Vol. VII, Bulletin No. 10.                                                          November 12, 2002 

In Spite of Corporate Codes of Conduct
 
Sweatshops Still Plague China's Workers

New field research reveals the sweatshop conditions that prevail in two large South China factories manufacturing athletic shoes for export to the United States and elsewhere. The factories' 50,000 workers, mostly young women, average about 25 cents an hour (after deductions for food and other fees) making brand-name sneakers for Adidas, Nike, and Reebok.

The study, prepared and issued by the New York City-based China Labor Watch, charges that the three corporations' contractor-owned factories in Dongguan City violate a series of China's labor laws and regulations, including those covering these subjects:

    Working Hours.  In violation of a ban on overtime exceeding 36 hours a month, management routinely requires overtime of up to 86 hours a month.

    Overtime Pay.  In violation of the legal requirement to pay double time for Saturday work, management pays only the standard rate. Other premium rates legally required for overtime are also ignored.

    Leaves and Vacations.  Workers are routinely denied legally required time off. During the Chinese New Year, for example, management grants only four days' vacation to workers legally entitled a month to visit distant families. Workers who quit during the New Year festival are often unable to collect their last month's pay.

    Discrimination.  Women older than 25 won't be hired; those already employed can stay, and many do, knowing that they are usually deemed too old to get a job elsewhere.

Workers making sneakers for the three multinational corporations are covered by the corporations' codes of conduct. Nike's, for example, declares: "We are driven to do not only what is required by law, but what is expected of a leader. We expect our business partners [contractors] to do the same."

The factories do comply with laws on worker representation and collective agreements, but that compliance itself reflects how China's legislation violates core worker rights.

Li Qiang, executive director of China Labor Watch, was a labor activist in China, so active, in fact, that about two years ago he had to flee to escape arrest.  Before then, during several visits to the two Dongguan factories highlighted in the report, he managed to interview more than 30 workers and get copies of their payslips and other documents, including a collective agreement. That information was updated to as late as October with the help of his contacts in Dongguan.

Alarm Bells for Hong Kong's Future

Five years ago, when the British colony of Hong Kong became a Special Administrative Region of the People's Republic of China, only the wildly optimistic thought that a real trade union would long exist there in 2002. But it does.  The 150,000-member Hong Kong Confederation of  Trade Unions is alive and well, thank you. And its leader, Lee Cheuk Yan, has even dared criticize one of mainland China's key institutions, the All-China Federation of Trade Unions. 

Not only that. Many other private organizations -- universities, social welfare groups, churches, political parties, human rights organizations, and other people-based associations -- still thrive in Hong Kong. But for how much longer?   When I visited Hong Kong two years ago, I found that organizations with long histories of human rights advocacy were especially concerned about their future. One activist told me: "They are watching us." 

Those concerns have now heightened. In spite of Beijing's 1997 promise of "one nation, two systems," its ruling representative in Hong Kong, Tung Chee-hwa, has taken gradual steps to erode Hong Kong's freedoms. His latest move came this fall when he introduced a formal proposal to outlaw  "subversion."  Martin Lee, chairman of Hong Kong's Democratic Party, challenged the proposal, claiming that no anti-subversion law is necessary. "Five years have passed since the changeover," he said in a statement, "and Hong Kong is politically stable."

True enough. But the rulers of the People's Republic are less concerned about stability in Hong Kong than about stability in Beijing and the rest of China. They insisted  Hong Kong's constitution require its government to enact legislation to prohibit "any act of...subversion against the Central People's Republic...to prohibit foreign political organizations or bodies from conducting political activities in the Region, and to prohibit political organizations or bodies of the Region from establishing ties with foreign political organizations and bodies."  Beijing's fear of "subversion" remains strong, especially since the surprise emergence of the Fallen Gong, outlawed by Beijing as an "evil cult" with foreign ties but still legal in Hong Kong.

Hong Kong Chief Executive Tung's administration argues that the draft legislation contains protections against abuses, including judicial appeals. But the Hong Kong government is subordinate to the Central People's Republic. So are its courts. Hence, it will be up to Beijing to decide what "subversion" means in practice. It isn't just the Falun Gong movement that conducts international campaigns upsetting Beijing. The HKCTU and other NGOs in Hong Kong are also involved internationally in pressing for freedom of association throughout China and for the release of jailed activists. Han Dongfang, co-founder of a free trade union in Beijing during the 1989 mass demonstrations, who spent 24 tortuous months in prison as a result, is now in Hong Kong making Radio Free Asia broadcast into China about the plight of ordinary workers in China and about the ACFTU's failure to represent their interests.

