Reports

September, 26 2006 |  Download PDF |  Share

The Case of Dong Bang Industrial S.A, Guatemala

"In other countries you see people working with their heart and earning less than you. Those are good workers." — Dong Bang Supervisor

  • Workers making 20 cents for every pair of Sag Harbor women's pants they sew and 37 cents for every pair of George ME pants for Wal-Mart (ME stands for the designer, Mark Eisen). Workers are also sewing clothing for Studio 1940, Chadwicks and East 5th, for JC Penny.
  • Denied clean water at the factory, workers must either buy bottled water with what little they earn or drink the contaminated tap water and risk illness.
  • Workers forced to work overtime or face fines of $6.56, out of a daily wage of only $9.
  • "I understand that the code of conduct means I shouldn't say bad words and I shouldn't say things that could offend other workers. That's what I've been told."
  • Pregnant women are also forced to work overtime.
  • Workers must produce at least 2,000 pairs of Sag Harbor pants per shift. "Sometimes we reach the goals but it is very tiring, because at 5 o'clock  you're very tired from sitting and your lungs hurt from sewing for such a long time."

Dong Bang Industrial S.A.
Km. 49.5 Carretera Interamericana
Chimaltenango, Guatemala
Phone:  (502) 78490911
General Manager: Alex Lee (Korean)
E-mail: alexlee@gold.guate.net.gt
Chief of Personnel: Edi Arrivillaga (Guatemalan)
Production Manager: Mr. Park

Table of Contents

 


Introduction 

The Dong Bang factory opened in 1991. Currently there are approximately 1,200 to 1,300 workers, 60 percent of them women. The factory is exempt from paying income and other taxes under Guatemala's 1997 Law of Exemption, Exoneration and Deduction Suppression in Tributary and Fiscal Matters. However, such exemption expires after 12 years. Therefore, Dong Bang Fashion S.A. changed its name to Dong Bang Industrial S.A., while employing the same workers in the same jobs, retaining the actual factory and keeping all of the original machinery. Back to the top

  CEADEL — Centro de Estudios y Apoyo al Desarrollo Local
Center for Studies and Local Development
1ª. Avenida 4-76, Zona 4 — Chimaltenango, Guatemala
Tel: (502)7 839 3349
José Gabriel Zelada Ortiz, Director (502) 5567 6439
Gladis Marroquin, Project Director (502) 58625207

"CEADEL is an association that promotes and defends the human rights in general and particularly the rights of the childhood and women working."

CEADEL works with women who work in maquila factories. CEADEL organizes vocational trainings for workers in such fields as literacy, computer skills, worker rights, organizing and human rights.

CEADEL also with young agricultural workers working with flowers, fruits and vegetables. The organization works to prevent young people, especially women, from joining gants.

 


 

General Conditions

The NLC interviewed a number of workers from the Dong Bang factory, with the help of the Center for Studies and Local Development (CEADEL) in August of 2006. Throughout the report below are excerpts from various workers' testimonies.

1) No Clean Water

The factory no longer provides workers with clean drinking water, leaving them to drink contaminated tap water or buy the water from supervisors. In the past, workers had to buy their water from the on-site medical clinic, where workers suspected they were being overcharged.

We don't understand why they don't want to give us bottled water. A few months ago they gave us water, but now they say the factory is bankrupt and they don't have money to buy water. So, if you're thirsty, you have to drink water from the tap, but we think it's not safe, because some people get sick when they drink it. We get water from the supervisors, but we have to give them money and they buy it from the trucks that sell bottled water.

2) Deductions and Fines

Workers are fined for a wide variety of reasons, usually accompanied by a "warning." A worker who receives three warnings is fired and loses all rights, including pension and maternity benefits.

A worker who does not work overtime will be given a warning and fined 50 Quetzals, or $6.56. These workers are only making about $9 a day, without overtime. Workers are similarly fined for arriving late to work or spending more than five minutes in to the bathroom.

We have 5 minutes to go to the bathroom, if you stay more than 5 minutes, the supervisor takes you to the office. In the office they scold us, they ask us why we stay so long in the bathrooms. They say we can't waste so much time, the factory can't afford it. Sometimes they give you a warning [and] a 50 Quetzals ($6.56) fine.

Another worker explained: 

We have to be at our machines at 7:50 a.m., so we have to be inside the factory at 7:45 a.m., but there's a big line because they search us. If we aren't at our machines at 7:50 a.m. they can take us to the office and we receive a warning. Some workers receive a fine of 50 Quetzals ($6.66) when they receive a warning.

3) Pregnant Women Forced to Work Overtime

[Pregnant women] are mistreated on the lines, constantly pressured for production. It seems like [the factory] want to make them so desperate they'll quit and forgo their maternity benefits. It seems like mistreating pregnant workers is a policy for the management. Sometimes they are forced to work overtime, and they have to do it. Can you imagine, on Thursday, we worked [from 7:50 a.m.] until 8:30 p.m.!

4) Regular Body Searches

We're searched in the morning when we enter the factory, when we come back from lunch and again when we're leaving in the afternoon or evening. They're looking for candy or pieces of cloth being taken out of the factory. That's why we were careful with the labels we took for this meeting.

