How to Get Rich on 11 Cents an Hour

A Report for the National Labor Committee Education Fund in Support of Worker and Human Rights in Central America

coverphotoinfactory 

Garment production at Quality Garments, S.A., one of the many factories in Haiti producing goods for the U.S. market. In this factory, as in a majority of other maquiladora plants in Haiti, local labor laws are completely disregarded. The workers often work seven days a week on antiquated equipment, in hot, dusty, and dimly lit factories.

Since the publication of this report in January 1996, most of the Haitian factories doing production for Disney have raised worker wages to the legal minimum of 28 to 30 cents an hour, or slightly above--still far below the minimum necessary to cover a family's most fundimental needs.

Read an update report, "An Appeal to the Walt Disney Company" (May 1996)

 

Acknowledgements

Research for this report was sponsored by the National Labor Committee and conducted principally by Eric Verhoogen, a labor researcher who travelled to Haiti in August, 1995. The NLC wishes to thank Eric as well as the following people:

Gesner Jean-Philippe, Denise Confident of Libè¨te, Max Blanchet of the Bay Area Haitian-American Council, Michelle Karshan, Foreign Press Liaison for President Aristide, the dedicated activists at Antenn Ouvriye and Haiti Info, Laurie Richardson of the Mouvman Peyizan Papay Education and Development Fund (MPP-EDF), Ellen Braune of New Channels Communications, Catherine Maternowska of the Lambi Fund and, above all, the brave workers who spoke to us in Port-au-Prince who must, because of the potential for repression that is still present in Haiti, remain anonymous. Their strength and courage leads the way for all of us.

The NLC also wishes to thank the Union of Needletrades, Industrial and Textile Employees (UNITE) for assistance in the publication of the report, and Keir Jorgensen of UNITE's research department for his help in collecting data included in the report.

In addition to labor union support, the NLC received grants from the Unitarian Universalist Veatch Program and ARCA Foundations to carry out the research, writing, and publication of this report.

Photographs ©dominique esser.

January, 1996


The U.S. in Haiti
Table of Contents

Executive Summary

THE U.S. IN HAITI: How to Get Rich on 11¢ an Hour
by Eric Verhoogen

"What You do Is What You Get"
A Pattern of Abuses
The Cover-Up
Products Proudly Marked "Made in the U.S.A."
U.S. Tax Dollars at Work
The Truth Behind Pocahontas
The Daily Struggle to Survive
Rhetoric vs. Reality

Behind Closed Doors
by Charles Kernaghan

Kellwood Company's Vision of Helping the Indians
Andrew Postal of Judy Bond on "What Haiti's People Deserve"
OPIC and Worker Rights
Protecting Corporate Images and "Voluntary" Codes of Conduct
How Harwood Companies Selects Its Offshore Plant Locations
The Need for Independent Monitoring

A Call To Action/We Have More Power Than We Realize
by Charles Kernaghan

What Concerned Citizens Can Do
The GAP / NLC Agreement on Independent Monitoring
Model Letters to Walt Disney and J.C. Penney
Corporate Pledges to Abide By Haitian Labor Laws

Company Information
CEO names, addresses, phone numbers, etc.

Appendices:

Presidential Decree Raising Minimum Wage
Excerpts from Haitian Labor Code

Notes

NLC Information and Other Resources

 

 

femaleemployee

Executive Summary


qualitygarments    


  

THE U.S. IN HAITI
How to Get Rich on 11 Cents an Hour
By Eric Verhoogen


 

I. "What You Do Is What You Get"

Quality Garments S.A., a clothing contractor in the SONAPI Industrial Park, is typical of assembly plants in Port-au-Prince. The factory is hot, dimly-lit, crowded. The air is heavy with dust and lint. There is no ventilation to speak of. Piles of material--scraps of pajamas, dresses, skirt hems--clutter every aisle and every corner. The workers have sad, tired faces. They hunch over antiquated sewing machines, some more than 20 years old, sewing "Kelly Reed" dresses to be sold in Kmart and Mickey Mouse pajamas for the Walt Disney Company.

The workers at Quality Garments work 8 to 10 hours per day, Monday through Saturday. When the company has orders to fill, they are required to work Sundays as well. In conversations with the National Labor Committee during the second week of August, several workers told us that they had worked seven Sundays in a row--in other words, more than 50 days straight without a day off, up to 70 hours per week--during the hottest season of the year. We asked the manager of the plant, Mr. Raymond DuPoux, if this schedule was creating a problem for the employees or the factory as a whole. "The problem is mine," he told us, "because I can't go to the beach. So I have problems with my wife."

For their labor, the workers are in many cases paid as little as 15 gourdes per day, or 12 cents per hour. This is well below the legal minimum wage of 30 cents per hour based on the daily rate of 36 gourdes (US $2.40).1  The workers are paid on a piece-rate system, and production quotas are raised to the point where the majority of workers have no hope of meeting them.2 One experienced worker we spoke to, for instance, is supposed to sew seams on 204 pairs of Mickey Mouse pajamas in a day, for which she would be paid 40 gourdes (US $2.67); in 8 hours, however, she is only able to complete 144 pairs, for which she is paid 28 gourdes (US $1.87). In Creole, this system is referred to as "sa ou fè, se li ou we," or, roughly translated, "what you do is what you get."

The average worker at Quality Garments earns about 25 gourdes (US $1.67) per day, 73 cents less per day than the minimum wage. The company pays straight time on the weekends, not time-and-a-half as Haitian law requires.3  Transportation for most workers costs between 6 and 8 gourdes per day, and lunch--a small plate of rice and beans and a glass of juice--costs 7 gourdes. This means that the average worker takes home between 10 and 15 gourdes (67 cents - US $1) per day, or between 8 cents and 13 cents for every hour of work. This comes to less than US $6 for a standard work-week, which provides less than 25% of the minimum needs of a family of five.4

It was precisely to eliminate such abuses that President Aristide raised the minimum wage from 15 gourdes (US $1) per day to 36 gourdes (US $2.40) per day on May 4, 1995. In his decree, President Aristide specifically banned the sort of piece-rate abuses that are common at Quality Garments and factories like it. Articles 1 and 2 of the decree read as follows:

"Beginning June 1, 1995, the minimum wage paid in industrial, commercial and agricultural businesses is fixed at 36 gourdes per 8-hour day...

"Where the employee works per piece or per task, the price paid for a unit of production (per piece, per dozen, per gross, per meter, etc.) must allow the employee who works 8 hours to earn at least the minimum salary." [emphasis added]5

In other words, if a worker earns, say, 20 gourdes in a day under the piece-rate system, the company is required by law to pay the worker another 16 gourdes, to bring her total for the day to 36 gourdes. (In the apparel business in Haiti, the 16 gourdes are termed "make-up.") At Quality Garments, however, it seems that the rule of law is taken lightly. There is a large sign on the wall next to the time clock as you walk into the plant. It reads:

"A partir du Vendredi 17 Mars 1995 il n'y aura plus de 'make-up' à  cette usine. Nous ne voulions ici que les ouvriers qui veulent travailler pour gagner l'argent."

In English, this translates as: "Effective Friday, March 17, 1995, there will be no more `make-up' at this factory. Here we only want workers who are willing to work for their money."

seamfastmanufacturinglabels

II. A Pattern of Abuses

Quality Garments is not unique. Such wanton disregard for the law is common among factory owners in Haiti. After an extensive August 1995 investigation, the National Labor Committee calculates that more than half of the approximately 50 assembly plants producing in Haiti for the U.S. market are paying less than the legal minimum wage. Of the 15 plants that we investigated, the following 10 were found to be violating the minimum wage law (all were paying according to the illegal "sa ou fè, se li ou we" piece-rate system):

 

disneygarmentlabels

of work--12¢ per hour. The owner of the plant, Charles Chevalier Jr., is openly nostalgic for the days of the Duvalier dictatorship, when workers who attempted to organize were routinely murdered by state-sponsored deathsquads. "Jean-Claude [Baby Doc] Duvalier was a great man compared to these..." he said recently in an interview with labor researcher Marcelo Hoffman. "I mean, his administration was good compared to what's happening now." Like most factory owners that pay less than the minimum wage, Mr. Chevalier insists that he abides by the labor code; "Haitians do not work for less than the minimum wage," he said "even if they tell you so, they're lying."

chancerelles labels 

 

III. The Cover-Up

It is common knowledge in the industrial parks of Port-au-Prince that companies are simply ignoring the minimum wage law, but this fact is strangely absent from the public statements of the factory-owners.

 

Wal-Mart Stores Inc.
Excerpts from its "Standards of Vendor Partners"

All Vendor Partners shall comply with the legal requirements and standards of their industry under the national laws of the countries in which the Vendor Partners are doing business. Should the legal requirements and standards of the industry conflict, Vendor Partners must, at a minimum, be in compliance with the legal requirements of the country in which the products are manufactured...

All merchandise shall be accurately marked or labeled with its country of origin in compliance with the laws of the United States and those of the country of manufacture...

Vendor Partners shall fairly compensate their employees by providing wages and benefits which are in compliance with the national laws of the countries in which the Vendor Partners are doing business...

We favor Vendor Partners who utilize less than sixty-hour work weeks, and we will not use suppliers who, on a regularly scheduled basis, require employees to work in excess of a sixty- hour week...

Factories working on Wal-Mart merchandise shall provide adequate medical facilities, fire exits and safety equipment, well-lit work stations, clean restrooms, and adequate living quarters where necessary...

Wal-Mart has a strong commitment to buy as much merchandise made in the United States as feasible...

To further assure proper implementation of and compliance with the standards set forth in this Memorandum of Understanding, Wal-Mart or a third party designated by Wal-Mart will undertake affirmative measures, such as on-site inspection of production facilities, to implement and monitor said standards...

For instance, Jean-Edouard Baker, the head of the Haitian Association of Industrialists (ADIH), who is alleged to have made a fortune helping supply Haitian blood plasma and cadavers to the U.S. market,9 was asked if companies in Haiti are paying the minimum wage. "I'm paying it, yes," he answered. When asked again, he said, "They are paying. There's no question in my mind. Most people in Port-au-Prince are paying it." Mr. Baker is also chairman of the Haitian Presidential Commission on Economic Growth and Modernization, which a USAID status report describes as "leading the analytical process to improve the business and investment climate."10

The cover-up is not limited to Haitian industrialists, however. The U.S. retailers who benefit from the illegal practices publish corporate "codes of conduct" about their "socially responsible" contracting policies. Wal-Mart's "Standards for Vendor Partners," for instance, declares righteously that:

"Vendor Partners shall fairly compensate their employees by providing wages and benefits which are in compliance with the national laws of the countries in which the Vendor Partners are doing business...Factories working on Wal-Mart merchandise shall provide adequate medical facilities, fire exits and safety equipment, well-lit work stations, clean restrooms, and adequate living quarters where necessary."

Wal-Mart claims that it promises to investigate its contractors and to cancel its contract with any factory found in violation of these policies.11 However, at plants like Quality Garments and Excel Apparel--plants that are hot, poorly lit, crowded and cluttered, and that pay less than the minimum wage--the abuses and illegal practices are blatant; it would

league leader classic apparel labels

be impossible for a representative of Wal-Mart not to notice them. Yet the factories continue to produce garments for Wal-Mart. It seems that the Wal-Mart's "Standards"--like similar "codes" of Sears, J.C. Penney and other large retailers--are little more than an exercise in public relations.

IV. Products Proudly Marked "Made in the USA"

Workers at Classic Apparel, which produces sports team merchandise for H.H. Cutler of Grand Rapids, Michigan, told us that they have been attaching labels marked "Made in USA" to clothes made in the factory in Port- au-Prince. The label is printed with the brand name "League Leader." The workers also showed us a nearly identical label attached to a $16.83 Wal-Mart price tag. Wal-Mart's statement of buying policies boasts that "Wal-Mart has a strong commitment to buy as much merchandise made in the United States as feasible,"12 but these labels cast doubt on Wal-Mart's claims. This practice was previously revealed in a 1992 Dateline NBC exposé that found that garments sewn by 12-year-olds in Bangladesh for Wal-Mart were being touted as "Made in USA."13 Garments under the "League Leader" brand name are also sold at regional discounters like Caldor, Hills and Meijer.

