors that Nike itself could influence".

68%, just in case you missed that.

So Apple, tell me again how you are going to manage this task if you are not taking a long hard look internally and addressing the  impacts of your own purchasing/sourcing practices.

Thank you Nike for bring this to their attention

Bangladeshi workers fight back

Warning;

This report makes grim reading.

It also offers some hope that the violations detailed in the report are being taken seriously by the brands using this company.

"How did they not know this was happening?" you might reasonably ask.
Record falsification is a frequent and common problem. In this particular case, the management at both factories seem to be particularly aggressive in their use of it. Bribery and corruption of auditors by factory management are also common problems.

Read the full report here and ask yourselves, could this be happening in my supply chain. The answer is of course, it might. If you are not engaging with your factories first hand, and are not reviewing their management systems to see if they have the capability to meet compliance codes of conduct, this could well be you.

FLA finds evidence that dogs eat bones

Well, this isn't exactly what they found at the Apple factories, but it might have well been. Finding labor violations in factories in China is hardly rocket science. What they didn't find, as far as I can see, is why these violations occur in the first place. Without this critical information, their assertion that this will get fixed within 15 months is just not believable. If Apple don't take a hard look at their purchasing practices, this will turn out to be a very expensive PR stunt.
There are SO many reports and studies out there that indicate these have a significant impact on a factory's ability to meet the compliance demands.
Take the blinkers off Apple and take a look, you might learn something.

Mike Daisey's alleged Foxconn fabrications

For those of you who have been following the Apple/Foxconn story, you will be aware of  Mike Daisey's acclaimed one-man show "The Agony and the Ecstasy of Steve Jobs," in which he talks about visiting a factory in China that makes iPhones and other Apple products. This American Life show on NPR has issued a retraction because they can't vouch for its truth. He allegedly made up parts of his story, namely child labor, armed guards, chemical injuries etc.
Here's a link to the NPR retraction and interview with Mike Daisey. In the 3rd section, they interview the reporter from the NYT who describes what they actually found and also some of the statements made by Apple executives. There is a large part of the story that is not getting any airtime, and that has to do with why they, and many other companies, are working so much overtime in the first place.
I wrote to Ira Glass. See below;

Dear Ira,

I’d like to add some info that the NY Times team and Apple have not covered. I didn’t hear anyone discuss the reasons why so much overtime is being worked in the first place. In many cases, the buying practices of these companies are not compatible with corporate codes of conduct. Without getting to the root cause of these long term code violations, it will be impossible to correct or enforce. Faced with the need to meet a customer’s delivery and margin expectations, and also meet code provisions (60 hours), most factories falsify the records. Overtime and minimum wage violations are common, and never really go away. Why? Because in many cases, our corporate culture and business practices are at the root of it. Companies turn a blind eye to this as long as the factory has some improvements and is seen as willing to engage in continuous improvement. The factories know this and “play the game”, without ever addressing the long term issues.

One of the executives at Apple was quoted as saying if Apple wanted to, Apple could enforce codes of conduct and the factory would do it. This is not true. Unless they address their own business practices to make sure they are compatible with their own code of conduct, their factories will continue to be out of compliance.

Here’s a link to an article I wrote back in 2004. http://www.allbusiness.com/manufacturing/apparel-other-finished-products-made/4397949-1.html

As you can see, this is still not being taken seriously, except by a small number of brands, such as Nike, Gap. You can read their efforts to address this in their annual CSR reports.

Apple should know better.

Wally

Recent Article from the Brtish press

One of two reports surfacing from the UK this week. This is disturbing for 2 reasons.

1/ How did BHS not know that this factory may be of higher risk. Many factories where the management is not of the same nationality as the workers can, and do have problems with worker/supervisor relations.
2/ The requirement for suppliers to show they have a process for following the client's code of conduct would appear to be non existant.

Do you know what is happening in your supply chain? If you don't, this might be a report on one of your factories.

Get involved.

[Daily Mail] BHS knitwear is made by 'beaten and humiliated Bangladeshi sweatshop workers who are paid 10p an hour'