5) Workers Complain of Heat and Noise Inside the Factory

We take Diclofenac (an anti-inflammatory) because we suffer from headaches because of the noise inside the plant, from the machines and from the irons and also because of the pressure we work under.

Another worker explained:

The [on-site] clinic was selling water. They were making money, because they sell half a liter of bottled water for 3.5 Quetzals ($0.46) and it's very hot inside the factory. The men take off their shirts to work. You feel like you're suffocating from the heat. Especially when all the windows are closed, it feels very hot. The second week of August they stopped selling water " Most of the workers are now drinking water from the tap.

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6) Verbal Abuse From Supervisors

Workers report supervisors regularly tell them they are "good for nothing." Three workers explained the situation to the NLC:

[One supervisor] usually says he feels like grabbing us by our necks because we're good for nothing. He shouts at us. He takes the chart where the production goals are written and bangs it in front of everyone. He doesn't care. He shouts at all the workers. Can you image? We feel bad. We feel miserable. I think that if I were a supervisor I would treat the workers better so they would work more, but he just shouts that there are some people in the line who are a nuisance, good for nothing. [He says], 'If I could, I would drop you and send you back home.'

There's a supervisor who " shouts so loud that you can hear him throughout the entire factory and everyone turns to see who he is shouting at and you feel so ashamed. [He says], 'This shit isn't good' or 'That idiot's garbage' or 'This is the worst group I've ever had.'

The supervisors usually say 'You aren't grateful for how much we help you with your work. You should see how many people come to the factory on Fridays begging for a job' or [they'll say] 'In other countries you see people working with their hearts and earning less than you—those are good workers.'

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7) Clinic Inadequate

There is an on-site clinic that is stocked with bandages and rubbing alcohol. However, workers have little confidence in the clinic. The clinic used to sell water to workers, after the factory stopped providing it, but has recently stopped. Furthermore, workers complain that any available medication is more expensive than those being sold at drugstores. Generally, workers only use the clinic to buy headache medication.

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Wages

The wage system in Guatemala is very different from that in the United States, and can be somewhat complicated. All workers at the Dong Bang factory receive the legal minimum wage for Guatemala. The minimum wage is 43.64 Quetzals per day ($5.73). Therefore, for an eight-hour day, workers are earning 5.46 Quetzals, or 72 cents an hour.

Overtime is paid by taking the basic daily wage of 43.64, dividing it by eight hours of ordinary work and multiplying by 1.5. Therefore, overtime is paid at 8.185 ($1.07) Quetzals per hour. However, all workers also receive 250 Quetzals per month as a nationally mandated bonus. This makes for a monthly wage of 1,559.20 Quetzals ($32.81) for a 30 day month.

In Guatemala, there is a "seventh day bonus," meaning that, assuming workers do not miss any days of work, they get paid an extra days' pay every week. Assuming that all workers received this bonus, they would still be making only 6.96 Quetzals, or 91 cents an hour (43.64 X 7 days, divided by 44 hours of work per week).

However, because the minimum wage is so low and does not allow workers to afford even the most basic necessities, the government has mandated that all employers pay an extra 250 Quetzals every month as a bonus. Therefore, including the mandatory bonus, and assuming that workers have not missed any days of work and are therefore receiving their "seventh day bonus," these workers are making at the most 8.50 Quetzals, or $1.12 per hour of work.

Workers are supposedly paid a bonus of 25-90 Quetzals ($3.28-$11.81) when they reach their production goal, but the workers report that the bonuses are given out arbitrarily, and that workers generally don't understand how the bonus system works. Back to the top 

Regular Wages

(without overtime)

Dollars Quetzals 
per hour $1.12 8.50
per week $51.11 389.58
per month $204.56 1,559.20
per year $2,454.67 18,710.40

 


 

Hours

Monday to Friday: 7:50 a.m. to 12:00 p.m.  Work
  12:00 p.m. to 12:40 p.m.  Lunch
  12:40 p.m. to 4:40 p.m.  Work
Saturday: 7:50 a.m. to 12:50 p.m.  Work
Total:  45 hours 50 minutes per week.    

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Overtime

For the months of June and July 2006, workers report working until 7:30 p.m. every weekday, meaning that they were working 2 hours and 20 minutes of overtime a day. About every two weeks, they report having to work later, until 11:30 p.m. or 12:30 a.m. Some workers in the sewing line report having to work until 4:30 p.m. on Saturdays, an extra 3 hours and 40 minutes of overtime. However, workers report that in the ironing, packing and inspection departments, some workers were working until 7:00 p.m. on Saturdays and on Sundays, adding an extra 11 hours of Sunday overtime.

This means that, for the months of June and July, the workers were working at least 11 hours and 40 minutes of overtime a week (2 hours and 20 minutes, five days a week) and at most 29 hours and 20 minutes of overtime a week (an extra 6 hours and 20 minutes on Saturday and Sunday, and one weekday of working until 12:30 a.m.).