Workers at Classic Apparel say that they been attaching labels marked "Made in USA" on their "League Leader" products. A copy of one of those labels is on the facing page. The same workers then showed us a nearly identical label attached to a $16.83 Wal-Mart price tag.

H.H. Cutler sports apparel is also sold under the "America's Sports Team" label at Wal-Mart, the "On Contact" label at Target, the "USA Line-Up" label at Kmart, and the "Cutler Sports Apparel" label at J.C. Penney and Foot Locker. H.H. Cutler is owned by VF Corp., producer of "Wrangler" and "Lee" jeans, one of the three largest apparel firms in the U.S.14 The workers attaching the "Made in USA" labels in Port-au-Prince earn between 30 cents and 33 cents per hour. In 1994, Lawrence Pugh, the Chairman and CEO of VF Corp., earned a salary of US $1,888,000--the equivalent of US $907.69 per hour, roughly 3,025 times the salary of the workers in Haiti.

additional labels from classic apparel
more classic apparel labels  
  
V. U.S. Tax Dollars at Work

The United States has allocated more than $596 million in taxpayer dollars in Haiti since September 1994.15 The United States Agency for International Development (USAID), the main U.S. agency in Haiti dealing with economic issues, is expected to spend $215 million this year specifically on aid and economic development to Haiti. Of this, $8 million is committed to the Program for the Recovery of the Economy in Transition (PRET), which provides direct assistance to U.S. and Haitian businesses--sponsoring conferences, guiding tours of U.S. businesspeople, and establishing a network of business contacts. U.S. taxpayers have to this point funded five lavish business delegations: the Presidential Business Development Mission to Haiti, led by Deputy Secretary of State Strobe Talbott (March 7-8), as well as delegations in agribusiness (July 24-26), handicrafts (Aug. 8-10), minority business (Aug. 22-24) and light manufacturing (Oct. 29-31).

The U.S. Government has shown an aggressive commitment to court U.S. businesses to invest in Haiti, but it has shown no commitment to the workers who produce for those U.S. companies. According to a USAID Status Report, the first of PRET's three main objectives is to "promot[e] a sound legal and regulatory environment for private enterprise to recover and prosper."16 But Lawrence Crandall, head of the USAID mission in Haiti, said recently in an interview that violations of the minimum wage law were not the responsibility of the agency and that USAID "has no position" on the wage issue. It is clear that, as far as USAID is concerned, a "sound legal and regulatory environment" does not include enforcement of Haitian workers' basic legal rights.

In fact, Mr. Crandall was soft-pedaling USAID's strategy; for several years USAID has actively and consistently opposed any increase in the minimum wage.17 In June, 1991, when President Aristide was proposing raising the minimum wage from 15 gourdes to 25 gourdes per day, (which at the 1991 exchange rate of 8.5 gourdes to the dollar represented an increase from US $1.76 to US $2.94 per day, or from 22 cents to 37 cents per hour), the agency wrote in a project paper that "wage systems should not be the forum for welfare and social programs," and that Haiti should not jeopardize its main "comparative advantage," which the report termed "its highly productive, low-cost labor force."18

Even after the military coup of September 30, 1991 ended President Aristide's attempts to implement his proposals, USAID maintained its opposition to raising the minimum wage. On October 15, 1994, the day President Aristide returned to Haiti, Brian Atwood, the Administrator of USAID, was asked in a press conference whether or not USAID favored a wage increase. Atwood replied, "I don't think that the economy is ready...for such measures."19 Atwood did not mention the fact that Article 137 of the Haitian Labor Code requires the minimum wage to be raised every time inflation totals more than 10% for the year, as it has for the past six consecutive years.20

It seems that USAID's pressure has paid off. As late as April 30, 1995, the day before he was scheduled to announce a new minimum wage, President Aristide argued in a speech to peasant leaders at the National Palace that taking inflation into account the minimum wage would have to be raised to at least 45 gourdes simply to bring it to 1991 levels. Given the fast rising cost of living, he added, even 75 gourdes was not enough for a family to live on.21 But after several days of behind-the-scenes lobbying--in which the role of USAID and the U.S. Embassy is unclear--President Aristide was pressured into accepting a compromise minimum wage of 36 gourdes.

Because of rising consumer prices, the new wage of 36 gourdes (US $2.40) per day (30 cents per hour) is worth less in real terms than the old minimum wage of 15 gourdes was worth in 1990. In other words, even after the recent increase, minimum wage workers in Haiti have less buying power now than they did in 1990, before President Aristide's election.22 And since Oct. 1, 1980, when dictator Jean-Claude ("Baby Doc") Duvalier first set the minimum wage at 13.20 gourdes,23 the real value of the minimum wage has declined by almost 50%.24

Just another example of our U.S. tax dollars at work.

inflation erodes real wages in haiti graph

 

VI. The Truth Behind Pocahontas

Who benefits from this system?

Consider one example: At a subsidiary of the L.V. Myles Corp. in the SONAPI Industrial Park, workers produce shirts and nightwear, including Disney pajamas decorated with scenes from the movie "Pocahontas." The production manager of the plant told us that a line of 20 workers can produce 1,000 pairs of purple Pocahontas pajamas in one 8-hour shift. The pajamas sell for US $11.97 at Wal-Mart. So for L.V. Myles and Disney, one day's production is worth $11,970 ($11.97 x 1,000). The workers at this plant are paid an average of 50 gourdes (US $3.33) or less per day. All the workers on one line together earn $66.60 per day (20 x $3.33). In other words, the workers are paid just .56% ((66.60/11,970)x100), or roughly one half of one percent of the eventual purchase price of the pajamas. That is the equivalent of 7 cents for every $11.97 shirt. What happens to the other $11.90?

It is important to note here also that the L.V. Myles plant is one of the relative few in Haiti that are actually paying the minimum wage. At Quality Garments and National Sewing Contractors, both of which sub-contract from L.V. Myles, for instance, workers are producing the same clothes--the same Disney pajamas--and are earning even less money.

The CEO of the Walt Disney Company, Michael Eisner, earned $203 million from salary and stock options in 1993.25 That amounts to roughly $780,800 per day, or $97,600 per hour--approximately 325,000 times the salary of the workers in Haiti who are producing pajamas for his company. If a Haitian minimum wage worker worked full-time, six days a week, sewing clothes for Disney, it would take her approximately 1,040 years to earn what Michael Eisner earned in one day in 1993.

Factory-owners in Haiti often claim that they cannot afford to pay more than they are paying, and complain that higher wages will make them lose business to firms in other countries in the Caribbean. Several industrialists we spoke to, however, felt that this wasn't true. For instance, Jeff Blatt, an American joint-partner in the L.V. Myles plant (described above), compared labor costs in Haiti to those in the Dominican Republic, where he also manages a factory: "Costs are absolutely more competitive here," he said. Murray Reed, the owner of Ohmicron Electronics, an assembly plant in the Shodecosa Industrial Park in Port-au-Prince, was asked if the minimum wage was a reason that some companies were reluctant to do business in Haiti. His response was blunter: "The minimum wage is not in and of itself an important factor, because of the favorable exchange rate...People who say the wage is keeping them out are full of B.S."

disney garments produced in haiti labels

The Walt Disney Company

Excerpt from its 1993 Annual Report

...Today, children around the world go to bed holding Mickey Mouse dolls, and Mickey's likeness appears on clothing, books and products of every description in lands around the globe... As Mickey has grown in popularity and worldwide presence, so has the company which created him... Sales of Mickey-licensed merchandise set an all-time record in 1993... Mickey, like the rest of the classic Disney characters, does not live in the temporary world of mortals. Instead, he and his Disney counterparts live in the hearts, memories, and minds of people everywhere...

 

Excerpts from the Disney Publication Sharing the Magic

I [Michael Eisner, CEO of Disney] believe Walt Disney, better than anyone else, understood the value of contributing to the community...While others gave with financial resources alone, Walt dedicated the time to develop dreams for a brighter future...And being the genius that he was, he knew there was a responsibility to share his company's creativity and storytelling abilities to make the community environment better for everyone...

For me personally, the challenge of keeping the same high standards for the company as a solid community citizen has been especially rewarding...

Our company's mission statement for community service is quite simple: We look for opportunities to initiate, develop, administer and implement diverse programs for the benefit of the community which also perpetuate the traditions and ideals of The Walt Disney Company...Our Disney Team constantly reviews issues in the community to look for ways in which we can lend a helping hand. We are a partner, a neighbor, and contributor and a leader. We are building upon the legacy left to us by Walt Disney to create a better tomorrow...

Volunteerism [through Disney's VoluntEAR programs] is one of the most vital and rewarding components of the Disney work experience. We are extremely pleased that our employees are active members of their community, finding tremendous satisfaction in working together as a team to lift the spirits of those in need...

The Walt Disney Company supports many programs and maintains an active involvement in areas relating to equal employment opportunity. Various internships, work experience programs, and participation in job fairs and community outreach and leadership efforts are important contributions the company makes annually.

...Our company is an active purchaser of local products and construction services, as well as an important contributor to local taxes and payrolls. And we make a conscientious effort to be a valuable contributor to many important community projects, offering our talents and resources in many ways.

It has been our priority to be responsible and caring, like a good neighbor should be.

 

pocahontas shirt produced for walt disney

sears merchandise 

 plant workers standing up or squatting to eat

Mr. Reed is absolutely correct: wages in Haiti are lower than in the Dominican Republic, Jamaica, Honduras, El Salvador, Guatemala and Nicaragua. In other words, Haiti defines the wage floor for the entire Western Hemisphere.26

VI. The Daily Struggle to Survive

As Haitian factory-owners and American corporations are profiting from the low wages, Haitian workers are struggling every day just to feed themselves and their families. A wage-earner in Haiti typically supports more than five people, and the minimum wage simply does not cover the basic expenses of such a family. The typical diet for minimum wage workers consists largely of rice and cornmeal and beans; vegetables are rare, and meat is an unheard-of luxury.

Workers we spoke to in Port-au-Prince estimated that in order to satisfy the most basic nutritional needs of their family, they would need to spend 25 gourdes (US $1.67) per day. In addition, workers pay 6-10 gourdes (40 cents-67 cents) per day for transportation, depending on how far away they live from their workplace, and 7 gourdes (47 cents) at lunchtime for a small plate of rice and beans and a glass of juice. To rent a small one- or two-room shack in a slum in Port-au-Prince costs between 1,500 gourdes (US $100) and 2,000 gourdes (US $133) for a six-month period. To send a child to the cheapest schools costs between 900 gourdes (US $60) and 2000 gourdes (US $133) per year, depending on the school and the age of the child. Thus, in order to satisfy just their minimum needs for food, shelter, and education, a family in Port-au-Prince must spend--at the very least--363 gourdes, or US $24.20 per week.27

However, a minimum-wage worker working 8 hours per day, 6 days a week in Haiti earns a grand total of 216 gourdes, or US $14.40 per week. In other words, a full-time minimum-wage salary provides less than 60% of a family's basic needs. A salary of 15 gourdes (US $1) per day, common in apparel plants producing for U.S. companies, provides only 90 gourdes, or US $6 per week, less than 25% of a family's basic needs.

Many workers we spoke with--most of whom were not so lucky as to be making the minimum wage--explained that they were not able to make ends meet and were falling deeper and deeper into debt, which compounded their problems. Food vendors on the street outside many factories will sell on credit, but at a premium of 20-25%. A 5-lb. sack of rice, for example, sells for 22 gourdes (US $1.47) cash, and 28 gourdes (US $1.87) on
credit. Money-lenders in poor neighborhoods--Haitian workers do not have access to banks --generally charge a rate of 25%-50% interest per two-week period.

The economic situation is becoming increasingly desperate for workers in Haiti. Many face a real risk of starvation if they lose their jobs, and are therefore compelled to do whatever their boss asks of them, which for many women involves sexual favors. A Columbia University anthropologist has conducted extensive interviews with women workers in Cité Soleil, an enormous slum (pop. 300,000) in Port-au-Prince. She found that roughly 17% of the female factory workers she spoke to had been forced to have sex with their bosses, on penalty of termination if they refused.28

Many families in Cité Soleil have taken to selling the last of their worldly belongings --chairs, cooking utensils, plates and bowls, beds, and children's shoes--simply in order to survive.

