Kimi/Honduras

Campaign for Labor Rights, 3 June 2000

[Honduras information provided by the U.S./Labor Education in the Americas Project: (773) 262-6502, <usleapja@mindspring.com>, <www.usleap.org>. All materials edited by Campaign for Labor Rights.]

Sign-on letter re Kimi/Honduras

The Honorable Hong Koo Lee
Embassy of the Republic of Korea
2450 Massachusetts Avenue NW
Washington, DC 20008

Dear Ambassador Lee:

Kimi Korea, a Korean businesses operating in the maquiladora (assembly for export) sector in Central America, has recently closed its unionized factory in Honduras and is moving its business to a non-union plant in Guatemala.

Workers at the Kimi factory in Honduras struggled against many obstacles for four years to organize a union and obtain a collective bargaining agreement. They finally won their contract in March 1999. Kimi subsequently moved its factory to a new location earlier this year; in that case, the company negotiated the terms of the movement with its workers. Then, in May of this year, Kimi abruptly closed its Honduran factory, claiming a lack of customers. However, Kimi has been shifting its production to the non-union Modas Cielo plant in Guatemala. This shift began last year - shortly after the contract was signed in Honduras.

Human rights advocates are deeply concerned about the situation at Kimi. The company's blatant attempt to deny Honduran workers their internationally recognized right to join a union could reflect poorly on other Korean investors in the region who are operating responsibly. I hope that the Korean government will discuss this matter with Kimi management and encourage the company to return to Honduras immediately and deal in good faith with the union. Thank you for your attention to this important matter.

Sincerely,

Background on Kimi

On May 5, citing "financial difficulties," the Kimi company announced that it would be terminating its clothing factory Honduras and, within the week, the factory closed its doors. In fact, the closure is a union-busting tactic. Since signing a collective bargaining agreement with the union, SITRAKIMIH, Kimi has been implementing a plan to shift its production to a non-union factory in Guatemala. The shift appears to have been planned since the signing of the SITRAKIMIH contract in March 1999, revealing that Kimi was never negotiating in good faith and never had any intention of maintaining a union factory.

Because SITRAKIMIH leaders have been coordinating with workers in other factories to develop a long-term plan to unionize the area, the loss of this union would indeed be a great setback. Despite a potentially long battle ahead, 160 of the 175 SITRAKIMIH members recently voted to fight Kimi's closing by demanding that the company:

1. Reopen the factory and rehire all workers, including those forced to resign;
2. Immediately pay the final week of wages, now legally overdue;
3. Pay 120% the severance legally owed the workers;
4. Commit to including SITRAKIMIH and its contract if Kimi reopens in the area;
5. Resolve all outstanding legal cases of previously fired workers.

Although the effort to persuade Phillips-Van Heusen to reopen its unionized factory in Guatemala (after it was closed in December 1998) ended in failure, we may have a better chance with Kimi because it is a much smaller and its U.S. customers are more susceptible to pressure.

Once Kimi has left Honduras, the Honduran Government will have little power over the company. The Korean Government, however, has leverage wherever Kimi produces. Korea has many investors in Honduras, especially in the maquila (assembly for export) sector. If the many other Korean investors in Honduras come to view Kimi as damaging their collective reputation, the Korean Embassy could be motivated to hold Kimi accountable.