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September, 17 2010 |  Download PDF |  Share

Alianza Fashion: A Test Case for the Guatemalan Government & the Office of the United States Trade Representative

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Executive Summary
 

  • On July 30, 2010, the United States Trade Representative filed a case against Guatemala for the systematic violation of workers’ legal rights—the first such case brought under a U.S. free trade agreement.
     
  • Alianza Fashion in Guatemala, with 1,350 workers, sews garments for Briggs New York, Sag Harbor, Fashion Bug, Alfani and JM Collection.
     
  • Forced overtime, 10 2/3 to 12 1/5 hour shifts—7:30 a.m. to 6:10 or 7:40 p.m., six days a week are the norm.  Workers are at the factory up to 71 ½ hours a week.  Workers who can’t stay for overtime are told they “have the opportunity to resign immediately.”
     
  • Workers are allowed 20 minutes to sew each pair of pants.  Supervisors yell and curse at the women, “Hurry up, you shit!”
     
  • Workers are paid 95 cents an hour--$1.21 an hour counting bonuses—which does not come even close to meeting basic subsistence needs.
     
  • Workers exercising their legal right to organize are immediately fired and blacklisted.  The Guatemalan Government has done nothing to protect worker rights.
     
  • Leaders of the Center for Studies and Support for Local Development, CEADEL—a local human rights NGO—have received death threats for assisting Alianza workers.
     
  • Alianza Fashion management appears to be systematically robbing workers of their Social Security deductions, leaving them and their children without health care, or their pensions.
     
  • The Alianza workers must be made whole again and an independent investigation of the Social Security Institute must be undertaken.
     
  • The Alianza Fashion case provides one more example of the continued failure of corporate factory monitoring.
     
  • The U.S. labels should not cut and run from the Alianza factory.  That would only punish the workers further.  The U.S. companies should work with management to finally bring the Alianza factory into compliance with Guatemalan labor law and U.S. CAFTA labor provisions. 

 

 

 

PREFACE
What is at Stake?

By
Charles Kernaghan

It is almost impossible to overstate the potential impact that the United States Trade Representative's case against Guatemala-for the systematic violation of legal workers' rights standards-can have across Central America.

What we know is that from January 1, 2004 through July 2010, Guatemala exported $10.5 billion worth of garments to the U.S., which entered duty free.  If we take the general tariff on trousers, which is 28.2 percent, we can estimate that garment factories in Guatemala have been the beneficiaries of nearly $3 billion in tariff breaks.  What have the American people or the workers in Guatemala gained?  Absolutely nothing.  For the last six and a half years, despite billions in tariff breaks, there have been zero improvements in respect for fundamental worker rights.

We also know that "Sag Harbor Stretch Woman" pants with "The Slimming Solution" design made in Guatemala enter the U.S. with a landed Customs value of $10.54.  This $10.54 accounts for the total cost of production of the pants including fabric, thread, assembly and shipping costs.  Retailers sell the pants for $36.00, which represents a hefty mark-up of $25.46.  Surely there is enough money here to make at least modest improvements in respect for worker rights.  But nothing changes.

There are also other players involved.  Sag Harbor pants are sold at Kohl's, Sears, Meijers, even U.S. military exchanges.  One would think that such an impressive group could get it right and insist on worker rights improvements.  No such thing is happening.

We also know that Sag Harbor and Briggs New York have been monitoring the Alianza factory for years now.  In fact, at the end of August auditors from Briggs New York paid another visit to Alianza.  The monitors could speak with any worker they chose to.  But it's all a game and the workers know what they must do.  Management advises the workers:  "Remember, if things go well with the monitors we will have plenty of work until at least December."  Some supervisors are more direct, instructing the workers not to talk about what goes on in the factory... "You have to say everything is okay."  The same game is played over and over again, with no gain for the workers.

It is an open secret that corporate monitoring does not work.  Mr. John Ruggie, the special representative to the United Nations Secretary General for human rights and transnational corporations told Women's Wear Daily (June 4, 2009) that, "Just about everybody, at least off the record, will tell you that monitoring doesn't work and auditing of supplier factories doesn't work, because people cheat."

These are the reasons that the USTR's case against Guatemala could be a turning point, where we can finally call a spade a spade.  If Guatemalan factories continue violating fundamental workers rights standards, they may now have to pay a price.  The joy ride for these sweatshops is over.

 

Workers meeting at CEADEL

 

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