VII. Rhetoric vs. Reality

The official images of U.S. intervention in Haiti have been unambiguously cheerful: brave American G.I.'s bringing peace and democracy and respect for human rights to a thankful populace. For workers in the assembly plants of Port-au-Prince, however, the reality is somewhat bleaker. Their living standards have been steadily declining and their most basic legal rights are trampled daily. The U.S. government agency charged with supporting economic development in Haiti--USAID--has an official policy to do nothing about such violations. And the rosy rhetoric of U.S. intervention obscures a darker, more pernicious fact about the U.S. presence in Haiti: that many of the companies profiting from the abuse and exploitation of Haitian workers are among the largest and most successful U.S. corporations: Disney, Wal-Mart, Kmart, J.C. Penney, Sears, Hanes/Sara Lee and Kellwood, to name a few.

In 1994, Wal-Mart made a profit of $2,681,000,000;29 Disney made $1,110,400,000.30 The workers who sew the clothes for these companies are in many cases making less than $312 a year, working full-time. Basic respect for the law is not too much to ask.

We should ask ourselves: Is it fair that workers in Haiti are paid 7 cents for every $12 garment they produce? Is it fair that the CEO of the Walt Disney Company is paid 325,000 times as much as the workers who make the Pocahontas pajamas for his company? Is it fair that the U.S. has spent millions to support business interests in Haiti and "has no position" on the abuse of workers' rights?

Paying 11 cents an hour to sew clothing for U.S. companies is not development. It is crime.

Workers we spoke with told us that two of their highest priorities are to strengthen the Haitian labor code and to improve enforcement of existing laws. During the three years of the coup d'état, unions and labor rights groups were decimated. Today, workers in Haiti are once again trying to organize to defend their rights, but they need our support.

Haiti does need economic development, and Haitian workers do need jobs, but not at the price of violating workers' fundamental rights.

disney garment labels produced in haiti

Kmart Corporation

Excerpts from its 1993 Annual Report

...Giving back to the communities Kmart serves has long been the tradition of Kmart Corporation. Every Kmart store has associates who are members of Good News Committees to improve the quality of life in their home towns.

Kmart Corporation contributed more than $21 million in merchandise and cash to nonprofit organizations in 1993... In addition to cash donations to The American Red Cross and Salvation Army, bottled water and other suppliers were donated to Kmart's customer base by teh truck loads in disaster areas... The Kmart Fund for Communities is designed to support the nonprofit organizations in Kmart store communities nationwide with preferenc given to organizations that involve Kmart associate volunteer activities... The Kmart Fund for Kids supports Kmart's interest in children. It contributes to nonprofit organizations which provide primarily education programs for children--our leaders of tomorrow. ...Kmart is also proud of its strong annual support of United Way.

[Kmart] Associates increased their hunger relief efforst in 1993. Each store donated 20 food baskets to local needy families for Thanksgiving, and associates held a national canned food drive to benefit their local communities... Kmart also teamed with the American Express Charge Against Hunger program to raise money for hunger relief in the United States. As a result, Kmart presented a check in the amount of $250,000 to Share Our Strenth, one of the nation's largest nonprofit hunger-relief organizations...

 

Sara Lee Corporation

Excerpts from its 1990 Annual Report

...At Sara Lee Corporation, being a leader also means leading the way to a better quality of life for our employees and the communities we serve. It is a growing responsibility, global in scale, as we expand into new markets and introduce ourselves both to new employees and to new customers. One of our most important goals is to provide the highest quality of life in our industry. We do that by allowing employees to develop their full potential through employee training and mentor programs. We also conduct extensive training in safe work habits, greatly reducing on-the-job injuries. And, as more women enter the workforce, especially those with children, we are creating new day care assistance and flexible work hour programs to respond to the growing challenges faced by working parents...

Challenges facing our communties are also the focus of our corporate contributors. Sara Lee Corporation contributes at least 2% of our domestic pre-tax profits in cash contributions to innovative, non-profit organizations. Programs receiving support include those effectively working to end child and spousal abuse, drug abuse and illiteracy, as well as efforts to shelter and feed the homeless.

...But numbers alone cannot begin to reflect the full dimension of Sara Lee Corporation's involvement in the community. Especially important are the personal contributions of our employees. Encouraged to get involved with non-profit organizations, our employees are active volunteers in the community, providing leadership for non-profit organizations and adding that personal touch.

 

 


 

Behind Closed Doors
U.S. Businesses Eye Haiti
by Charles Kernaghan


Did you ever wonder what business people talk about behind closed doors?

It cost over $600 just to register, but last year I was able to get a taste of what goes on when I showed up at the annual Miami Conference on the Caribbean and Latin America, attended by nearly 2,000 U.S. and Latin American business and political leaders.

Scheduled early in the week-long conference, a "Manufacturers' Luncheon" was held in one of the gaudy ballrooms of the Hotel Inter-Continental. We were seated at round tables. All of a sudden, in turn, everyone at my table started introducing themselves--they were from Kellwood, RSK Industries, Burlington Industries, the U.S. State Department, and so on. Determining that it would be even more awkward to get up and run, I introduced myself as a human rights worker. This set a lot of eyebrows fluttering and serious lowered glances shooting back and forth across the table. I had to get used to this. At times, one of the conference organizers, Bennett Marsh, director of trade policy for the business lobby Caribbean/Latin American Action, actually followed me around whispering to anyone who sat next to me to watch what they said in my presence, lest I overhear something I should not.


 

Helping the Indians:

Seated next to me at the luncheon was Mr. James Jacobson, executive vice president of the Kellwood Company. Mr. Jacobson turned to me and said he had a story he wanted me to hear; he wanted to know what a human rights worker thought of this.

Mr. Jacobson explained that his family had long supported Indian causes. He lived in Saint Louis, where Kellwood's headquarters are located. One Sunday there was a meeting in a local Catholic Church, they were going to show a video and discuss the problems facing Indian reservations. Even though he and his wife were Protestants, they decided to go. The video showed the reservations mired in drugs, alcoholism, unemployment, welfare.

On the drive back to their home, Mr. Jacobson said he started to think and got excited. He wanted to help. He would give the Indians the same things he was giving his employees in Sri Lanka, where Kellwood has an apparel assembly plant. In Sri Lanka, Kellwood subsidizes two-and-a-half meals a day for its workers: breakfast, lunch, and cookies and milk in the afternoon.

He thought about his plan all day Sunday, and first thing Monday morning when he got to work he called his staff together. He laid out the problem. They could help. Kellwood should build a factory on an Indian reservation here in the U.S. Everyone was on board, the excitement grew.

But before they could even get off the ground, they discovered that Kellwood would have to pay the legal federal minimum wage of $4.25 an hour--even on a reservation! They were shocked and disappointed, and their plan to build a factory disappeared into thin air.

For special emphasis, Mr. Jacobson turned even further toward me and asked, can you believe it that government regulations apply to Indian reservations? Here's an incident of government regulations hurting workers and hurting human rights. How could Kellwood pay the minimum wage and afford to provide cookies and milk as well?

"What do you think about that as a human rights worker," he asked me.

To put this into perspective, Kellwood is no Mom and Pop shop. In fact, Kellwood is the fifth largest apparel company in the U.S. with yearly sales of over $1.4 billion.

A little later on at a manufacturers' workshop, Mr. Jacobson explained that Kellwood seeks out favorable business climates around the world from which to source production. Kellwood manufactures or contracts work to 30 countries including China, Saipan, Honduras, the Dominican Republic and Haiti, where Kellwood set up an operation in 1984 under the Duvalier dictatorship. The New York Times reported on June 17, 1984 that in its search for "pools of inexpensive labor," Kellwood "found Haiti an ideal hunting ground," where "the prevailing Haitian wage is only $2.65 a day, which is about as low a pay anywhere in the world..." Kellwood was one of the U.S. maquila companies which continued to produce in Haiti after the coup despite the Organization of American States (OAS) economic embargo.

Things are going well for Kellwood. In the quarter ending October 31, 1995, Kellwood's profits were up 26 percent, reaching $14 million.

Some of this profit is coming out of Haiti, where Kellwood is back in business paying its Haitian workers $.17 an hour---which is only a little more than half of the country's legal minimum wage--to make underwear for Hanes which is sold at Wal-Mart and other retailers. Seventeen cents an hour is one-twenty-fifth of what Kellwood would have to pay on an Indian reservation in the U.S.

Kellwood's leadership in the apparel industry was recognized at the Miami Conference when Mr. Jacobson was honored by being appointed to the Board of Directors of the Caribbean/Latin American Action (C/LAA)--a major business lobby shaping U.S. policy in Haiti and the rest of Latin America.


 

Ten Cents-an-Hour under Prison Conditions / Haitian People Deserve Maquilas:

Another prominent player at the Miami Conference--at least he appeared to speak an inordinate amount--was Andrew Postal, president of Judy Bond, a family-owned business that manufactures and wholesales women's blouses. In 1993, Judy Bond had $39.9 million in sales.

At a workshop focusing on "Creating and Maintaining a Favorable Business Environment for Global Industries," Andrew Postal shared his underlying corporate ethics with the assembled manufacturers. Mr. Postal told us that everyday he explains to his buyers that Judy Bond's customers do not care if their clothing is made with 10 cent-an-hour wages or made under prison-like conditions in China. All Judy Bond customers care about, said Mr. Postal, is money: they want the best quality at the lowest dollar.

When it comes to customers, Andrew Postal does not know what he is talking about. 78 percent of them recently said in a survey that they would avoid retailers who were known to be dealing in sweatshop goods (a fascinating consumer survey conducted by Marymount University in Arlington, Virginia, released November 7, 1995). On the other hand, when it comes to sweatshops, 10 cent wages and prison-like conditions, Andrew Postal may very well know what he is talking about, for Judy Bond sources production in China, Macau, Thailand, the Philippines and Mexico. Back in 1984, under the Duvalier dictatorship, Andrew Postal set up two plants in Haiti under the name of Brewton Fashions International. Mr. Postal thought Haiti was fine until the Haitian people overwhelmingly elected President Aristide. Days after the coup, he told the Journal of Commerce, "I'd be very surprised if there was anyone new considering going in during the Aristide tenure. It was not a business-friendly government." (October 2, 1991) With President Aristide out of the way, and while the Haitian military was murdering 3,000 to 5,000 people, Andrew Postal went right on producing in Haiti and exporting to the U.S., despite the OAS embargo. It was not until June 1994, when U.S. maquila operations in Haiti were forced--with help from the National Labor Committee--to shut down in compliance with the UN/OAS sanctions, that Andrew Postal left Haiti.

Now, Mr. Postal wants to return to Haiti to start up his maquila plants, but he is first demanding a little help from the U.S. government, a handout, or as he puts it, "a financial incentive." According to Mr. Postal, his company was hurt by the embargo, so the U.S. government owes him.


"Haiti's Only Resource: Its Inexpensive Labor Force":

Andrew Postal runs a family business, but he also sees himself as a bit of a statesman-historian. He has a whole theory on what is good for Haiti and where Haiti fits into the international economy. He elaborated this theory not only at the Miami conference, but shortly afterwards as well, at U.S. Senate hearings.

haiti defines wage floor for western hemisphere graph 

First, Mr. Postal established his credentials as a leader and spokesman for Caribbean/ Latin American Action. He informed the Senate Committee on Foreign Relations (March 9, 1995) that, "...in my C/LAA role I am able to speak for a large majority of those American companies that have made major commitments in the Haitian manufacturing, agricultural, (and other) sectors over many years..."

Haiti's role: unfortunately, "....unlike other countries blessed with a variety of natural resources or strategic location features, all Haiti really has to work with is its human capital."

At the Miami Conference, Mr. Postal hammered away at this theme: Haiti has nothing, but U.S. companies do "believe in Haitian workers as capital." The Haitian worker is "as competitive and productive as anyone." In fact, it has always been like this--it is history. Accordingly, Mr. Postal explained, "Haiti's advantage in attracting industry in the past was the size and quality of its labor force, the relatively inexpensive price of its labor and the outstanding work ethic."