In addition, a network of Hong Kong organizations have long done the research, and supply the detailed reports, exposing how many millions of China's most vulnerable people, especially young women, are exploited in South China factories that mass produce shoes, toys, garments, and other goods for the American and other foreign markets. It is not hard to imagine how eager China's collaborators in this exploitation -- factory managers, local officials, and government ministries, including China's military -- are to get such organizations shut down as subversive.

Seeking Freedom of Choice for Consumers

One value -- the value -- of the free market system is that it offers consumers choices when they shop.  A fundamental flaw of the expanding global economy, however, is that as it produces more and more of the world's goods, it increasingly deprives consumers of the freedom to choose things not made in sweatshops. Corporate codes of conduct don't correct that flaw. U.S. law doesn't correct it. World trade officials shrink from even discussing it.

Some consumers are becoming frustrated. "My family is in the process of changing some of our habits regarding the clothing we wear," a Canadian woman wrote me last month. "We have decided not to support clothing made in Third World countries due to the abusive labor conditions there. Do you have any tips on where to buy clothes made in North America?"

As it happened, I had recently bought a casual jacket bearing the label made in Canada/fabrique au Canada. But useful tips I could not offer. To find clothing made in North America takes perseverance.  I did point her to a new initiative that, starting in a small way, seeks to offer choices to conscientious consumers.

You can check it out at a Website offering a new line of  products bearing the brandname of No Sweat: <http://www.nosweatapparel.com>. There you'll find a limited selection of T-shirts ($16) and athletic apparel (a sports bra for $22), all unstained by sweatshop labor. The plan is to expand to a full line of casual and athletic wear -- all made by unionized workers in the United States, Canada, the European Union, and the developing world. That's ambitious enough by itself, but Bienestar International, the corporation newly formed to market No Sweat goods, has the long-range goal of reforming the whole apparel industry.

"With your help, we can show the garment industry what a real fashion statement looks like," says the No Sweat Website.

One of the founders of Bienestar International is Jeff Ballinger, long time worker rights activist. (Full disclosure: Jeff once was a co-worker with me in the Asian-American Free Labor Institute, now a part of the AFL-CIO's Solidarity Center.)  Ironically, for nearly two decades, Ballinger has campaigned against Nike and other corporations that depend on "outsourcing" -- instead of making products themselves, having them made by myriad contractors around the world.  Now he's not only a corporate official himself, but his corporation relies completely on outsourcing.  What's up?

"It comes from frustration," he explains in an interview on the Website.  Instead of just criticizing outsourcing and exposing its sweatshops, as he has for nearly two decades, Ballinger hopes to help demonstrate that "outsourcing can be reformed."  The basic strategy is to outsource only from unionized firms, including those in Indonesia and Bangladesh, and thereby, with consumer support, establishing enough of a competitive model that, over time, will change the existing system of exploitation.

There's no silver bullet that will slay the evil of sweatshops. But if Bienestar International were to become even a small success in a huge industry, it could become a model to persuade:

Far fetched?  Maybe. But Bienestar International is demonstrating the kind of entrepreneurial leadership that the private enterprise system extols. Its No Sweat initiative certainly responds to the needs of conscientious consumers. It also deserves the support of far-sighted investors. 

The Mess Facing Brazil -- And the World

The popular trade unionist, Luiz Inacio Lula da Silva, who was elected president of Brazil on October 27, inherits a gigantic mess, says Economist James K. Galbraith in a Levy Institute policy paper titled "The Brazilian Swindle and the Larger International Monetary Problem."  The "swindle," Galbraith writes, is the International Monetary Fund's $30 billion loan to Brazil, which is designed, he charges, not to help Brazil but to bail out Wall Street and international lenders.

Further, Galbraith analyzes today's world trading and investment regime and finds it "hopelessly distorted," skewed to provide "unprecedented prosperity in the rich countries and deepening crisis for the poor."  The outlook, in his eyes, is grim:
"It is a minor miracle that [these distortions] have not long since led to a full-scale revolt against U.S. global leadership. But the fact is, such a revolt may not be very far off. There already exists widespread rejection of American world leadership by the populations of developing countries worldwide, and the reputation once enjoyed by the United States as a pillar of multilateral order, having respect for differences and fair play, has long since been squandered.."
Galbraith advocates "a global order that serves the interests of debtors at least as well as creditors," and sketches how this goal might be reached.

