Made in China. The role of U.S. companies in denying human and worker rights

NLC, 25 May 2000

INTRODUCTION

For years, and now again with renewed vigor, U.S. companies have claimed that their mere presence in China would help open that society to American values. In effect, we are told that U.S. companies operating in China will also be on the front lines, acting as mini-universities of a sort, doing the heavy lifting in inculcating and spreading respect for human, womens and worker rights and democratic freedoms by their own example.

On one hand, there is no doubt that U.S. companies have a major presence in China. In 1997, of the $45.3 billion in direct foreign investments made in China, investment by U.S. companies was second only to that of Hong Kong. Of the total foreign investment, 62 percent went into funding 14,716 new manufacturing facilities. Today U.S. companies import a full 36 percent of Chinas total exports worldwide.

On the other hand, can we believe the U.S. corporations when they claim that they have improved human and worker rights conditions in China? Unfortunately, we cannot. Their record all too clearly demonstrates otherwise.

Recent in-depth investigations of 16 factories in China producing car stereos, bikes, shoes, sneakers, clothing, TVs, hats and bags for some of the largest U.S. companies clearly demonstrate that Wal-Mart, Nike, Huffy and others and their contractors in China continue to systematically violate the most fundamental human and worker rights, while paying below subsistence wages. The U.S. companies and their contractors operate with impunity in China, often in open collaboration with repressive and corrupt local government authorities.

Take Wal-Mart for example, the largest retailer in the world and the largest importer of goods into the United States. The best estimate is that Wal-Mart uses 1,000 contractors in China, with factories hidden across the country. (We can only estimate this, because Wal-Mart refuses to provide the American people with even a list of the factories the company uses in China to make the goods we purchase--though Wal-Mart does provide the same information to the government of China!)

Recently we discovered Kathie Lee handbags being made for Wal-Mart at the Qin Shi factory, where 1,000 workers were being held under conditions of indentured servitude, forced to work 12 to 14 hours a day, seven days a week, with only one day off a month, while earning an average wage of 3 cents an hour. However, even after months of work, 46 percent of the workers surveyed earned nothing at all--in fact they owed money to the company. The workers were allowed out of the factory for just an hour and a half a day. The workers were fed two dismal meals a day and housed 16 people to one small, crammed dorm room. Many of the workers did not even have enough money to pay for bus fare to leave the factory to look for other work. And when the workers protested being forced to work from 7:30 a.m. to 11:00 p.m., seven days a week, for literally pennies an hour, 800 workers were fired.

How is Wal-Marts behavior in China spreading respect for human rights?

Nike is another example, with approximately 50 contractors in China, employing more than 110,000 workers. One can see the swoosh and Just Do It slogan painted on the walls of Nikes contractors factory, Sewon, right behind the locked metal gate and the iron bars and grates covering the windows. People in the community told us that the young workers are paid 20 cents an hour and work 11 to 12-hour shifts. Also, they explained, they factory will not hire anyone over 25 years of age.

At the Hung Wah factory, young women work from 7:30 a.m. to 10:30 p.m., seven days a week, sewing Nike clothing for an average wage of 22 cents an hour.

At the Keng Tau Handbag company, young women work seven days a week during the busy season sewing Nike bags and backpacks from 8:00 a.m. to 10:00 p.m., receiving just one day off a month. Some workers earned as little as 8 cents an hour. To hide the amount of illegal overtime hours, factory managers told the workers not to punch their time cards for night or Sunday work.

How is Nikes actual behavior in China spreading respect for human rights?

A recruitment ad for the Lizhan factory where New Balance sneakers are made advertised for Females only, age 18-25. The base wage at the factory is 18 cents an hour, and the workers need permission to leave the factory grounds. Factory and dorms--where 20 women share one small dorm room, sleeping on triple-level bunk beds--are locked down at 9:00 p.m. every night. When workers in the polishing section could no longer stand the grueling overtime hours and low pay and went on strike, they were all fired. Factory management then lectured the remaining workers that they would not tolerate unions, strikes, bad behavior or the raising of grievances.