Now, democracy may have come to Haiti, but according to Mr. Postal, in and of itself, democracy does not create jobs, only the private sector does that. The private sector is willing to jump-start Haiti's economy through the assembly--or maquiladora--sector producing for export to the United States. "Haiti's people deserve maquilas," Mr. Postal says, and we should "give the Haitian people the opportunity they deserve." Maquilas hold great hope for the Haitian people, and so on.

According to the Haitian-American Chamber of Commerce and Industry, Haiti is fulfilling its role: "The minimum wage has been fixed at 36 gourdes [$2.40 a day, or 30 cents an hour] which is far below the level of the other Caribbean countries."


 

The Need for Financial Incentives

According to Mr. Postal, there are some U.S. companies that want to help Haiti; they "want to come back, but their decision will depend on the kind of help that is available for them. Many are taking a wait-and-see approach"...waiting for U.S. government "financial incentives."

There's a glitch. U.S. banks will not put up the money--working capital loans--to finance U.S. maquiladoras in Haiti. They believe it is too risky. At the same time, local Haitian interest rates are too high and therefore out of the question. C/LAA became involved in this issue "big time," shopping around for which U.S. government agency would provide the financing for the maquila operations in Haiti. C/LAA came up with the U.S. government's Overseas Private Investment Corporation (OPIC).

Mr. Postal explained that every serious person should "ask what can be done to induce as many experienced companies as possible" to set up maquilas in Haiti. There is more at stake than the average person may realize. Mr. Postal told us that the GATT (General Agreement On Tariffs and Trade) agreement--which eliminates quotas by 2004--"will unleash the Pacific Rim" and force us to "face the tide of Asian competition." Haiti, with its 30 cent-an-hour wages (even this legal minimum often ignored), may be "our" only way to successfully compete with Asia. Haiti has found its role in the world market, as a beachhead to compete with Asian wages and working conditions.

Liking what they heard, the corporations making up the C/LAA lobby appointed Postal to chair their Haiti Task Force.

The U.S. Commerce Department must have also liked what it was hearing from C/LAA, since it chose C/LAA staffer Sally Yearwood, who worked with Mr. Postal, to head its U.S. Commercial Office in Haiti. Sally Yearwood's job at C/LAA was to maintain the loophole in the OAS embargo, which allowed U.S. maquilas to continue operating in Haiti and exporting to the U.S., despite the military repression, the thousands murdered and the 14 cent-an-hour wages many of the maquilas were paying.

In her new Commerce Department role, Sally Yearwood is now in charge of assessing Haiti's business climate and of facilitating U.S.-Haitian business contacts.


"I'm from a Right to Work State--You Mean I Have to Have a Union in Haiti?"

Mr. Richard Morningstar, Vice President of OPIC, arrived at the Miami Conference to explain to the U.S. businesses what role OPIC could play in Haiti. I do not believe he was aware of what he was about to face.

Mr. Morningstar got down to business right away. OPIC wanted to help; OPIC similarly felt that the assembly or maquila sector was key to restarting Haiti's economic recovery and eventual development. Over the next four years, OPIC will provide Haiti "$100 million in financing and political risk insurance." These funds would highlight infrastructure developments. More immediately, "OPIC will establish a loan facility of at least $5-to-$8 million...to channel short-term working capital"...to the maquila sector. OPIC would do this by providing loan guarantees to two private U.S. banks operating in Haiti, a practice called "on lending." This would act to hold interest rates well below what is available locally in Haiti.

Then Mr. Morningstar explained OPIC's rules. He was very clear and direct: No OPIC loan can result in the loss of U.S. jobs, and every OPIC loan is conditioned on respect for internationally recognized worker rights. If a company wants an OPIC loan it will have to guarantee worker rights compliance. If maquila companies do not allow collective bargaining agreements and honor those contracts, OPIC cannot support them. That is the law. Those are OPIC's statutes.

The business people could not quite grasp what they were hearing. There was a wave of agitation. Andrew Postal jumped to his feet. He asked Mr. Morningstar if these worker
rights conditions also applied to on-lending from private banks which received OPIC loan guarantees, but were not direct OPIC loans. Yes, Mr. Morningstar explained, everything involving OPIC must meet these worker rights standards.

Another businessman stood up. "I'm from a right to work state, and you mean I have to accept a union in Haiti?" Again, Mr. Morningstar explained, yes, you must respect worker rights.

Andrew Postal kept at Mr. Morningstar, demanding that he explain exactly what he meant by worker rights and concretely what it meant to implement these conditions.

Taken aback by all the questions and the air of disturbance, Mr. Morningstar tried to start over again. OPIC wants to help. OPIC does not want to be so overbearing as to shut companies down. Rather, we want to work together. We ask you to come into compliance with these statutes.


Indonesia: The Special Case

Mr. Morningstar then gave the example of Indonesia, "where there are significant worker rights issues." OPIC provides financing in Indonesia. We ask the companies to come into compliance.

I was sitting not too far away from Andrew Postal, who at that point leaned over toward two of his business associates--accountants I believe--and said to them, "That's the question--what goes on in Indonesia. That is how we will move in Haiti."

Notoriously anti-union, Andrew Postal and Judy Bond would do everything possible to undermine the letter and spirit of U.S. government worker and human rights protections.

Mr. Postal may have hit on an angle here, in that OPIC has provided $10 million in loan guarantees in Indonesia for on-lending through Citibank. OPIC guarantees provide another $50 million for on-lending in Thailand and Bangladesh. Who is keeping track of these loans and whether or not worker rights provisions are being adhered to?

Indonesia is a corrupt and vicious dictatorship. The legal minimum wage was recently raised from 19 cents to 25 cents an hour, though even this is often ignored (as in Haiti). Burmese refugees in Indonesia are working for 90 cents a day--11 cents an hour. Ninety-hour work weeks are not uncommon. Union organizers are blacklisted, beaten, even killed.

One can get a little flavor of Indonesian working conditions through a recent (August 1995) agreement between the Indonesian Employers Association and the International Labor Organization (ILO) to jointly train Korean managers in Indonesia not to beat their workers. The Indonesian Employers Association actually had to go on record and state that it "does not sympathize with employers who use any 'torture' or other such punishment of employees."

In Haiti, according to the Haitian American Chamber of Commerce and Industry, "OPIC is offering up to USD$64 million for financing working capital and investments for this [maquila assembly] industry." As of October, 1995, 27 companies had sought OPIC funding.


 

We Must Protect Our Image:

There was a lot of discussion of human rights issues at the Miami Conference. The business people appeared rather sensitive, as if they thought hidden cameras were filming what they said. [The NLC/60 Minutes USAID story left a big impact on these people. They are still talking about it.]

It was Mr. Martin Bunting, a Canadian businessman, who was the most direct and candid about his concern for human rights. Mr. Bunting is the executive vice president of Sportchek/FCL, Canada's largest sportswear retailer with $350 million in annual sales. Sportchek was running focus groups to keep track of customer attitudes. Their surveys found that "quality of life" concerns ranked right up there with value-price and having the garment available when the shoppers wanted it. The Canadian consumer was interested in social content issues: how and where the product was made and under what conditions. Was the process environmentally sound? Did it lead to sustainable development? Was it ethically produced?

So widespread and growing are these consumer attitudes, Mr. Bunting explained, that "cause marketing" has become a real buzzword. Far from being abstract, Sportchek found its "green line" of shorts made in Ecuador--"in partnership with the Ecuadorean people"--becoming the company's number one best seller. They could barely keep up with customer demand.

Mr. Bunting seemed rather comfortable in telling the assembled businessmen that personally, he "hates unions, hates even the word unionism." But still, he said, "we have to force our offshore contractors to focus more on sustainable development." We must leave something behind where we produce. Companies must be involved. To protect its labels, to protect its image, Sportchek was cutting back from its sourcing in China. It was not worth the risk.

Our corporate image is everything, Mr. Bunting explained.


 

We Will Write the Rules and Police Ourselves:

Everyone was in agreement. A company's labels, a company's image, a company's name had to be defended at all costs. Mr. Jacobson from Kellwood agreed that human rights were a fundamental concern to his corporation.

In fact, it was at a workshop led by Mr. Jacobson--"Creating and Maintaining a Favorable Business Environment for Global Industries"--that Kellwood, Levi Strauss, Burlington Industries, Judy Bond and other companies entered a full scale discussion of the issue.

Consensus was quickly reached that companies should be encouraged to adopt corporate codes of conduct. This should be completely voluntary. The companies should write their own codes or rules. Their codes would inform the offshore contractors of the U.S. manufacturers' or retailers' concerns over protecting the human rights of anyone anywhere in the world producing goods for their companies. The companies said that they looked upon contractors as their partners, and that they would only choose partners who shared their fundamental commitment to human rights. Further, all the companies agreed that you cannot get a good product out of a sweatshop.

The companies would consider human rights issues, but only within the following parameters:

1.) Corporate codes of conduct were to be strictly voluntary--nothing was to be legally binding.

2.) Corporate codes of conduct were a private sector solution to human rights concerns--there was to be no government involvement, standard setting, monitoring, or enforcement; and,

3.) Human rights issues must never become a condition for future trade agreements, nor in any way condition a corporation's access to tariff or other trade benefit programs.

Now that the corporations had their human rights concerns down on paper--in their corporate codes of conduct or sourcing guidelines--how would they go about implementing these principles? What would be the nuts-and-bolts of implementation, monitoring and enforcement? This was a tough question which the companies grappled with.

Before long there was agreement: The companies themselves would do the monitoring; they would police themselves. After all, as they put it, we are the ones in the industry, we are the ones closest to the action. Who knows the offshore system better than we do? Nor is it possible to hide what is going on from each other. So there will be checks and balances.

So the companies would voluntarily write the rules (their corporate codes of conduct) and then voluntarily police themselves, all done without independent monitoring. This brought to a close their discussion of human rights.

At this point in time, almost all manufacturers and retailers have adopted some sort of corporate code of conduct. How has their system been working? There is still one major glitch.


"Our Code is the Screw-Driver and the Sun"

Over the years, the National Labor Committee has interviewed hundreds of maquila workers across the region. When you ask the young women (who make up the vast majority of maquila workers) about these corporate codes of conduct, they do not have the slightest idea of what you are talking about. When we explained the concept, we have had women respond, "Our code is the screw-driver and the sun. To punish us they hit us on the head with the butt of a screw driver or put us out into the blazing sun for the day, or even every day for a week."

When you tell the young women workers that the companies will police themselves, they just laugh. It happens every time. One can safely presume that no maquiladora worker assembling goods for these U.S. and Canadian corporations--not one, and there are 500,000 maquila workers across Central America and the Caribbean--has ever heard of, let alone seen, these corporate codes of conduct.

Corporate codes of conduct have not been translated, distributed or posted in the maquila plants. Independent monitoring of their contractors by human rights organizations is flat-out rejected by the companies--as if they have something to hide. There is one exception to the rule. Alone among all the retailers and manufacturers, the GAP recently signed a breakthrough agreement with the National Labor Committee to do just that--to open its plants to independent monitoring. (More on that later.)

The other companies have lots of lame excuses such as: We do not own the maquila facility. We are only one of several contractors. We cannot go in there and just impose our standards on everyone. The multi-billion dollar U.S. manufacturers and retailers also tell us they have very little control over their small offshore contractors.

Either corporate codes of conduct are just public relations gimmicks or they are not. Either corporate codes of conduct are designed solely to create the image that something is being done in order to address the human rights concerns of U.S. consumers, the media, the U.S. Congress--or they are meant to be real.


 

Setting Up a Plant Offshore: Low Wages and No Culture

How do companies choose where to set up their next factory?

It is not a pretty process, and it is one that companies certainly do not want to air or discuss in public. Sometimes, however, the facts slip out, as they did when Mr. Michael Rothbaum, a leader of the U.S. apparel industry, appeared before the United States International Trade Commission (ITC) and found himself forced to walk the commissioners step by step through the process a company undertakes in deciding where to locate a new plant. Mr. Rothbaum's testimony before the ITC in March 1992 provides a rare and fascinating glimpse of what goes on behind closed corporate doors.

Mr. Rothbaum was testifying as Chairman of the Board of the American Apparel Manufacturers Association (AAMA)--which, as he put it, "is the major trade association representing the apparel industry in the United States." Mr. Rothbaum is also President and Chief Executive Officer of Harwood Companies, a manufacturer of men's and children's clothing.