Diary: Time Off in the Lap of Luxury    

My wife and I were sitting comfortably at a poolside table, two of the 2,000 passengers aboard a luxury liner, the Constellation, off the coast of Italy. We were enjoying an 11-day cruise in the Western Mediterranean last month on a Liberia-flagged ship of the type I had once criticized as a floating  sweatshop. While my wife was reading, I jotted down question in my notebook: "Can a cruise on a luxury ship like this be a place for meditation?"  My answer: "Yes, I think so."

It may have been just a personal justification, however feeble, for investing so much time and money on this two-week vacation.  That morning, though, I didn't really feel guilty.  I was planning to soak in a warm saltwater spa, mainly to soothe the arthritis in my back, which gives me trouble from time to time. The bubbling spa had a five-person limit, however, and the four persons already occupying it made it seem overcrowded.  So I took the time to read and write and reflect.

In the days before our departure, I had looked for some reading material to take along.  I scanned my shelves and those of Barnes and Noble. Nothing seemed right. Then, just hours before leaving home, I picked something light -- light in weight, that is -- a booklet with a long letter issued by Pope John Paul II on May Day, 1991, under the title of Centisimus Annus. At the time I had read it thoughtfully enough to highlight impressive passages in yellow and red, and even indexed it under some of my favorite subjects. Now, in rereading it, I used a green highlighter, and began a new index for subjects of interest.

Too bad Centisimus Annus doesn't have a catchier title. Its English title, "On the Hundredth Anniversary of Rerum Novarum," is also dull. But strange as it may seem, rereading the Papal letter was a fascinating experience, partly because of the contrast between some of the Pope's ideas and the environment of the cruise ship, as well as the U.S political environment.  I made some notes about a chapter titled "Private Property and the Universal Destination of Material Goods." The subject has a special fascination for me. Why?  Because, I wrote, there is such a vast disparity, in everyday life and understanding, between the importance accorded to private property (i.e., to the rights of those who own it in abundance) and the importance accorded to "the universal destination of material goods," that is, the principle that private property is not an absolute right and that it must serve the common good.

Meaning what?  That, for example, the free market must, in John Paul's words, "be appropriately controlled by the forces of society and by the State, so as to guarantee that the basic needs of the whole of society are satisfied."  And that, as another example, the foreign debts of developing countries should be canceled or reduced in accordance with "the fundamental right of peoples to subsistence and progress."

I also reflected on how the stock market's movements dominated the TV news broadcasts of CNN International and CNBC. I wrote:

"Here we [my wife and I] are wondering about the latest about the sniper terrorizing the Washington area, and almost all we get is what IBM, GE, and other stocks, U.S. and worldwide, are doing. That makes sense, come to think of it, since so many people traveling on this ship, and elsewhere, have money tied up on Wall Street. At least, that's something my wife and I don't have to worry about. But what if we had a few hundred thousand dollars dependent on the ups and downs of Wall Street?...Then how much time would I be glued to my cabin's TV monitoring the prices of my stocks?  Would I be more concerned about my own enrichment than about how well 'my' companies were exercising their social responsibilities in the U.S. and around the world?"

I finally spent 20 minutes in the spa that day, and again the following day. My back felt reinvigorated, but soon I started sniffling, coughing, and sneezing. I put an end to any further spa-ing. Instead, often with a napkin at my nose, I joined my wife on shore excursions to Naples, Palermo, Valetta, and Malaga. Very interesting, but I doubt that we'll go on another cruise.  We'll be doing our reading, writing, and meditating at home.

Why You Didn't Find October's HRFW

Normally, I publish a new issue of HRFW every month. October, though, was not a normal month. Far from it. As I just explained, my wife and I went away on a two-week vacation. Before and after that trip, I worked on a long article about toy workers for the American Educator, the magazine published by the American Federation of Teachers. Maddeningly, my two computers got sick. Despite some expensive efforts to save them, my desktop and laptop both died. To add to my frustrations, most of my email addresses got lost somewhere, and have yet to be found.

Now I have a brand new computer, a slim HP Notebook. It works okay, except that the programs on it, Windows, Word Perfect, and Netscape, have updates with "improvements" that I don't really need, but there they are. Mastering those changes takes time and patience, and I have a shortage of both. But I'm posting this issue, November's, if all goes well.


Human Rights for Workers: Bulletin No. VII-10, November 12, 2002

http://www.senser.com
Robert A. Senser, editor
Copyright 2002
robert@senser.com. (Send e-mail)

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