Daily Mail  |  March 14, 2012  |  Share  |  Source article

A high street chain is selling clothes made by sweatshop 'slaves' who are paid just 10p per hour, a report claims.
Workers making knitwear for Bhs are regularly beaten, threatened, stripped of their rights and imprisoned on false charges, according to workers' rights investigators.
The Philip Green-owned department store chain is among a string of brands who have items produced at the Chinese-owned Rosita and Megatex factories in the North Bengal region of Bangladesh.
Investigators say that the factories' thousands of workers toil seven-day, 84-hour work weeks in conditions where every Bangladeshi labour law is routinely and systematically violated.
Now BHS, owned by billionaire fashion tycoon Sir Philip Green, has been called on to intervene.
The High Street giant, which sells its knitwear for between £15 and £35, boasts in its code of conduct: 'When customers buy our goods we want them to be confident that they have been produced under acceptable conditions.'
Last night a spokesman for BHS told The Sun the company was 'urgently' investigating with a supplier who had used the factories.
'It appears there have been a number of violations of our code,' the spokesman said.
Five thousand Bengali workers toil under Chinese management at the two factories, in conditions that a report by the Institute for Global Labour and Human Rights likens to a 'minimum security prison'.
During peak season - when overtime is mandatory - shifts last a gruelling 13 hours, from from 8am to 9pm, six days a week.
On Fridays, supposedly the workers' day off, there is a further six-hour shift from 7am to 1pm, meaning staff are routinely at the factory 84 hours a week.
According to the report, most knitters are on their feet for the entire duration of their shifts.
Corporal punishment is common at the factories, with workers who arrive late forced to stand to attention for at least for hours, without talking, turning their heads or even going to the bathroom.
In one shocking case, a woman who complained that a supervisor was pestering her for sex claimed she was then targeted for a savage beating by two other senior staff members.
Workers smuggled out labels to prove that they were making clothes for BHS and other major fashion companies worldwide.
BHS parent company Arcadia, which also owns Burton, Top Shop and Dorothy Perkins made profits of £190.4million last year.
The Bengali factory workers 10p pay means it would take 320 hours' labour to earn enough money for a £32 'multi-stitch' jumper from BHS's Olive and Olivia range.
Charles Kernaghan, director of the Institute for Global Labour and Human Rights, said: 'The Chinese-owned Rosita and Megatex plants routinely and systematically violate every labour law in Bangladesh as well as the International Labor Organization's core internationally recognised worker rights standards.
'Under Chinese management, the factories are operated like minimum security prisons. Under such circumstances, the workers are trapped.'
He added: 'The international labels must immediately intervene to end the gross violations and restore the rule of law.'

Update on the violence in Cambodia

Here's an article from Just Style, written by Leonie Barrie.

It would have been nice to see some kind of message from the Brands and Retailers to the effect that they would be willing to address the root cause of low wages and overtime, as well as putting pressure on the government. A little bit of introspection here wouldn't go amiss.

Just sayin'.

 

CAMBODIA: Apparel coalition calls for end to violent unrest

Author: Leonie Barrie | 12 March 2012

Brands and retailers including Puma, H&M, Gap Inc, Columbia Sportswear, American Eagle Outfitters, The Jones Group, Warnaco Inc and Lululemon Athletica have joined a coalition of industry groups calling for an end to the violent unrest that continues to plague Cambodia's garment sector.
Their action has been prompted by an incident in the Manhattan Special Economic Zone (SEZ) last month, where three female workers at Puma supplier Kaoway Sports Ltd were shot and injured, and products and facilities of Kaoway, Kingmaker and Sheico were damaged by demonstrators.
A letter sent last week to Cambodia's Minister of Commerce, HE Cham Prasidh, urges the government to conduct a "full and transparent investigation into the recent activities."
"We hope the government will redouble efforts to create a safe and stable environment for workers and businesses in the country," add the groups, which include the American Apparel & Footwear Association (AAFA), along with the Fair Labor Association (FLA), and the Ethical Trading Initiative.
"We had hoped that the agreements set out by the local authority were satisfactory enough for all parties to settle their differences and begin to rebuild industrial peace.
"We respectfully urge the Royal Government of Cambodia to conduct a full and transparent investigation into the recent activities in the Manhattan SEZ and hold those responsible for injuring workers accountable."
The coalition says it will continue to stand by Cambodia "through this period and support constructive dialogue between all parties.
In 2011, Cambodia supplied nearly $2.6bn worth of apparel to the US, making it the sixth largest supplier.

Shooting at Puma factory in Cambodia

Despite the increase in social audits in countries like Cambodia, China, and Vietnam, the incidents of worker unrest have risen. Here's a recent report from Reuters discussing a serious incident in one of Puma's factories.
http://www.reuters.com/article/2012/02/23/puma-cambodia-idUSL5E8DN8S820120223

This suggests to me that auditing factories to company codes of conduct is not having the desired impact on workers' lives. I'm sorry if you have heard that from me before, but it really pisses me off .
How many more articles like this will it take to pursuade Brands to look at the root cause of worker unrest instead of uncovering the symptoms.

Hello, is anyone in there?