How is New Balances behavior helping to develop respect for human rights in China?

Does it get better with other U.S. companies?

Huffy bikes are made in China by workers forced to work from 7:00 a.m. to 11:00 p.m., 7 days a week, earning as little as 25 cents an hour. Failure to work overtime is punished with the loss of two-days wages. Twelve workers are housed in tiny, dark dorm rooms. Timberland shoes are made in China by 16 and 17-year-old girls forced to work 14 hours a day, seven days a week for 22 cents an hour, often in temperatures over 100 degrees Fahrenheit. The young women are threatened and coached to lie to any auditors visiting the factory. Alpine car stereos made by young women working 9 hours a day, 6 days a week, staring into microscopes as they solder the fine pieces of the stereo for 27 to 31 cents an hour. An electronic scoreboard traces their progress in meeting their daily production goal. Keds made in China by 16-year-old girls applying toxic glue with their bare hands, the only tool given them, a toothbrush. At the end of the day, they must line up and leave the factory single file. The factory is surrounded by a 15-foot wall topped with barbed wire. Spiegel clothing are made in China by women forced to work from 8:00 a.m. to 11:00 p.m., seven days a week. If they arrive a minute late, they are fined two hours wages. Fubu sneakers are made by young women locked in a walled compound with four guard towers at the corners, and paid 23 cents an hour to work 12 hours a day. Local security police keep an eye on the factory. RCA TVs are made by young women--some just 14 years old--working from 7:30 a.m. to 9:00 p.m. or even midnight, seven days a week, for a base wage of 25 cents an hour. Workers are fined 10 hours pay if they make a mistake on the production line.

There is no doubt that U.S. companies are in the front lines in China, importing for example 1.2 billion garments a year made in China, as well as shoes, sneakers, toys and sporting goods made in China that will retail in the U.S. for over $39 billion a year. But the fastest growing U.S. imports from China are computers and computer parts, which are increasing by 74 percent each year; phones and other telecommunications equipment which are up 72 percent annually, and electrical goods which are up by 127.6 percent.

But, far from defending human rights, the record shows that U.S. companies and their contractors in China are actively involved in the systematic denial of worker rights. U.S. companies are milking a system that does not allow for dissent and where anyone trying to form an independent union will be fired, arrested and imprisoned for 5 to 8 years without a trial. y Just ask Liu Dingkui about labor rights in China. He was arrested in January 1999 for organizing a demonstration of 500 steelworkers demanding back wages from the state-owned Peijiang Iron and Steel factory in Jiangyou City. He is now serving 1 years in a hard labor camp for re-education.

Or, ask Zhang Shanguang who was sentenced on December 27, 1998 to 10 years imprisonment for supplying intelligence to organizations outside China. He had filed stories with foreign radio stations describing widespread labor and peasant unrest in his home county of Shupu. The list goes on.

There are no workers rights in China, and U.S. companies are, unfortunately, a part of the problem.

How the Research Was Done

China is a hot topic these days, as it should be. China is currently the worlds seventh largest economy and may well be the worlds largest in the next 25 years. What happens in China will have a profound impact in shaping the global economy and determining whether or not fair trade will be linked to respect for human and worker rights and payment of living wages. Yet, despite the vast importance of Chinas position there is precious little known about the role of U.S. multinational corporations in China, and about conditions in their own and their contractors factories.

This research project was undertaken to help fill this enormous void. The research for Made in China began in March 1999, and will continue into the future. This is just the first of a series of planned reports documenting factory conditions and the struggle of workers in China to win their rights.

The National Labor Committee made two trips to China, in July 1999 and again in January 2000. But the vast majority of the research was done by very brave and dedicated human rights organizations in the region, along with courageous labor rights activists, some of whom are operating inside mainland China. For obvious security reasons, we will not identify the names of our colleagues or their organizations.

Hopefully, this report will provide more than just documentation on factory conditions. We hope that it will also help build an active international solidarity movement in the United States to support the workers struggle for human and worker rights in China.