For Mr. Rothbaum, setting up a new apparel plant in the U.S. is out of the question. He explained to the ITC commissioners, that "using U.S. wage rates" he could not "expect to make a profit at the same time." Any new factories must be built offshore, which is exactly what Harwood was doing. At the time of the hearings, Harwood--which already had plants in Costa Rica and Honduras--was attempting to build a second factory in Honduras, using a special low-interest loan subsidized with U.S. tax dollars.

In deciding where to locate, companies like Harwood undertake a "competitive analysis," a "very in-depth study of all the countries that we would have considered." How a country scores on this test dictates where the plant will be built.

According to the corporate analysis, the single most important factor in deciding where to locate a plant is low wages. "Wage rates would be at the top," Mr. Rothbaum instructed the commissioners. And, of course, it follows that "you will find your lowest wage rates naturally where the greatest pool of available labor is." In other words, you look for third world countries where high unemployment, poverty, malnutrition, misery and desperate need "naturally" generate low wages. A good example of such favorable conditions would be Haiti, where the legal minimum wage is 30 cents an hour, or Honduras where the wage is 37 cents an hour.

Beyond wages, "Certainly, governmental attitudes toward businesses" are a key corporate concern, Mr. Rothbaum continued. "The attitudes of the people within the hierarchies of government" are closely studied. Good attitudes translate into financial incentives provided by third world governments to corporations who consider setting up plants in their country. For example, Haiti, the poorest country in the Western Hemisphere, with a per capita income of $240 a year and over $820 million in debt, is forced to exempt all maquila export factories from paying any taxes. This is not enough for the companies, which are not shy about demanding a better deal. So the Haitian government has announced it will soon offer to subsidize 50 percent of all telephone, electrical and port charges for the new maquila plants. Haiti will be subsidizing J.C. Penney, Walt Disney Corporation, Wal-Mart, Sears, and others.

The corporations' "competitive analysis" becomes even more subtle when it studies the attitudes and performance of the Ministry of Labor in target countries. Mr. Rothbaum explains, "...the Ministry of Labor plays an important part in terms of the labor code that exists within the country..." Of course, the Ministry of Labor is charged with overseeing--and implementing--a country's labor laws. Will minimum wage and overtime rates be enforced? Will forced overtime be prohibited? Will social security medical insurance and other benefits be mandatory? Will the use of child labor be strictly proscribed? Will workers have the right to organize and bargain collectively? To a company, "...all these become factors of cost," Mr. Rothbaum stated. So it is fundamental to differentiate laws on paper from actual reality. The "attitudes" of Ministry of Labor officials can very much impact on a corporation's bottom line.

It is no secret that U.S. maquila companies favor weak labor ministries. Take Honduras, where Mr. Rothbaum and Harwood are very knowledgeable and pleased with the government's attitudes toward business.

A 1993 internal investigation performed for the U.S. Agency for International Development (USAID), found that: "In Honduras, where the maquila plants work in industrial park settings, guards in the private sector parks routinely prohibit entry to union organizers and even to labor inspectors." That is, armed private security guards routinely prohibit Labor Ministry officials from even entering the free trade zones. On one hand, on paper, the USAID study notes that "labor inspectors are supposed to protect workers' rights by periodic inspections of work sites and citations (or, in some cases immediate imposition of fines) for violations of the labor code by employers." However, back in real life, the USAID study found that "In Honduras there are 99 labor inspectors for the entire country." Also, "labor inspectors are poorly paid and seldom have money for traveling to programmed inspection sites." (And when they do, "they are most often banned [quite illegally] from entering the industrial parks in which the maquila industries operate.")

Just as the Ministry of Labor and the system of labor inspectors is not functioning, neither are the Honduran labor courts. The USAID study notes: "Complaints about the slowness, inefficiency, bias...and, not infrequently corruption of the labor courts were ubiquitous in Honduras."

Honduras is passing the corporations' "competitive analysis" with flying colors. "In any event," the USAID investigation of Honduras concludes, "with high rates of unemployment, labor inspection all but absent and without unions to protest in-plant infractions, other workers' rights dealing with maximum hours, health and safety and women--and child--labor, etc.--have little or no chance of effective enforcement, and, the team was repeatedly told, are in fact being widely violated" (emphasis added). Harwood did its homework well in choosing Honduras for the site of its newest offshore plant.

Haiti has to play this game as well, if it is to pass its corporate "competitive analysis." In Haiti, over half the maquila assembly plants producing goods for the U.S. market are openly violating the country's legal minimum wage.

Other key factors analyzed by the corporations include transportation costs (round trip container freight charges) and how much a host third world government is willing to spend to meet the infrastructure needs of the maquila companies (such as highways to move your goods to port).

Once the "competitive analysis" is completed and the target country chosen for the new plant, then it is just a matter of scientific management kicking in. Companies have a "scientific method," Mr. Rothbaum explained to the ITC commissioners. In the United States, apparel companies employ a piece rate, or quota system, in which wages are tied to the completion of so many units of work per hour. The Harwood Companies determines the production quota. When a company relocates offshore, it simply takes this piece rate system with it.

Mr. Rothbaum told this to the commissioners: "Generally, when we go into a situation like that, we take our U.S. standard wage rates, which as you know in apparel we use piece rates. We merely take those time values and equate them to whatever local currency we're paying in..."

It is a matter of applying simple mathematics. For example, in the U.S., a company may determine that a woman (80 percent of apparel workers are women) must attach 1000 cuffs to 500 pairs of shirt sleeves in eight hours. That is her production quota. In one hour she must sew 125 cuffs, or one cuff every 48 seconds. The average hourly pay for apparel workers in the U.S. is $7.31. As we have said, to earn that $7.31, the woman must sew 125 cuffs per hour, which means she gets paid a little less than 6 cents ($.05848) for each cuff she attaches. That is the piece rate.

When going offshore, as Mr. Rothbaum pointed out, "We merely take those time values and equate them to whatever local currency we're paying in..." Concretely, if we apply this to Haiti, it looks like this:

The daily and hourly production quota remains unchanged. That is, a Haitian apparel worker will also be forced to attach 1000 cuffs per day, or 125 per hour. The only thing that changes is the piece rate. Rather than a $7.31 an hour wage in the U.S., the piece rate is now tied to the 30 cent-an-hour minimum wage in Haiti. A Haitian sewer must attach the same 125 cuffs per hour, but she will be paid 30 cents for that hour. So, rather than earning 6 cents per cuff, she will earn two-tenths of a penny ($.0024) for each cuff she attaches.

Now, Mr. Rothbaum, Harwood, and the other offshore companies are not totally heartless. There are special circumstances under which they will lower the quota they demand and raise the piece rate they pay offshore. For example, if the offshore plant is hot and poorly ventilated, they will take this into account in setting the pace of work. They may also consider whether or not their employees are forced to work overtime--like in the Quality Garment factory in Haiti where employees have been forced to work 10 hour days 50 days straight--or if their workers are paid so little that they and their families are malnourished and tired. As Mr. Rothbaum puts it, "These people, generally, their diet is not up to the standards of a U.S. diet." So, "...we may add a factor of 5 to 10 percent if the plant is a non-air conditioned facility. If the work day is more than eight hours, we try to build in factors for a loss of productivity due to those factors."

This means that the Haitian sewer in a maquila producing for the U.S. gets lucky. She will not, after all, have to sew 125 cuffs for 30 cents an hour. Companies like Harwood will cut 10 percent from their production quota. Ten percent of 125 is 12.5. Subtract 12.5 from 125 and you get 112.5 cuffs, which now becomes the quota demanded per hour. Instead of getting paid $.002400 per cuff, the Haitian sewer will earn $.002666 for the same cuff.

That is it. That is the process and science of a corporation's setting up a plant offshore. There are no other values to consider. There are no human dimensions. Take the issue of culture. Corporations may contribute to the Metropolitan Opera, but companies really do not believe in culture.

Mr. Rothbaum, speaking for the U.S. apparel industry, is very eloquent on this point: "I mean, as far as we're concerned, there are no such things as ethnic factors. There are no such things as cultural factors."

In the corporate New World Order, we the people are all the same. When the companies apply their scientific methods of management to us, they will get the same production out of us no matter where we are on earth. Again, Mr. Rothbaum says it best: "That the incentives that we create, if those [cultural, ethnic, human] factors exist, we should be creative enough to overcome them and get the same productivity out of our people no matter where they are" [emphasis added].

In other words, by being "creative enough" with our wages (with "the incentives" totally controlling our living conditions and whether or not our families have access to food, health care, schooling)--especially in an uncertain global economy--the companies can set the same production standards anywhere in the world.

Back at the Miami Conference on the Caribbean and Latin America, all the business people agreed. Mr. Sergio Cruz, a vice president of the international corporate consulting firm, Kurt Salmon Associates, said, "it is all in the management. You can get the same production levels out of people anywhere. It all depends on how well you manage them."

Finally, Mr. Rothbaum told the International Trade Commission that it was a "remarkably successful" and "so necessary and noble an effort" on the part of the U.S. apparel companies that relocated to Central America and the Caribbean. "By encouraging apparel companies to invest in the CBI countries...the last two administrations [Presidents Reagan and Bush] have accomplished what they set out to do in the Caribbean." One could ask the Haitian maquiladora workers how this "so necessary and noble an effort" is helping them. On the other hand, Mr. Rothbaum assures the U.S. people that we also gain when U.S. corporations set up plants offshore. A case in point: the new 600-employee assembly plant in Honduras that Harwood wanted to build, "would mean no diminution in [Harwood's] domestic work force, in fact, it probably would add several jobs to our domestic work force." This is very reassuring.

"Several" is defined by the American Heritage dictionary as "being a number more than two or three, but not many."


The Race to the Bottom:

Once all human differences and considerations have been wiped out and we are all integrated into the global economy--where we are expected under management's "scientific methods" to produce the same the world over--then the corporate agenda literally tilts the entire playing field of production and trade to the lowest point in terms of wages, benefits and conditions. For the corporations, the lowest point becomes the common denominator. For us, the people, we can then compete in a race to the bottom, competing over who will accept the lowest wages, the smallest benefits, and the least regulations placed over corporate prerogatives. Apparel and other assembly workers in the U.S. will be pitted against 12-to-15 year-old children in Honduras forced to work for 37 cents an hour, or young teenage women in El Salvador being paid 56 cents an hour, or the desperately poor in Haiti who must accept 30 cent-an-hour wages, or less.

The consequences of tilting the playing field are obvious. Suppose you employ 400 apparel workers in the U.S., who earn $7.31 an hour, $58.48 for an eight-hour day. Your daily payroll would be $23,392. If you relocated your plant to Haiti, for the same production level you could pay your 400 workers 30 cents an hour, or $2.40 per day. Here your total daily payroll load would be $960. On wages alone--leaving out health benefits, workers' compensation, taxes, etc., in just one day you would save $22,432. Wages in Haiti are only four percent of U.S. wages.

The maquiladora companies and their multinational retail partners will also want the third world countries to subsidize their operations. It is not a pretty process, which is why the corporations hope to gloss it over with the public relations veneer of corporate codes of conduct. Then they say they will police themselves for compliance with their own voluntary human rights guidelines, which is just another attempt to keep out any independent observers.

As icing on the cake, the companies would like us to think imports are the problem, and to see the Haitian or other third world worker as our enemies driving this system and taking our jobs. This suits the companies just fine, since it keeps us from focusing on the real question, which is the corporate agenda for the new world order.

In the end though, certain striking facts overcome corporate PR. We lost 89,000 apparel jobs in the U.S. last year alone. That is a real hemorrhaging of jobs. People are demanding answers.

Conditions in the maquiladora factories in Haiti are not isolated, are not the exception to the rule, rather they reflect a common denominator which is more or less standard in the maquila sector across all of Central America and the Caribbean, and beyond.


The Need for Independent Monitoring:

At the Miami Conference, Mr. Jacobson of Kellwood made a big deal out of their codes of conduct. He said, "Look at Wal-Mart, look at Sears; suppliers have to sign a contract with them on standards or else there is no business." J.C. Penney went even further, he said, "They come down and actually look at each plant before they'll do business."

