Press Release: Corruption and Greed: The Alianza Fashion Sweatshop in Guatemala

Institute for Global Labour and Human Rights |  By  | January, 23 2014 |  Share  | Source Article

January 23, 2014                                          

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Corruption and Greed

The Alianza Fashion Sweatshop in Guatemala

Today the Institute for Global Labour and Human Rights and our partner CEADEL (Center for Studies and Support for Local Development) in Guatemala are releasing a new report, “Corruption and Greed:  The Alianza Fashion Sweatshop in Guatemala” as part of a joint campaign to hold major U.S. and Canadian apparel companies accountable.

More than 60 U.S. labels and retailers, including powerhouses like J.C. Penney, Macy’s, Kohl’s and Wal-Mart made 52 million garments at Alianza in the last 12 years—but were incapable of protecting a single worker, as the Alianza workers were robbed of over $6 million in back wages, benefits and pension funds.

Between 1,050 and 1,500 workers, mostly indigenous Maya, toiled at the Alianza Fashion factory in Chimaltenango, Guatemala.

In the last 12 years, Alianza’s workers were robbed of over $6 million in back wages and benefits due them, including $1.44 million stolen from the workers when Alianza’s corrupt owner fled in March 2013 and over $4.7 million in payments management never made to the Guatemalan Social Security Institute, denying workers and their children health care and pensions.

  • In 2011 alone, Alianza workers sewed 4.2 million garments and over the course of 12 years some 52 million garments were exported to the U.S. and Canada.

  • The workers earned a base wage of just $1.05 an hour, which is the lowest wage in Guatemala and well below subsistence levels.

  • Meanwhile, the U.S. labels profited from huge mark-ups on garments produced at Alianza, for example:
    • A Wal-Mart women’s blazer produced at Alianza for just $4.25 retailed for $21.88—a markup of 415 percent!
    • A Calvin Klein boys’ suit with vest made for Burlington Coat Factory cost $9.23 to make, but retails for $59.99—a markup of 550 percent.

  • Lavish 100 percent tax breaks saved the Alianza Fashion factory and U.S. companies millions of dollars.

  • The Guatemalan Ministry of Labor is dysfunctional and has done nothing to enforce compliance with Guatemala’s labor laws and internationally recognized worker rights standards.

  • Every worker attempt to defend their basic rights and to organize at Alianza was crushed with firings and threats.

  • The good news is that PVH Corp, as a first effort, will donate $100,000 to the approximately 800 workers who were abandoned when the Alianza Fashion factory imploded under the weight of its own massive corruption in March 2013.
  • The 59 or so other labels and retailers, including J.C. Penney, Macy’s, Kohl’s, The Men’s Wearhouse, Wal-Mart and Nordstrom must step up to the plate to make these workers whole again.  The workers certainly did not cause the corruption and graft at the Alianza factory, while the labels should have been more vigilant all along.

  • The U.S. Government must respond with serious sanctions for the systematic and years-long violation of fundamental workers’ rights, at Alianza and many other Guatemalan garment factories, which represent a failure of the Guatemalan Government to uphold its commitments under the Central America Free Trade Agreement.

  • According to Gabriel Zelada, director of CEADEL, the Center for Studies and Support for Local Development in Chimaltenango, “From the very beginning at the Alianza Fashion factory, management’s policy was to plunder the workers in every way possible—robbing them of over $6 million in back wages and benefits over the years in collusion with corrupt officials of the Guatemalan Social Security Institute and Ministry of Labor, who totally failed to defend the rights of the workers.”

  • Guatemala has become the most dangerous country in the world to be a trade unionist.

  • The Institute for Global Labour and Human Rights in the U.S. and the Center for Studies and Support for Local Development (CEADEL) in Guatemala will bring a delegation of Alianza Fashion workers to New York City to sit down with the U.S. companies to describe how they were cheated over 12 years and to ask the U.S. companies to work together to make them whole again.


ABC News article, January 23, 2014, “Factory for Wal-Mart, JCPenney Goods Shortchanged Guatemalan Workers, Report Says”

[REPORT] Corruption and Greed: Alianza Fashion Sweatshop in Guatemala

Informe en Español / Report in Spanish