Vol. IX, Bulletin No.1                                                      January 6, 2004 

Ignoring the Demand of Justice To Make Restitution

More on Wage-Cheating in China

At a toy factory in China, a management memo told workers how they should prepare for an upcoming inspection by an outside monitoring team. They were to memorize false numbers for their wages and working hours, inflating the wages and lowering the hours in order to reflect standards under Chinese laws. And they were promised bonuses for lying to the inspectors.

That is among the revelations contained in a front-page article, "Ruse in Toyland: Chinese Workers' Hidden Woe," published in the December 7 issue of the New York Times as part of its series on "The World's Sweatshop," China.  The article focuses on a factory near Hong Kong, Kin Ki Industrial, whose 850 workers, mostly teen-age girls, make the popular Etch A Sketch drawing toys for the Ohio Art Company in Bryan, Ohio.

Workers at the plant told the Times reporter, Joseph Kahn, that if the company were to pay legal wages, their pay for a month would more than double, to about $200 from $86. A senior Kin Ki executive first disputed these figures, but after also claiming that the company complies strictly with all Chinese laws, he acknowledged that its wages and benefits did fall short of legal requirements. Moreover, Kin Ki company documents obtained by the Times, Kahn writes, "show that it has been paying below-regulation wages -- and seeking to fool foreign clients -- for years."

Toy Industry 'Well Aware' of Law-Breaking, U.S. Industry Chief Says

If those and other damning facts detailed in the lengthy article were untrue, they would be challenged by the international toy business' leading spokesperson, Tom Conley, president of the trade association once called the Toy Manufacturers of America, which three years ago renamed itself the Toy Industry Association (since 80% of all toys sold in the United States are manufactured in China). Instead of disputing Kahn's facts, Conley makes this admission in a letter published in the December 14 Times: "The toy industry is well aware that some Chinese toy factories are not complying with Chinese laws."

So what does he propose to do about the violations, especially those that cheat workers out of their lawful wages? He offers only an expanded program of independent inspections that "leave no room for the kind of deceit" that the Times has revealed.  But the problem is not merely deceit but cheating -- robbing workers of their wages over a period of years.  Justice requires making restitution. Conley ignores that demand of justice. So does the code of conduct that he extols as "the real solution" -- the International Council of Toy Industries' Code of Business Practices.

Workers at the unionized plant of the Ohio Art Company in Bryan, Ohio, made Etch A Sketches for 40 years before its owners three years ago decided to move production to China. One reason, its executives told Kahn, was the soaring cost of health insurance. In China the Kin Ki production workers have no health insurance.

They also have no union. Last summer a brief strike caused Kin Ki to raise wages a few cents a day and improve canteen food slightly, but two strike leaders soon were no longer on the payroll.  According to management, they left voluntarily. According to workers,  management fired them -- made "fried squid" out of them, in local parlance. 

The toy industry has a long history of highly profitable growth based on exploiting young women from China's rural areas. See, for example, "Our Children Don't Need Blood-Stained Toys," published in HRFW eight years ago, and an article of mine, "Toying with Lives," published in American Educator a year ago. For highlights from a previous Kahn article in the Times series, see "China Is World's Sweatshop -- Who Cares?"

How Killing Workers Goes Unpunished

"Workers decapitated on assembly lines, shredded in machinery, burned beyond recognition, electrocuted, buried alive -- all of them killed, investigators concluded, because their employers willfully violated workplace safety laws."

Is that a description of avoidable workplace fatalities in China?  No, this is a scandal made in the USA. The deaths happen here at the rate of 100 workers a year as a result of "intentional wrongdoing or plain indifference" by employers. And, despite U.S. respect for the rule of law, the offending employers are almost never prosecuted.

Those are among the startling findings of an intensive New York Times investigation that resulted in what the Times calls "the first systematic accounting of how this nation confronts employers who kill workers by deliberately violating workplace safety laws." A few of the other findings disclosed in a December 22 article by David Barstow:
Barstow's article, part of a series, "When Workers Die," on how the U.S. government deals with the worst cases of death on the job, is subtitled "A Culture of Reluctance."  That's an understatement. It is a culture of cruel indifference and criminal malfeasance.

For more details on "When Workers Die," see an interactive feature, more photographs, a video, and a slide show narrated by David Barstow online at <http://www.nytimes.com/national>.

Which Way To Go, Mr. CEO?

Let's say you are a top management official at Wal-Mart, Nike, or another major American corporation, and you have come to rely on workers in the People's Republic of China to make a large part of your company's goods and profits. You used to deny that your products are made in sweatshops. Now you realize that the on-site evidence is undeniable. You face pressure to make your company "socially responsible." 

So what to do? You seek guidance from lawyers and other experts. At root, however, the choices you face are two, exemplified by the opposing approaches carefully delineated by two world figures. Here is one approach, capsulized in this quotation:

"In [a free] economy, there is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition, without deception or fraud....

"Few trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible." -- Milton Friedman, the distinguished professor of economics, writing in his best-selling book "Capitalism and Freedom" (page 133, emphasis added).
I call this the not-to-worry approach. It can be very comforting to sweatshop-plagued corporate leaders. It tells them, on the authority of a Nobel Prize winner, that in dedicating themselves to making as much money as possible for their stockholders they are doing the right thing and also fighting to keep our society free.

Then, there's another approach, capsulized in these three propositions:
I call this the you'd better worry approach. It prohibits treating workers as mere instruments of profit. Morally, it places a severe limitation on you even if the existing rules of the game do not.