When you read Eric Verhoogen's powerful report on Haiti, you can be the judge of just how well the corporations are doing with their codes of conduct, human rights protections and sourcing guidelines. You can judge whether the corporate agenda for the new world order is in the interests of the Haitian and the U.S. people.

It would be very interesting to ask J.C. Penney, Sears, Wal-Mart, Walt Disney Corporation, Dayton Hudson, KMart, Kellwood, Bradlees, V.F. Corporation, Hanes and others how it is that:

* Their employees are being cheated on the already pathetically low legal minimum wage of 30 cents an hour--some workers being paid as little as 11 cents an hour;

* Their employees are forced to work overtime--at one plant for 50 days straight--and then are short-changed of their legal overtime premium as well;

* Their employees are illegally not being paid the mandatory seventh day wage (if you work six days, you must be paid for the seventh day--it is considered a standard part of your wage);

* Their employees are illegally being denied health care and pension benefits and sick days;

* Sexual abuse of employees is not uncommon;

* There is no protective gear for those employees handling dangerous chemicals;

* Their plants are often hot, dirty, dimly lit and poorly ventilated;

* Their employees are prohibited from speaking to each other during working hours?

What has become of their corporate codes of conduct and their system of policing themselves?

In Haiti, there are those among the tiny economic elite who will capitalize on the corporate agenda to turn Haiti into a low wage sweatshop producing for the U.S. market. For example, Mr. Gilbert Bigio, who acquired a fortune under the corrupt Duvalier regime and then supported the military coup to overthrow President Aristide, is now entering the free trade zone business. His business conglomerate, known as the GB Group, is planning to construct two new industrial parks or free trade zones, which will double Haiti's maquiladora capacity. According to a spokeswoman for the GB Group, they are keenly "aware of the possibilities available to Haiti for deeper integration into the world trade system." The Bigio family just wants to help be "instrumental in recapturing Haiti's reputation as one of the best sites for processing, assembly and manufacturing."

If you think that the Haitian and U.S. people deserve more, then you can help. A "Call to Action" follows.

In many ways we are far more powerful than we realize. The companies cannot go anywhere without us. They are totally dependent on the U.S. and Canadian consumers. In the U.S. alone, we spent $184 billion on apparel last year. That is a lot of money. If we don't buy, the companies die. If we start asking questions, the companies have to answer. If we demand real human rights protections and fair living wages they will have to listen.

One thing is clear. We are in this struggle together--the U.S. and Haitian workers, and maquiladora workers across the Caribbean, Central America and Mexico.

 

Dayton Hudson Corporation

Excerpts from its "Standards of Vendor Engagement"

Dayton Hudson Corporation has a tradition of conducting its business in an ethical manner that reflects our respect for the public franchise under which we operate. As such we are concerned with the worldwide state of being of human rights and environmental degradation. We expect that the vendors with whom we source our products to share these same ethical concerns as well.

Dayton Hudson will seek vendors who provide their employees with a safe and healthy workplace in compliance with local laws... Dayton Hudson will not knowingly work with vendors that use forced or other compulsory labor in the manufacture of products intended for our stores. This includes labor that is required as a means of political coercion or as punishment for holding or peacefully expressing political views... Dayton Hudson will not knowingly use vendors who use corporal punishment or other forms of mental or physical coercion... Dayton Hudson recognizes and respects the cultural differences found in the world-wide marketplace. However, we believe that workers should be employed on the basis of their ability to carry ou the duties of a particular job, rather than on the basis of personal characteristics of beliefs. We will seek vendors who share this belief.

Dayton Hudson will seek vendors who do not require more than 60 hour work weeks on a regularly scheduled basis, except for appropriately compensated overtime in compliance with local labor laws... Dayton Hudson will seek vendors who share our commitment to the betterment of workers and benefit levels that address the basic needs of workers and their families so far as is possible in the light of national practices and conditions... Dayton Hudson will seek vendors who do not use child labor... Dayton Hudson will suppor the development of legitimate workplace apprenticeship programs for the educational benefit of younger people as long as the child is not being exploited or given jobs that are dangerous to the child's health or safety.

 

"Dayton Hudson's Position on Vendor Employment Practices"

...It is our practice to do business with vendors whose workers are present by their own choice and have agreed to their compensation, who are not exploited or asked to risk bodily harm.

...Dayton Hudson Corporation is a strong proponent of the rights of children. Our practice does not define "child labor" more strictly than the laws of the country of origin, because we recognize we would thereby restrict the very people we were trying to help escape from hunger and poverty.

 

A Question for Walt Disney


Why pay workers 7 cents for each pair of $11.97 Walt Disney pajamas they make? Why not pay them 14 cents, or 21 cents or 28 cents? Could the U.S. companies afford it?

Many things in life are puzzling, so you turn to experts for help. Now Mr. Michael Eisner, CEO of Walt Disney Company, knows a lot about money. In 1993, he paid himself $97,600 an hour. He must be a very smart man.

We should seek Mr. Eisner's help to explain something to us. Disney pajamas are being produced by at least four contractors in Haiti under the "Disney," "Mickey Unlimited" and "Mickey's Stuff for Kids" labels. At L.V. Myles maquila plant in the Sonapi Industrial Park, Haitian women sew Disney "Pocahontas" pajamas, which are exported to the U.S. and sold at Wal-Mart for $11.97 each. These women are paid only 7 cents for each pair of pajamas they sew. This means that the 7 cents the women earn is equal to only one-half of one percent of the sales price of the pajamas in the U.S!

Something is odd here. The Haitian workers who made the pajamas get 7 cents while Walt Disney, Wal-Mart and L.V. Myles walk off with $11.90--or, over 99.4 percent of the sales price.

The question: Suppose Walt Disney Company called Wal-Mart and L.V. Myles together and said: "Look fellows, let's double, triple, or even quadruple the wages of these Haitian women." Would Walt Disney et al suffer? It would look like this: If the wages were doubled, the worker would earn 14 cents and Walt Disney and the other companies would get $11.83. If the wages were tripled, the workers would receive 21 cents while Walt Disney et al would keep $11.76. If we took this all the way to quadrupling the wages, the women would keep 28 cents while the companies would get $11.69.

Now, if the companies kept $11.69 out of the sales price of $11.97, they would end up with 98 percent (97.66%) of the total, which isn't a bad chunk. If the Haitian women got paid 28 cents, that would mean they were keeping 2 percent (.023%) of the total price of each pair of pajamas. That would seem at least a little fairer, since, after all, they did make the pajamas.

The $97,600 question for Mr. Eisner would be: How is is possible that Walt Disney and the other companies involved cannot make a very adequate profit by keeping $11.69, or 98 percent, of the price of a garment that they then sell for $11.97? Why exactly is it that the companies need to keep $11.90--as they do now--leaving the women who sew the pajamas a miserable 7 cents?

Couldn't Walt Disney and friends afford to pay these workers 28 cents? Please!

P.S. We read in the Financial Times that Walt Disney Company profits hit a record $496 million for the first quarter, and that you, Michael Eisner, were "gratified by the record results." Congratulations!--But, how about that 28 cents?

 

A Call to Action:

We Have More Power Than We Realize

We have come a long way.

It was only in 1983 that the New York Times (10/13/83) reported: "Retailers and manufacturers say they have no knowledge of conditions in the garment factories to which they contract work, nor any responsibility to inspect conditions." The system was out of control. Nor did the U.S. companies have anything to fear. They said themselves that "There is no enforcement at all" of labor statutes--not on the federal, state or local level, and certainly not internationally. Manufacturers and retailers were not embarrassed by the fact that they had no idea how their contractors operated. In their mind, sweatshops were simply not their responsibility. That was 1983.

Then there was the GAP agreement. In December 1995, the GAP (GAP, GAP Kids, Banana Republic, Old Navy) signed an unprecedented agreement with the National Labor Committee (NLC) granting access to independent human rights observers to monitor conditions in their contractors plants. See GAP agreement.

The GAP would also translate its corporate code of conduct (human rights guarantees) into the native languages of its workers, post it in every factory making GAP clothing and distribute it to the workers. For the first time, a company's corporate code of conduct passed from public relations to reality. In effect, the GAP said--and they are alone in this--that they accept responsibility for how and under what conditions GAP's products are made around the world.

new york times article - a sweatshop victory dec 22 1995

Independent third party monitoring opens the maquiladora system to the light of day. The closed system of corporate self-monitoring is out. If other retailers and manufacturers have nothing to fear, they will follow the GAP's lead.

But this is exactly what the U.S. retailers and manufacturers were afraid of. They urged the GAP not to take this step, not to sign an independent monitoring agreement with the NLC. At stake was the old boys' corporate network which, up to this point, had been able to keep their offshore sourcing operations hidden behind closed doors, and away from scrutiny.

It was a coalition of labor, religious, grassroots, women's, consumer, children's and student groups--university, high school, even grammar schools--stretching across the U.S. and Canada which achieved this breakthrough agreement with the GAP. The GAP campaign proved that the North American people were not interested in buying products made by children or by teenaged girls forced to work 17 hour shifts under slave-like conditions for 56 cents an hour. The GAP campaign touched a powerful nerve--people were not only moved and angered when they learned of conditions in the maquilas, but thousands wanted to do something to help, to act. There is a decency in the North American people that the companies are leery of. This decency could lead to questions the companies would rather avoid.

In the face of the GAP campaign, the National Retail Federation sprung into action to attempt to diffuse all the attention--especially by the media--directed at conditions in the offshore maquilas producing for export to the U.S. In August 1995, the National Retail Federation--the largest retailers federation in the U.S.--called an emergency meeting in Washington, D.C. to discuss plans for damage control in the face of the campaign. Invited were GAP, J.C. Penney, Eddie Bauer and others, along with the governments of Honduras and El Salvador.

J.C. Penney is a perfect example. On one hand, it has a corporate code of conduct, which supposedly guarantees human rights protections to anyone anywhere in the world involved in making products sold at J.C. Penney stores. But it would rather not get drawn into a public discussion about its sourcing practices.

On November 22, 1995, J.C. Penney's executive office put out an internal memo alerting all store managers:

"During the Holiday shopping period, much increased focus is being put upon supplier sourcing of merchandise for the retail industry, both by the U.S. Department of Labor and by labor organizations.

"Our stores and associates may become directly involved, as customers and possibly the news media ask questions...concerning sources of our merchandise...It is suggested that the store's management team be alert to such activity in the store, and, if it occurs, advise associates to refer all such questions to the store manager or a designated manager.

"Use the news release only in response to questions, as we are not trying to generate news coverage on this issue, only respond."

Companies like J.C. Penney do not want to raise questions about their sourcing from sweatshops in the U.S. and offshore. They would rather not have to describe conditions in their contractors' maquila plants. For example, at least four contractors in Haiti are supplying clothing sold in J.C. Penney stores. All these contractors are openly violating Haiti's minimum wage laws. Rather than paying the legal wage of 30 cents an hour--already pathetically inadequate--J.C. Penney's contractors are paying their workers as little as 11 cents an hour! J.C. Penney has a vested interest in not having such issues discussed, especially not in the media.

jcpenney internal correspondence memo

The companies have every reason to be afraid. Things like decency and concern on the part of U.S. and Canadian consumers could get out of control, and they know it. The North American people do not want to purchase products made in sweatshops. Human rights mean something to them.

A remarkable survey released in November 1995 by Marymount University in Arlington, Virginia, found that 78 percent of U.S. consumers would avoid retailers if they knew they were dealing in sweatshop goods. Nor is this just talk. Seventy-five percent of the working poor (families earning only $15,000 a year or less) said they would dig into their pockets and pay $1.00 more for a $20 garment to be sure that it was not made in a sweatshop. This is startling stuff, and it is not a momentary fad.

Back in December 1993, 65 percent of the U.S. people supported linking human rights improvements to the granting of trade privileges for China. Over the issue of human rights, the U.S. people were ready to take on one of the largest economies in the world.

It is the same in Canada. A recent poll (released in December 1995, by UNITE and the Fruitman consulting group in Ontario) showed that given the option, over 90 percent of Canadian consumers would choose to purchase products made under ethical conditions--and 85 percent would pay more for clothing made under lawful and humane conditions. More than two-thirds of Canadian shoppers would go out of their way to shop at retailers that featured "ethically made" products.

