Human Rights for Workers Bulletin

Vol. II, No. 8: May 30, 1997

How U.S. Underwrites China's Repression

"Mr. Chairman, we must stop this trade. If the law is [weak], it must be fixed. If the Chinese continue to violate our sovereignty, then we must act without them."--Harry Wu, executive director of the Laogai Research Foundation, in testimony before the U.S. House subcomittee on international operations and human rights, May 22, 1997.

Kmart and Rainwear

Kmart Corp., the third largest retailer in the U.S., has been selling products made by a company owned by China's military, Harry Wu reported to Kmart stockholders at their annual meeting in Troy, Michigan, May 20.

Wu presented documentation that last year Kmart imported at least 73 tons of men's rainwear and other products from China Tiancheng, a company owned by the political department of the People's Liberation Army. "This company is owned by the political commissar section of the PLA," Wu said. "This is not some joint venture, this is not some capitalist enterprise. These are people who force others to support the Chinese communist party,...the same people who run the military secret police in China."

According to a 1994 letter from a Kmart vice president, the retail chain has "never had any dealings with the People's Liberation Army, nor do we intend to ever have dealings with them." After reading from this letter at the meeting, Wu asked: "Why is Kmart now violating its own policy?...Kmart should be ashamed that it is subsidizing Chinese political commissars and strengthening oppression in China."

A spokeswoman said later that the Kmart will sever ties with the Chinese company if it finds that it is owned by the Communist military.

On Sale: Garments from Behind Bars

Prison Work Newsletter, a publication of the Chinese government, last year described ambitious plans to expand garment production in a prison in Shantou, one of the special economic zones (SEZs) in Guangdong province. Jieyang prison, which had been in the garment business for 12 years, would increase its prison labor force from 150 to 1,500, the newsletter reported. The prison set a goal of earning a million dollars per year through large-scale marketing with the Guangdong Shantou SEZ Jixiang Knitting Garment Factory, working with export businesses in Hong Kong.

Harry Wu's Laogai Research Foundation decided to check out the Jixiang garment factory. Posing as a potential buyer, a Washington area businesswoman, Maranda Yen Shieh, visited the factory recently to explore the export business opportunities it offers. In conversations with the owner during four visits to the factory, she learned:

The garment factory has a contract relationship with Jieyang prison, whose work is periodically checked on site by the factory owner.
Wholesale cost of garments made in the prison are about 30% cheaper than those made in the regular factory, though part of this saving is reduced by bribes to prison officials.
Prisoners who are diligent sometimes get paid something, but, said the owner, "they are forced to labor, you know--they don't have to pay them anything."
The factory has a business relationship with four companies in Hong Kong, which are intermediaries to the international market, although the formal contract is with a trading company owned by the Chinese government.

In testimony before a House subcommittee on foreign relations May 22, Ms. Shieh, who is president of the Greater Washington Network for Democracy in China, said that when she phoned the four companies in Hong Kong, they admitted doing business with the Jixiang factory. She identified them as follows: Roxy Garment Factory Ltd. (sells Esprit brand products), Sam Wing Garment Factory Ltd., Chaifa Holdings Ltd. (sells Playboy, Garfield, and Arnold Palmer brand products), and Worldwise Industrial Ltd.

Ms. Shieh said that her investigation illustrated how China covers its tracks in shipping forced labor products into the world market: "Any private enterprise, new or old, including those in Hong Kong, can be used as a front company for the export of Laogai goods. The Laogai products can then easily be exported to the American market without any trace of the original source."

Office Supplies, Courtesy of Forced Labor by Women

"Very few people," says a New York businessman, " would go into a store and purchase merchandise that was marked 'made in a Chinese prison'." But you can never be sure when you buy imports from China, and the businessman, Peter B. Levy, president of a small office products firm, has a dramatic case in point.

Who'd suspect that a simple U.S. office supply like a binder clip might be assembled by women locked up in a Chinese prison?