It's your choice, Mr. CEO.  Which approach will you take?

Global Norms Put Heat on Business

The United Nations Commission on Human Rights will soon consider adopting a set of "Norms on the Responsibilities of Transnational Corporations" covering environmental, labor, and human rights standards. The U.S. Council for International Business, very much in character, is vigorously opposing them. 

The proposed norms, which will be on the agenda of the Human Rights Commission's annual meeting in March, were adopted by a subsidiary unit of the Commission in August, and since then they have provoked sharp controversy between its proponents and business representatives, often in the pages of the Financial Times

In a letter published in that London-based newspaper on December 17, Thomas M.T. Niles, president of the U.S. Council, objected to the norms because, if approved, they would "create a new international legal framework, cutting across virtually every area of business operations, with companies, rather than the governments that negotiated them, responsible for implementing international treaties and conventions." Besides, the norms are unnecessary because "most companies are already [taking human rights seriously]."

In a response published December 19, also in the Financial Times, Mary Robinson, former president of Ireland, former UN High Commissioner for Human Rights, and now executive director of the Ethical Globalization Initiative, wrote:

"Mr. Niles is right to say that many companies are committed to respecting human rights....But Mr. Niles goes too far in suggesting that this is common practice. The great majority of companies around the world have not thought carefully about their responsibilities in relation to human rights.

"A recent survey by the Organization for Economic Cooperation and Development found that only one in five has adopted codes of conduct or shares compliance information with the public. Few companies even mention human rights in their codes of conduct.  Far fewer...employ third-party reporting systems. In more extreme cases, companies are directly responsible for, and complicit in, violations of rights, as recent expert reports of the UN Security Council on the Illegal Exploitation of Natural Resources and Other Sources of Wealth of the Democratic Republic of the Congo clearly show."

Breaking ranks from business opposition, seven companies, including ABB, Novartis, and Barclays, have publicly stated their intentions to "give serious consideration to the role these norms might play in their own work," according to the new Business Leaders' Initiative on Human Rights. Mrs. Robinson, who chairs that group, expressed confidence that there would be "a steady increase in the number of companies that look seriously at international human rights standards when making decisions about their operating methods, personnel policies, procurement, and investment decisions."

Is that optimism justified?  It depends on many factors, including (but not only) the position of the U.S. government, which is one of 53 government members of the UN Human Rights Commission.  The Bush administration is hardly an advocate of expanding international obligations in the area of human rights, labor, and the environment, and relies heavily on the views of organizations like the U.S. Council for International Business. 

Counseling the Council on Why To Take the High Ground

The U.S. Council has not sought my advice, but here it is anyway:
(Unfortunately, the Website of the U.N. Commission on Human Rights and the unit that approved the norms, its Subcommission on the Promotion and Protection of Human Rights, is not user-friendly. The subcommission member who is most responsible for drafting the norms, and whose eight years on the subcommission end in March, David S. Weissbrodt, professor of law at the University of Minnesota, has made the draft norms available on the university Website. For background information, see the Website of the Business and Human Rights Resource Centre and the current Human Rights Brief published by the Washington College of Law.)

Diary: So Far, No Dumb Mistakes

Breakfast finished, Mai, who will be three at the end of February, was wiggling to leave her highchair. "Hold on," my wife said. "I'll unplug you."

"No, Grandma," Mai insisted. "Unbuckle me. Unbuckle, please."

At her present pace, in a few short years Mai should be ready to copyread each edition of Human Rights for Workers before I publish it on the Web. I live in muted dread that I'll go final with a text that has some dumb mistakes. I make use of two kinds of spell checkers, and they catch most of my typos. Careful reading, and rereading, catches others, the ones that the mechanical systems miss.

But spell checkers are blind to factual errors. Like the one I made the other day in the annual Christmas letter I wrote early in December. In describing the family Christmas eve that we would celebrate at our son's house in nearby Ashburn, Virginia, I located it "close to where Lee crossed the Potomac, only to get beaten at Gettysburg."  After most of the letters were in the mail, I got an uneasy feeling about that sentence. I decided to check a map. Of course, Lee's army was actually defeated at Antietam, after crossing the Potomac much farther upriver than I had said. Embarrassing errors, which would be far more embarrassing if they had gone out over the Web.

I launched Human Rights for Workers in February 1996. During those eight years, an occasional typo or punctuation error has slipped through, but (to my knowledge) no really dumb mistake of substance. I'll try to continue that record in the next eight years. But the sooner I get Mai's help the better.
* * *
My wife Dzung edits a Vietnamese literary magazine, Co Thom, which, loosely translated into English, means "fragrant grass," a poetic Vietnamese expression symbolizing the cultural basis of the quarterly publication.  Co Thom promotes Vietnamese literary, artistic, and human values, and has been doing so for eight years now, thanks to volunteer help and donations from Vietnamese-Americans who want to keep the Vietnamese language alive among the many Vietnamese who fled their native land to escape Communism. 

After serving as the magazine's editor for three years, Dzung has just been named its publisher too, which among other things means promoting subscriptions ($30 a year).  If you read Vietnamese, and want to subscribe (as you really should), send me an email, and I'll pass it on to my dear colleague.


Human Rights for Workers: Bulletin No. IX-1    January 6, 2004
Robert A. Senser, editor
Copyright 2004
(Send e-mail)

Back to Home Page