No wonder the corporations want to hide the reality of their sourcing practices, which, if exposed, would not sit well with their consumers.

Consumer concern grounds the strategy. All we need to do is smoke the companies out into the light of day and then help them to do the right thing. So, the first step is to engage the companies in a dialogue. Let the manufacturers and retailers explain to us why they cannot pay a living wage in Haiti. Half the maquilas in Haiti do not even pay the miserable 30 cent-an-hour legal minimum wage. Would the sky fall in on Corporate America if the companies paid--say--60 cents an hour? Could they afford it? Let the companies explain to us why they cannot translate their codes of conduct into Creole, and post them in their contractors' plants. If the companies have nothing to hide, why shouldn't independent human rights monitors have access to their contractors plants? Also, how does it help the North American people when U.S. companies pay 30 cent starvation wages in Haiti? How can we trade with people making 30 cents--or less--an hour?

We have every reason to demand a better deal for the Haitian people, as well as for the people of the U.S. and Canada. We have more power than we realize.

We can help companies do the right thing. The GAP listened to the U.S. and Canadian consumers--so will J.C. Penney, Walt Disney and the others. We just have to raise our voice.

 

model letter for walt disney co.

 

 

 

model letter to jc penney 

 

Ask the Comapnies Sourcing in Haiti To Sign the Pledge
We Pledge

We, ___________ Company, pledge to immediately comply with all Haitian labor laws covering all employees producing goods for our company, especially:

  • To pay at least the legal minimum wage of 30 cents an hour, including proper overtime rates
  • To pay all legal benefits, such as health, pension, sick days and 7th day bonus pay
  • To end sexual harassment
  • To respect the workers' right to organize and the right to a collective contract
  • To improve working conditions and to cease arbitrary and unfair production speed-ups
  • To translate our code of conduct into Creole, post it inour contractors' plants and distribute it to all employees and
  • To allow independent human rights observers to monitor our contractors' compliance with our corporate code of conduct

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

J.C. Penney
Excerpts from its "Foreign Sourcing Requirements"

In selecting suppliers, JCPenney attempts to identify reputable companies that are committed to compliance with legal requirements relevant to the conduct of their business...

JCPenney requires of its suppliers strict compliance with all contract provisions, as well as applicable laws and regulations, including those of the United States and those of the countries of manufacture and exportation...

JCPenney will not knowingly allow the importation into the United States of merchandise manufactured with convict labor, forced labor or indentured labor...[or] knowingly allow the importation into the United States of merchandise manufactured with child labor...

On visits to the foreign factories, for any purpose, JCPenney associates and buying agents have been asked to be watchful for the apparent use of prison or forced labor, illegal child labor, or indications of inaccurate country-of-origin labeling, to take immediate responsive action when necessary and to report questionable conduct in these areas to their management for follow-up and, when appropriate, corrective action...

If it is determined that a foreign factory utilized by a supplier for the manufacture of merchandise for JCPenney is in violation of these foreign sourcing requirements, JCPenney will take appropriate corrective actions, which may include cancellation of the affected order, prohibiting the supplier's subsequent use of the factory or terminating JCPenney's relationship with the supplier.

Sears, Roebuck and Co.
Excerpts from its "Import Buying Policy and Procedure"

It is the policy of Sears, Roebuck and Co....when purchasing merchandise not produced in the United States, to contract only with reputable suppliers of merchandise, the production facilities, business and labor practices, and merchandise of which comply with all applicable local and United States laws....Strict adherence is expected to local laws governing the working conditions, wages and minimum age of the workforce, and to all applicable United States laws and prohibitions...

Willful violation of this policy will result in the termination of the offending supplier.

In furtherance of this policy, Sears will...instruct its foreign buying office personnel to visit periodically suppliers' facilities to monitor compliance with this policy, and report, under justifiable circumstances, violations by suppliers of foreign and/or United States law to appropriate law enforcement authorities.

 

 Company Information

Sources: All salary and profit figures from the Securities and Exchange Commission, Forms 10-K or BusinessWeek, March 27, 1995. Salary figures include bonuses, but not stock options and other compensation.

Walt Disney
South Buena Vista Street
Burbank, CA 91521
Tel: 818-560-1000
1994 Profit: $1,110,400,000
CEO: Michael Eisner
1994 Salary: $8,029,000

Wal-Mart Stores Inc.
702 SW Eighth St.
Betonville, AR 72716
Tel: 501-273-4000
1994 Profit: $2,681,000,000
CEO: David D. Glass
1994 Salary: $1,060,532

J.C. Penney Co. Inc.
6501 Legacy Drive
Plano, TX 75024-3698
1994 Profit: $1,057,000,000
CEO: William R. Howell
1994 Salary: $2,445,267

Kmart Corp.
3100 West Big Beaver Road
Troy, MI 48084
Tel: 810-643-1000
1994 Profit: $269,000,000
CEO: Floyd Hall
1994 Salary (for J.E. Antonini,
resigned 4/12/95): $950,000

Sears Roebuck & Co.
Sears Tower
Chicago, IL 60684
Tel: 312-875-2500
1994 Profit: $1,259,000,000
CEO: Edward A. Brennan
1994 Salary: $1,664,273

Kellwood Co.
600 Kellwood Parkway
Chesterfield, MO 63017
Tel: 314-576-3100
1994 Profit: $32,740,000
CEO: William J. McKenna
1994 Salary: $1,100,000

Kellwood Lingerie/Activewear
(Division of Kellwood producing in Haiti)
1401 Old Hwy. 51 N.,
Summit, MS 39666
Tel: 601-276-9331
Sara Lee Corp.
70 W. Madison St. #4600
Chicago, IL 60602
1994 Profit: $260,000,000
CEO: John H. Bryan
1994 Salary: $2,026,000

H.H. Cutler Co.
120 Iona Ave. SW
Grand Rapids, MI 49503
Tel: 616-459-9101
Fax: 616-459-2135
CEO: Hal C. Smith

VF Corp.
(Parent of H.H. Cutler)
1047 North Park Road
Wyomissing, PA 19610
Tel: 215-378-1151
Fax: 215-375-9371
1994 Profit: $274,536,000
CEO: Lawrence R. Pugh
1994 Salary: $1,888,000

L.V. Myles
135 Madison Ave., 10th Fl.
New York, NY 10016
Tel: 212-735-0900
Fax: 212-725-0922
CEO: Paul M. Miller

Movie Star Garment Co.
136 Madison Ave.
New York, NY 10016
Tel: 212-679-7260
Fax: 212-684-3295
CEO: Mark M. David
1994 Salary: $550,000

Universal Manufacturing Corp.
318 Gidney St.
Shelby, NC 28150
Tel: 704-487-4359
Fax: 704-482-0723
CEO: Bill Westover

Kingly Manufacturing Corp.
(Parent of Universal Mfg.)
70 W. 36th St.
New York, NY 10018
Tel: 212-279-3240
CEO: Arthur Mintz

Ventura Ltd.
430 W. 18th St.
Hialeah, FL 33010
Tel: 305-888-7400
Fax: 305-888-1501
CEO: Arthur J. Boren

Ansell Edmont Industrial Inc.
1300 Walnut St. #6000
Coshocton, OH 43812
Tel: 614-622-4311
Fax: 800-800-0445
CEO: Gwynne Woodward

Pacific Dunlop Ltd.
(Parent of Ansell Edmont)
Level 41, 101 Collins St.
Melbourne, Victoria 3000 Australia
Tel: 613-270-7270
Fax: 613-270-7313
CEO: John B. Gough

Happy Fella (H.F. Mfg. Corp.)
112 W. 34th St.
New York, NY 10120
Tel: 212-594-9142
Fax: 212-967-7148
CEO: Bruce Tucker

Ventura Products
102 N. 85 Pkwy, Suite 1
Gayetteville, GA 30214
Tel: 404-964-0303
Fax: 404-460-1245
CEO: Terry Savage

Elsie Undergarments
8295 W. 20th Ave.
Hialeah, FL 33014
Tel: 305-822-6981
Fax: 305-822-1999
CEO: Elsa Silverberg

Fine Form Inc.
1572 61st St.
Brooklyn, NY 11219
Tel: 718-259-1000
Fax: 718-259-0278
CEO: Abraham Kandel

Popsicle Playwear (Parent of Sister Sister)
100 West 33rd St.
New York, NY 10001
(212) 594-5511
(212) 564-0174
CEO: Mark Adjmi

 


  

APPENDICES

APPENDIX A: Presidential Decree Raising Minimum Wage

The following is a text of President Aristide's May 4, 1995 decree raising the minimum wage:
Decrète

Article 1. A partir du 1er juin 1995 le salaire minimum à  payer dans les Etablissements de travail industriels, commerciaux et agricoles, est fixé à : trente-six Gourdes (36.00 Gourdes) par journée de huit (8) heures de travail.

Les salaires minima pratiqués à  cette date qui sont supérieurs au salaire minimum de trente-six Gourdes (36.00 Gourdes) restent en vigeur.

Article 2. Lorsque le travail est occupé à  la piéce ou à  la tache, le prix payé pour l'unité de production (la pièce, la douzaine, la grosse, le mètre, ...etc.) doit permettre à  un travailleur fournissant huit (8) heures de travail par jour de réaliser pour sa journée de travail au moins le salaire minimum fixé à  l'article 1 du présent Décret.

Article 3. Tout accord qui pourrait intervenir entre l'employeur et le travailleur sur une base inférieure au salaire minimum prévu par le présent Décret est considéré comme nul et non avenu.

Article 4. Le présent Décret abroge toutes Lois ou dispositions de Lois, tour Décrets ou dispositions de Décrets, tous Décrets-Lois ou dispositions de Décrets-Lois qui lui sont contraires et sera publié et exécuté à  la diligence des Ministres des Affaires Sociales et du Travail, de la Justice, du Commerce et de l'Industrie, de l'Information et de la Coordination, chacun en ce qui le concerne.

Donné au Palais National, à  Port-au-Prince, le 4 mai 1995, An 192ème. de l'Independence.
Par le Président: Jean-Bertrand Aristide

TRANSLATION:
Decree

Article 1. Beginning June 1, 1995, the minimum wage paid in industrial, commercial and agricultural businesses is fixed at 36 gourdes per 8-hour day. Those minimum salaries in effect at this time that are higher than the minimum wage of 36 gourdes remain in effect.

Article 2. Where the employee works per piece or per task, the price paid for a unit of production (per piece, per dozen, per gross, per meter, etc.) must allow the employee who works 8 hours to earn at least the minimum salary fixed in Article 1 of this decree.

Article 3. Any agreement between an employer and an employee based on a wage lower than the minimum wage set by the present Decree is considered null and void.

Article 4. The present Decree abrogates all Laws and Decrees that are contrary to it and will be published and executed by the Ministry of Social Affairs and Labor, the Ministry of Justice, the Ministry of Commerce and Industry, and the Ministry of Information and Coordination, as it pertains to each.

Given at the National Palace, Port-au-Prince, May 4, 1995, 192nd year of Independence.
By the President: Jean-Bertrand Aristide

APPENDIX B: Code du Travail / Labor Code

The following are the Articles of the Haitian Labor Code relevant to the minimum wage issue:

Article 96. Dans tous les établissements agricoles, industriels et commerciaux, la durée normale du travail est de huit (8) heures par jour et quarante huit (48) heures par semaine. Sans excéder neuf (9) heures par jour pour les établissements industriels et dix (10) heures par jour pour les établissements commerciaux et les bureaux, les parties peuvent se mettre d'accord entre elles pour répartir la durée hebdomadaire du travail autrement que par huit (8) heures par jour, uniquement lorsque l'horaire de travail est de 48 heures par semaine ou lorsque l'établissement de travail utilise les services de son personnel six jours par semaine.

Article 97.2 Les heures supplémentaires fournies ainsi en excédant de la durée normale du travail seront payées avec une majoration de cinquante pour cent (50%) et inscrites, aux fins de contrôle de l'autorité, sur le registre de personnel, de même que le salaire payé au personnel qui a effectué ces heures supplémentaires et le motif pour lequel elles ont été demandées, cela sans préjudice de la majoration prévue pour le travail de nuit.

