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January, 01 2004 |  Download PDF |  Share

Why Is the NBA Exploiting 7-cent-an-hour Slave Labor and Supporting Brutal Military Dictators and Drug Lords in Burma?

Why Is the NBA Exploiting 7-cent-an-hour Slave Labor and
Supporting Brutal Military Dictators and Drug Lords in Burma?

The NBA's flagship store in New York City is selling $60 NBA "I Love This Game!" sweatshirts made in Burma. Sweatshop workers in Burma were paid just four cents for each NBA sweatshirt they sewed.

 The National Basketball Association's flagship store on Fifth Avenue in Manhattan is selling racks of $60 NBA "I Love This Game!" hooded sweatshirts made in Burma. In fact, the NBA is so proud of these sweatshirts, which come in various colors, that they are prominently featured in the NBA's window display on Fifth Avenue.

In Burma, garment workers' wages are as low as seven cents an hour, 56 cents a day and $3.23 a week. The workers have no rights, and even questioning factory conditions can result in imprisonment. The National Labor Committee estimates that the workers in Burma were paid just four cents for each NBA hooded sweatshirt they sewed, meaning that their wages came to less than one-tenth of one percent of the NBA's $60 retail price for the garment.

What the NBA is doing is flat wrong.

The "Burmese Freedom and Democracy Act" prohibiting imports from Burma was passed by both houses of Congress and signed into law by the President on August 1, 2003. The law, which was to go into effect 30 days later, states: "No article may be imported into the United States that is produced, mined, manufactured, grown or assembled in Burma." The ban is to remain in place until a new, democratically-elected government requests its removal based on an end to slave labor and gross human rights violations.

The NBA sweatshirts made in Burma were raced to the United States just days before the "Burmese Freedom and Democracy Act" was to go into effect on September 1, 2003, barring future imports from Burma. NBA officials knew exactly what they were doing. Three shipments of NBA sweatshirts made in Burma arrived in Los Angeles and Long Beach on August 2, 14 and 24. In this last case, the shipment came in just six days before the ban was to go into effect.


JANUARY 21, 2004

-UPDATE-

The NBA acknowledged its serious error, and as of yesterday afternoon, January 20, was removing all the NBA sweatshirts made in Burma from its store. This is certainly a good first step.

However, it leaves unanswered many major questions:

1) If the NBA has a Code of Conduct which purports to guarantee respect for the human and labor rights of any workers in the world making NBA goods, how is it possible, in the first place, that these $60 NBA sweatshirts were made in Burma by workers stripped of every single right and paid just seven cents an hour? The NBA must immediately make its Code of Conduct available to the public.

2) Isn't the NBA even tracking what countries its goods are being produced in? If not, how credible is it that the NBA is monitoring factory conditions, when they are not even aware of what countries their goods are being produced in?

3) If the NBA was truly delivering a serious message to its contractors regarding the NBA's commitment to respect human rights, would one of its contractors lightly defy the NBA by sourcing its work in one of the most repressive places in the world? Would they so easily jeopardize their future business relationship with the NBA? Or is the real message the NBA is delivering to its contractors one of indifference and lack of concern when it comes to human and worker rights?

4) What does the NBA know of factory conditions in Vietnam and China where their NBA "I love this game!" sweatshirts are currently being made? Will they report these factories to the American people?

5) Will the NBA publicly release the names and addresses of the factories they use around the world to make the NBA products we purchase? If not, why not? This would be one simple concrete step the NBA could immediately take to prove that it has nothing else to hide.


The NBA sweatshirts were made in Burma at:

Leading Garment Manufacturing Co. LLtd.                                                   
No. 97 Industrial Zone (1)                                                                     
Hlaing Thayar Township                                                                                     
Yangon, Myanmar

The NBA's contractor and importer of record was:

Beimar Inc.                                                                                      
4219Cortedela Siena                                                                                           
San Diego, CA 92130                                                                       
Phone: 858-792-9950

Clearly the NBA was flying in the face of the import ban, knowingly violating the spirit and intent of Congress and the Administration, not to mention the hopes of 50 million people in Burma suffering under the brutal military dictatorship. Immediately following the September deadline, Beimar, and presumably the NBA, switched a huge amount of production of the exact same sweatshirt (80% cotton, 20% polyester knitted fleece sweatshirts) to Vietnam and China.

The factory making the sweatshirts in Vietnam is:

The 26 Branch Company
Bach Dang, Hongbang
No. 4
Haiphong, Vietnam

As of Friday, January 16, 2004, these NBA sweatshirts made in Vietnam began showing up at the NBA store in New York City.

In China, only the foreign trade corporation is listed:

China National Pharmaceutical Foreign Trade Corporation
No. 20 Zhichuan Road
Beijing, China
Phone: 010-623-86425

In Vietnam, wages can be as low as nine to 15 cents an hour. It is not uncommon for young women to be forced to work 14 ½ hours a day, seven days a week. There is no such thing as overtime pay. Workers earn the same $35 to $40 a month whether they work 48, or 60, or 80 hours a week. There is no health insurance. There is no right to organize independent unions.

In China, it is not uncommon for young women to be forced to work 13 to 16 hours a day, seven days a week for wages as low as 16 cents an hour. Many workers receive just 12 days off a year. Few workers have any health insurance. In China, workers have no freedom of association or right to organize. Workers attempting to organize an independent union will be fired and perhaps imprisoned.