In all of the statements Apple has made recently about its fair labor program and practices, I have not heard or seen once, any mention of their business practices impacting their factories' ability to meet their code of conduct. Not once. They are either in total denial or not aware of their impact. The impact of business practices, such as short lead times and pushing factories for better margins despite increases in the labor wages and raw materials, is well documented by those that have accepted that they may be part of the problem, such as Nike, Gap, Levis etc. Apple have no chance in gaining full compliance at their factories without understanding the root causes. SACOM  (Students and Scholars Against Corporate Misbehavior) have pointed out to Apple that this is something they should be aware of. They might try and make the case that they were unaware of this. However, now they know, yesterday was ignorance, tomorrow is negligence.

I hope the FLA staff do a better job than their President and bring these issues to the attention of Mr Cook.

Cambodian "People's Tribunal"

Here's an interesting article from Leonie Barrie, of Just Style Magazine.

Groups representing Cambodian garment workers are holding a "people's tribunal" next week to investigate pay and conditions at factories making clothes for brands including Adidas, Puma, H&M and Gap.

The two-day hearing in Phnom Penh follows a spate of mass faintings in the sector, as well as a series of strikes. It hopes to draw attention to the concerns of those employed in the garment sector - as well as a fair wage commitment from firms sourcing from Cambodia.

Unions and human rights groups will call evidence from a wide variety of stakeholders from the Cambodian garment industry, including workers, manufacturers, and multinational brands.
For the whole article, click here

The Brands mentioned have significant compliance programs, and I'm sure they are all aware of these issues. All garment factories in Cambodia have to be registered with the Better Work program and as such, agree to audits by the ILO, so they will also be aware. With such high profile scrutiny, you have to ask yourself why these issues are still there.

The following quote from the article may give you a clue.

"With this tribunal we hope to see some real commitment from big brands buying from Cambodia to start addressing the real needs of their workers - a living wage should be at the root of company policies," says Jeroen Merk, Clean Clothes Campaign international secretariat.

Apple in the press and feeling the squeeze

Sorry for the title. I couldn't resist it.
The New York Times put out an article last week about the compliance problems at Apple factories. I also received a request from the Huffington Post to comment on it, which I did. The Internet has been buzzing with indignation by Apple users and tech bloggers, and boycotts of their products have been called for. There wasn't much new in the report, except that they had a few quotes from ex Apple executives saying that business basically trumps compliance. And why, I ask, is this news? It would be a brave executive that would stand up and say " Let's reduce our profit forecast so we can pay factory workers more money".
This is more the reality.
“The only way you make money working for Apple is figuring out how to do things more efficiently or cheaper,” said an executive at one company that helped bring the iPad to market. “And then they’ll come back the next year, and force a 10 percent price cut.”
Here's the article in full

Explosian in Apple component factory

The scrutiny by Chinese NGOs is not abating. If anything, it is getting stronger.
Here's a report from the Washington Post by Hayley Tsukayama,

Chinese officials are investigating an explosion last weekend at another factory in China that makes components for Apple products.

Apple supplier Pegatron Corp. said in a statement that the explosion at the Shanghai factory occurred in dust collection equipment, the Associated Press reported Tuesday. The wire service said local media reported that 61 people were hurt and more than 20 hospitalized but that none had life-threatening injuries.

The explosion rocked the Riteng Computer Accessory Co., a wholly owned subsidiary of Pegatron, in Shanghai’s Songjiang district. The early details of the blast appear to closely mirror a blast at another Apple supplier’s plant earlier this year.

In May, an explosion at a Chengdu plant run by Foxconn killed three workers. The accident was believed to be caused by combustible dust in an air duct. Buildup of aluminum dust had been flagged as a workplace hazard just months earlier by a labor advocacy group called Student and Scholars Against Corporate Misbehavior.

Apple has faced scrutiny from such groups in the past for the labor practices at companies — particularly Chinese companies — that produce components for its popular consumer technology gadgets. In its 2011 Supplier Responsibility 2011 Progress Report, Apple said that it asked for an independent suicide prevention review of the conditions at a Shenzhen plant and was investigating a report that workers at a different company had been exposed to unsafe chemicals.

Apple did not immediately respond to a request for comment on the Shanghai explosion. Company spokeswoman Carolyn Wu told the AP in China: “Our hearts go out to the people who were hurt in Songjiang. We are working closely with Pegatron to understand the cause of this accident.”

How Local Watchdog Groups, Not Western Companies, Are Shaping Business Practices in China

Here's an interesting story from Forbes Magazine. I know I have been bleating on for years about sustainable CSR being achieved through worker inclusion and factories taking ownership of their compliance policies and process, but it is nice to see such a formidable magazine coming to the same conclusions. Here's a link to the article in full

http://www.forbes.com/sites/amywestervelt/2011/12/06/how-local-watchdog-groups-not-western-companies-are-shaping-business-practices-in-china/