Article 100. Tout établissment industriel ou commercial, public ou privé est tenu de calculer la durée normale du travail de manière à  cesser les affaires et libérer son personnel à  cinq heures de l'après-midi, du 1er octobre au 30 avril, et à  4 heures p.m. du 1er mai au 30 septembre...

Article 107. Tout le personnel occupé dans un établissment industriel ou commercial public ou privé doit, après une période de six jours consécutifs de travail au cours d'une semaine, bénéficier d'un repos hebdomadaire payé comprenant au minimum vingt quatre (24) heures consécutives, quel que soit le nombre d'heures fournies durant cette période.

Article 119. Les heures de travail effectuées exceptionellement le dimanche et les jours fériés chômés sont payées avec une majoration de cinquante pour cent (50%), cela sans préludice de la majoration prévue pour le travail de nuit et le paiement du repos hebdomadaire.

Article 137. Le salaire minimum est fixé par Loi ou Decret sur rapport motivé du Conseil Supérieur des Salaires au Ministère des Affaires Sociales. Il sera périodiquement ajusté en fonction des variations du cout de la vie ou toutes les fois que l'indice officiel de l'inflation fixé par l'Institut Haitien de Statistiques et d'Informatique accuse une augmentation d'au moins dix pour cent (10%) sur une période d'une année fiscale.

TRANSLATION:

Article 96. In all agricultural, industrial and commercial establishments, the normal duration of the workday is 8 hours per day and 48 hours per week. Without exceeding 9 hours per day in industrial establishments and 10 hours per day in commercial establishments and offices, the parties may agree to a longer or shorter workday, as long as the work schedule is 48 hours per week or the establishment uses the services of its personnel 6 days per week.

Article 97.2 Overtime hours furnished in excess of the normal duration of work will be paid at a premium of 50% [time and a half] and will be recorded by the employer in the personnel register, as well as the amount paid to the employee and the reason the overtime was necessary, in addition to any premiums paid for work at night.

Article 100. All industrial, commercial, public and private establishments are required to schedule the workday such that all work is stopped at 5 p.m, from Oct. 1 to April 30, and at 4 p.m., from May 1 to Sept. 30...

Article 107. All personnel employed in an public or private, industrial or commercial establishment must, after working six days consecutively in the course of one week, be granted a paid weekly rest of at least 24 consecutive hours, paid according to the number of hours worked per day during the rest of the week.

Article 119. The hours of work performed in special cases on Sundays and Holidays must be paid with a premium of 50% [time and a half], in addition to any premiums paid for working at night and the payment for the weekly rest.

Article 137. The minimum wage is fixed by Law or Decree, under consultation with the Advisory Council on Wages of the Ministry of Social Affairs. The wage will be adjusted periodically as a function of variations in the cost of living or every time that the official index of inflation as defined by the Haitian Institute of Statistics and Information indicates an increase of at least 10% in one fiscal year.


 

 

Notes
1. August 1995 exchange rate:  15 gourdes = US $1
 
2. Piece rate is a system in which wages are tied to the completion of a specified number of units of work per hour.  In Creole, workers who produce on the piece-rate system are described as working "pa kouray," literally "by courage."  In common speech it means something close to "by sheer strength of will," referring to the intense determination required simply to survive in such factories.
 
3. See Articles 107 and 119 of the Haitian Labor Code in Appendix B of this report.  If employees work 8 hours per day for 6 days consecutively, Monday through Saturday, the law requires that they be paid for 8 hours of work on their day off (Sunday).  If they work Sunday as well, the law requires that they be paid time-and-a-half for the hours they work, in addition to the full 8 hours of pay they would normally receive.
 
4. See section VI of this report
 
5. Le Moniteur: Journal Officiel de la Republique d'Haiti, May 4, 1995, p.463.  See
Appendix A for the full text of the decree.
 
6. Pacific Dunlop is the world's largest producer of commercial rubber goods, specializing in latex condoms.  The company's net profit in fiscal year 1994 was $221 million.  Source: Dow Jones News Service
 
7. See the National Labor Committee report, Haiti After the Coup: Sweatshop or Real Development? April 1993, pp 26-28.
 
8. Denise Confident, 5 goud pou 70 douzen, 36 goud pou 250 douzen, Libete no. 143, June 21, 1995, p.15.
 
9. In the early 1970's, Baker was allegedly in league with a former Defense and Interior Minister of Francois ("Papa Doc") Duvlier, Luckner Cambronne, also known as the "Vampire of the Caribbean," to sell blood plasma (through a Miami stockbroker named Joseph Gorinstein) to North American laboratories owned by Cutter Laboratories, Armour Pharmaceutical, Dade Reagent and Dow Chemical.  This fact was confirmed by sources with personal knowledge of Baker's career who spoke on condition of anonymity.  Cambronne's company, Hemocaribian, shipped as much as five tons of Haitian plasma to the U.S. each month.  The enterprise also did a brisk business in dead bodies: "Cambronne also dealt in cadavers, in almost as much demand.  To save the living, medical students must dissect the dead, and obtaining corpses in sufficient quantity is the perennial problem of medical schools.  Haitian cadavers, readily available once Cambronne entered the business, had the distinct advantage of being thin, so the student had no layers of fat to slice through before reaching the object of the lesson.  Cambronne, using the refrigerated container service recently introduced into Haiti, supplied these corpses on demand.  When the general hospital failed to provide him with enough despite the $3.00 he paid for each body, he simply stole them from various funeral parlors."  From Elizabeth Abbott, Haiti: The Duvaliers and their Legacy, New York: McGraw Hill, 1998, p. 172.  See also Paul Farmer, The Uses of Haiti, Common Courage Press: Monroe, Maine, 1994, pp 49-51.
 
10. USAID Status Report, June 29, 1995, p.10.
 
11. See following page for excerpts of the Wal-Mart document, as well as excerpts from the codes of conduct of JC Penney, Sears, and other companies included in other parts of the report.
 
12. See Appendix D of this report for excerpts of Wal-Mart's "Standards for Vendor Partners."
 
13. NBC Dateline report, Dec. 22, 1992.
 
14. Daily News Record, Feb. 17, 1995.
 
15. William Gibson, "U.S. Knows Cost of Maintaining Peace in Haiti." Ft. Lauderdale Sun Sentinel, Sept. 17, 1995, p.14A.
 
16. USAID Status Report, June 29, 1995.
 
17. See the National Labor Committee Report, Haiti After the Coup: Sweatshop or
Real Development?, April 1993, pp. 21-24.
 
18. "Haiti," Project Paper/Promotion of Business and Export Project (Amendment Number 1/Project Number: 521-0186), USAID, June 29, 1991.
 
19. Inter Press Service, Oct. 15, 1994.
 
20. See Appendix B of this report for the relevant sections of the Labor Code and graphs for a table of inflation rates.
 
21. In his speech, President Aristide said that there were three main proposals on the wage issue: (1) The Tripartite Commission, an advisory council of businesspeople, government officials and labor leaders (the choice of whom was heavily influenced by a USAID-backed labor institute), had recommended a wage of 29 gourdes for Port-au-Prince and 23 gourdes for the countryside. (2) Ministers in the Aristide administration had proposed a wage of 30 gourdes across the board.  (3) A wide variety of groups were demanding a wage of between 50 and 75 gourdes per day.  Sources close to President Aristide way that he himself favored raising the wage to 75 gourdes.
 
22. See real wage chart in graph section.  In 1990, the real wage in 1980 gourdes was 7.85.  In 1995 the real wage in 1980 gourdes is estimated at 6.75.
 
23. Jean-Frederic Sales, Code du Travail de la Republique d'Haiti, Presses de l'Universite Quisqueya, Port-au-Prince, 1992, pp. 249-257.  Jean-Claude Duvalier decreed on Sept. 15, 1980 that the minimum wage would be between 13.20 and 15.60 gdes, depending on the type of work done.  On Au. 27, 1984, he decreed that effective Oct. 1, 1984, the minimum wage would be 15 gdes for all industries in the capital, 13.20 gdes elsewhere.
 
24. 13.20 — 6.75 / 13.20 = 49%
 
25. Business Week, Sept. 4, 1995, p.60. The New York Times, August 1, 1995. Forbes Magazine recently reported Eisner to be worth $460 million. "The Forbes Four Hundred," Forbes Magazine, Oct. 16, 1995, p.232.
 
26. See graph for a comparison of wage rates in the region as well as selected developed countries.
 
27. This total was calculated as follows: Food 25X7=175 gdes/week; Transportation 6X6=36 gdes/week; Lunch 7X6=42 gdes/week; Rent 1500/26=58 gdes/week; School (for 3 children) 3X900/52=52 gdes/week.  Total 175+36+42+58+52=363.
 
28. M. Catherine Maternowska, "Coups d'Etat and Contraceptives: A Political Economy Analysis of Family Planning in Haiti," doctoral dissertation (forthcoming), Dec. 1995, Department of Anthropology/Division of Sociomedical Sciences, Columbia University.
 
29. Sources: Securities and Exchange Commission, Form 10-K, Jan. 31, 1995.
 
30. Sources: Securities and Exchange Commission, Form 10-K, Sept. 30, 1994.
 

 

 

 




RESOURCES

The following are some of the groups actively involved in the struggle for democracy, human rights and economic justice in Haiti:

Washington Office on Haiti
P.O. Box 29218
Washington DC 20017
Tel: 202-543-7095
Fax: 202-319-6052
email: wohaiti@igc.apc.org

The Washington Office on Haiti is a public education and advocacy organization for human rights and economic justice in Haiti. It coordinates programs that help respond to human rights injustices faced by Haitian people, organizes grassroots delegations to the country, and builds long-term solidarity with Haitian organizations.

Mouvman Peyizan Papay Education and Development Fund (MPP-EDF)
25 West St. 2nd fl.
Boston MA 02111
Tel: 617-542-1140
Fax: 617-542-1017

MPP-EDF helps to forge direct links with the Haitian peasant movement. The fund supports education and development projects of the Mouvman Peyizan Papay (Peasant Movement of Papaye), the largest peasant union in Haiti.

Quixote Center/Haiti Reborn
P.O. Box 5206
Hyattsville, MD 20782
Tel: 301-699-0042
Fax: 301-864-2182

The Quixote Center/Haiti Reborn supports popular organizations in Haiti; conducts public information campaigns in the U.S. and monitors U.S. policy towards Haiti.

 

New Channels Communications
50 Lexington Ave., Suite 186
New York, NY 10010
Tel: 212-481-0102
Fax: 212-532-1766

New Channels coordinates The Haiti Public Information Campaign, a national media and public education program. HPIC works with U.S. NGO's and Haiti's popular organizations to project independent perspectives to the mainstream and progressive press. HPIC provides journalists with investigative stories, background analysis, and up-to-the-minute information.

Voices for Haiti
P.O. Box 29615
Washington D.C. 20017
Tel: 202-319-5544
Fax: 202-319-6090

Voices for Haiti is a grassroots campaign of more than 75 U.S. organizations to support democracy, human rights and economic justice in Haiti.

Lambi Fund
P.O. Box 18955
Washington D.C. 20036
Tel: 202-833-3713

The Lambi Fund provides financial support to grassroots development projects: community stores, tool banks, credit programs for merchant women, communal bakeries and many more micro-projects.

Haiti Info
P.O. Box 15333
Pétionville, Haiti
Tel: 011-509-45-35-70
email: hib@igc.apc.org

Haiti Info provides up-to-date information on the struggle for justice and democracy in Haiti.

Plate-forme Haitienne de Plaidoyer pour une Developpment Alternatif
(Haitian Alternative Development Platform)
Angle Rue Frémy et Av. John Brown
Port-au-Prince, Haiti
Tel/Fax: 011-509-45-88-36

The Haitian Alternative Development Platform advocates for economic justice through research and popular education, currently focusing on resistance to structural adjustment and privatization in Haiti.

International Liaison Office
1333 Connecticut Ave. NW
Washington D.C. 20036
Tel: 202-965-0830
Fax: 202-965-0831
email: ilophaiti@igc.apc.org

The International Liaison Office serves as a liaison between the government of Haiti and Haitian and international grassroots movements for democracy. The office facilitates contact between U.S. and Haitian labor activists.

 

 

JOIN THE NATIONAL LABOR COMMITTEE, HELP SUPPORT LABOR RIGHTS.