Through a casual conversation two years ago, Levy learned that a competitor of his was purchasing binder clips from a manufacturer in China using prison labor to assemble the product. Like many other small firms, Levy's, which employs 20 people, has to cut costs to gain competitive advantage, but "the use of prison labor goes too far," Levy told a House subcommittee on international relations May 22.

After contacting both the U.S. State Department and the U.S. Customs Service, Levy decided that the "United States government was not in a position to effectively investigate this matter." He decided that he had to do so himself. Through a computer search of import data, he learned that his competitor, Officemate International, was importing binder clips from a Chinese company called AIMCO Nanjing. Subsequently, Levy's investigation took him on two visits to Nanjing, first in March 1996 and then in May 1997.

On both visits he spent most of two days in a car following an "AIMCO Nanjing" truck traveling back and forth between the company's factory and a women's prison. Both in 1996 and 1997 he was able to learn the contents of the truck when it stopped for traffic. He simply got out of his car and looked through slots in the cartons stacked on the truck, and was able to identify three different office products, most notably unassembled parts for small (#20) binder clips going in, assembled #20 binder clips coming out.

In his Congressional testimony Levy asked that the Customs Service investigate and that the Justice Department ensure that the laws of the United States are enforced. Videotape taken with the help of Chinese supported his charges, and showed him inspecting the binder clips in the AIMCO truck.

Upon learning of Levy's evidence, Officemate International announced that it had suspended all shipment from the Nanjing factory, since "we are and have always been opposed to such practices."

James Bond, Private Citizen, in Nanjing

The same day that Peter Levy testified, ABC Nightline devoted its full program to the revelations, complete with excerpts from Levy's videotape and a retelling of what Nightline's Ted Koppel called Levy's "James Bond" initiative. Koppel also interviewed Jeffrey Bader, a senior State Department official, and Jeff Fiedler, president of the AFL-CIO's Food and Allied Services Trades Department and a Laogai Foundation director. It was the Foundation that came to Levy's assistance after he failed to get active cooperation from the U.S. government.

On Nightline Bader confirmed what he had said to Koppel in an off-camera discussion earlier--that the U.S. government received much, and perhaps most, of its information on China's prison labor exports from the Laogai Research Foundation. How many people, Koppel asked, does the Foundation have doing this research inside and outside China? Three or four, Fiedler replied. How is it possible, Koppel then wondered, that the Foundation's three or four people could acquire so much more information about prison labor in China than the U.S. government does? Fiedler: "We want to, but they don't."

Bader denied this, and blamed the paucity of official information on inadequate resources: only two Customs agents at the U.S. Embassy in Beijing. Fiedler, however, said that the fundamental flaw of the U.S. government's procedure was to assume that "the Chinese will provide information that shows their guilt."

In Congressional testimony earlier that day, Commissioner George J. Weise said that "prohibiting the importation of convict-made goods is one of the U.S. Customs' national trade enforcement priorities." He complained about the inability to obtain "the necessary proof without the consent of the alleged violator." Under a formal U.S.-China agreement, the Chinese government is supposed to allow Customs agents to visit suspected prison labor facilities within 60 days. In November 1992, for example, the U.S. Embassy first asked the Ministry to arrange a visit to the Shanghai Laodong Machinery Factory. The visit was finally permitted on April 24, 1996.

Needed: Commission on Forced Labor Products

The AFL-CIO's Fiedler proposes additional funding of no more than $2 million a year to Customs and State "for ending U.S. complicity in the forced labor products trade." More substantively, he urged the President to appoint a special commission on forced labor in China, as Clinton has done for sweatshop conditions in the apparel industry.

"This commission, which could be composed of officials from Customs, Treasury, the State Department, and citizens representing business, labor, and the human rights community, should be charged with making proposals to deal with forced labor products," Fiedler said. With the commission's support, Congress would be able to pass effective legislation to replace "an empty diplomatic agreement with real tools of enforcement directed at the source of illegal trade."

(For background information on the Laogai Research Foundation, check its Web site at http://www.laogai.org/)

Robert A. Senser
Editor, Human Rights for Workers
http://www.senser.com
(Send e-mail)

Bulletin No. II-8: May 30, 1997

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