Less than three years ago, the NBA pledged that their goods would never again be made under sweatshop conditions. In May 2001, when the National Labor Committee revealed that the NBA team jerseys were being made under sweatshop conditions in El Salvador by workers paid just 29 cents for each $140 NBA jersey they sewed, the NBA promised a thorough investigation. The sweatshop workers in El Salvador sewing the NBA garments were also subjected to mandatory pregnancy tests, forced overtime, filthy drinking water and the total repression of their rights to freedom of association and to organize.

At the time, NBA spokesman Mike Bass responded by saying that the NBA would "investigate the allegations immediately." Bass went on to say that it was mandatory for all NBA licensees to strictly adhere to the NBA's code of conduct, which guarantees humane working conditions. Whatever happened to the NBA's investigation? And for that matter, where is the NBA's code of conduct? It is certainly not available to the public on the NBA website. If the NBA does have a code of conduct that guarantees humane working conditions, how is it possible that NBA sweatshirts were sewn under slave labor conditions in Burma, for starvation wages, by workers who have no rights whatsoever?

 


 

The NBA Sweatshirt Made in Burma

—Exploitation and huge Mark-ups—

 

A cost breakdown: Four cents to the workers, and $46.92 to the NBA

The workers in Burma were paid just four cents for each NBA sweatshirt they sewed.

Commerce Department records show that the sweatshirts entered the U.S. with a landed Customs value of $13.08, which is the total cost of production, including all materials, accessories, direct and indirect labor, shipping costs and profit to the factory—including the dictators' cut and the Beimar company's.

The NBA then turns around and marks up the price by a stunning $46.92—and sells the sweatshirt to us for $60! Exploitation pays.

According to very knowledgeable industry sources, it takes at most 15 to 20 minutes of labor to sew a premium, high end sweatshirt, which presumably the $60 NBA sweatshirt is. Depending upon how the factory's assembly lines are laid out, there will be 35 to 40 specific steps or operations involved in sewing their garment.

This means that the workers in Burma were paid just two to four cents for each NBA sweatshirt they sewed. At the low end, garment workers wages in Burma are seven cents an hour. If a worker earning seven cents an hour took 15 minutes to sew the garment, then her wages would come to a little less than two cents. (Fifteen minutes = ¼ hour; $0.07 x 0.25 = $0.0175)

An average garment worker's wage in Burma may approach 14 cents an hour. This would mean that the workers could earn, on average, a little more than four cents per garment. (Average time to sew the garment is 17.5 minutes; 17.5 minutes = 0.29166% of an hour; $0.1475 x 0.29166 = $0.0430207)

The direct labor cost to sew the garment is four cents. If we add a 100 percent premium on top of this direct labor cost, we can more than account for all indirect labor costs and factory overhead. This would bring the total cost of production to less than nine cents.

A large NBA sweatshirt would require approximately 1.375 yards of knitted fabric, at an average cost of about $3.50 per yard. This would bring the fabric cost to $4.8125. Various accessories would add to the material costs: 65 cents for the zipper; 12 cents for the drawstring for the hood; 25 cents for thread, and $1.50 for elastic bands used on the bottom hem and sleeves. So the accessories could add another $2.52 on top of the $4.8125 in fabric—bringing the total material cost to approximately $7.33.

A conservative estimate would put shipping costs at $0.35.

This means that we are looking at a total cost of production approaching $7.77.

  • Direct labor: $ 0.0430207
  • Indirect labor and factory overhead: $ 0.0430207
  • Fabric $ 4.8125
  • Zipper $ 0.65
  • Draw cord for hood $ 0.12
  • Thread $ 0.25
  • Elastic for bottom hem & sleeves $ 1.50
  • Shipping $ 0.35                         

                        Total:          $ 7.77

 

Since we know the garment entered the U.S. with a landed Customs value of $13.08, this means that the factory profit amounted to something like $ 5.331. (This would also include the cut to the military dictators, other graft and a part of Beimar's import profits.)

The NBA then marks up this $13.08 (the total cost of production) by $46.92, to arrive at its $60 retail price. This is a mark-up of 359 percent.

The workers wages in Burma—four cents for each NBA sweatshirt they sewed—amounts to less than one-tenth of one percent of the NBA's retail price. ($0.0430207 divided by $60 = 0.000717). This is the most extreme exploitation we have seen.

The NBA's cut—its mark-up of $46.92, is over 1000 times greater than what the workers were paid to sew the garment.

The NBA must take several immediate steps to regain the confidence of the American people that the NBA goods we purchase are not being made under sweatshop conditions.

1. The NBA must publicly agree never again to produce goods in Burma, until the military dictators are removed and a democratically-elected government is in place.  

2. As a first step, to demonstrate good faith, the NBA should follow the lead of the largest, most prestigious universities and sports powerhouses in the country by agreeing to publicly disclose the names and addresses of the factories they use around the world to produce the NBA goods we buy. (Over 100 universities have demanded disclosure of factory locations as a safeguard against sweatshop goods being sold to their institutions.) This would be one simple concrete step the NBA could immediately take to demonstrate that it has nothing to hide.

3. The NBA should agree to meet with the National Labor Committee and the No More Sweatshops Coalition to discuss ways to help guarantee that future NBA licensing is conditioned upon strict adherence to core, internationally recognized human and worker rights standards.

If implemented, this would result in a win-win situation for the NBA, the American people and for the thousands of workers across the developing world who make NBA products.

Note: The NBA has met one demand already by pulling Burma-made garments from the NBA store in New York City. These garments should be given to inner city charities. The NBA should not be profiting from slave labor and the violent repression of democracy.

 


 

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