Pay stubs, however, seem to reveal workers working only about 10 hours a week of overtime. Workers explained to us:

The pay stubs don't reflect the truth. They put [a fake number of hours] so that the monitors don't find out the real overtime hours we work. Once, when production was especially busy, I worked 70 hours of overtime in two weeks (35 hours a week). I signed as having worked only 33 hours for those two weeks, and then signed for the extra overtime on a separate company document.

That extra overtime is still recorded on the pay stub, but is hidden in different area. Here is an example:

 

The number of overtime hours officially reported is in the "Horas Extras" box. Therefore, this worker has supposedly worked 20 hours of overtime over the course of two weeks, or about 10 hours of overtime a week. However, workers explained to us that the pay for the extra hours of overtime is reflected in the "Prod/Exp" box. This pay stub shows the worker was paid an extra 90.01 Quetzals for overtime. The reported overtime was paid that month at 8.8125 Quetzals/hour (163.65 Quetzals divided by 20 hours). Assuming the hidden overtime was paid correctly, then, this worker worked at least an extra 10 hours over two weeks, meaning that this person worked at least 15 hours a week of overtime.

Another worker describes a similar situation:

The document where they sign for the overtime is in a folder with sheets with the names of all the workers on the production line. On one sheet, you sign that you started working at 7:50 a.m. and that you got out at 6:30 p.m. When you work after 6:30, you sign another sheet. This last one they hide when the auditors come to the factory.

Workers also complain that overtime is not always paid correctly. If a worker is working overtime because he or she has failed to meet their high production quotas, the company will not pay the overtime correctly. One worker explained, "When we ask them why they didn't pay the overtime correctly, they answer that it was paid correctly, but that we didn't pay attention to the numbers, or else they tell us that our obligation is to finish our production goal at 4:40 p.m., so the company has no obligation to pay us for the work we didn't finish during our shift."
 
Furthermore, the company doesn't pay overtime   correctly for the hours worked on national holidays, let alone give workers the days off. For example, workers are supposed to get Thursday, Friday and Saturday off for Holy Week, i.e. Easter. However, one worker told us, "During the Holy Week we worked Holy Thursday until 7:30 p.m. and they paid us [as though it were] an ordinary day."

Overtime is forced. Those workers who cannot, for any reason, work overtime, are fined 50 Quetzals, or $6.56, and receive a warning on which "you have to sign with your name, code and line." "It's not fair," a worker told us, "If you can't work overtime, it is only because there is an emergency at home or the children are sick." Another worker explained, "If you get three warnings you're fired without anything — without a penny, without any right to anything."

When workers tell their supervisors they are unable to work overtime, the supervisors answer, "If you don't need to work, go home. There're a bunch of people outside who need work."

Another worker spoke about working overtime on the weekends.  In the ironing, packing and inspection departments, "We sometimes work all Saturday and Sunday until 7:00 p.m. Except for lunch, we don't get any breaks."

Another worker explained, "We stay working all the time. We have to buy food if we're hungry, they only give us coffee, they don't even give us water. We work all weekend once a month, at least."

In 2005, the workers remember one week in which they had to work on a Thursday until midnight and then be back in the factory at 7:50 on Friday morning and work straight through until 11:00 p.m.

When the workers work late, the factory arranges a special bus to take the workers home. Unfortunately, the buses do not drop the workers off at home, but rather several blocks away. The workers have said that Chimaltenango is an extremely dangerous area with a lot of street crime and gang activity. One worker explained "I was robbed once after working until 8:30 p.m. one block from my house. The area is really dangerous." Back to the top 

Corruption at Dong Bang

The factory was originally called Dong Bang Fashions. However, in order to keep its tax-exempt status, the factory recently renamed itself Dong Bang Industrial S.A. Howver, the factory kept all its workers, supervisors and equipment.

When the factory changed its name it forced all the workers to sign a "voluntary" letter of resignation and then sign a new contract with Dong Bang Industrial S.A. as new workers. Workers were told "if you don't voluntarily sign the letter of resignation you risk losing your job and not finding another one in this area."

Workers who resigned were given some compensation, less than a month's wages, however it was far short of what they were entitled to. However, every worker is entitled to one month's pay for every year they've worked. Workers who had worked for ten years, then, were cheated out of 3/4 of a year's pay. Furthermore, now that they have signed on as new workers, they have forfeited their right to that pay should Dong Bang Industrial S.A. ever fire them or shut down.

When I started working at Dong Bang I was a minor. I used a friend's fake ID.When I met the chief of personnel I told him that I was not going to resign because I had work for 4 years there and I needed my severance. You know what he told me? "Ok if you don't resign we can send you to jail because we know you were using a false ID. We have it on file. So you decide."

Three hundred workers complained and filed legal precedings, with the help of CEADEL and other human rights organizations in Guatemala. The company conceded and paid them the severance they were owed.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Labels and Production Goals

The workers report sewing clothing for Sag Harbor (owned by the Kellwood Corporation), Studio 1940 (manufactured by Carole Wren, Inc.), George ME (a Wal-Mart label designed by Mark Eisen), East 5th (a JC Penny label) and Chadwick's (a Redcats USA brand). There are two plants at Dong Bang Industrial S.A., each with about 50% of the workers.

All of the labels below were smuggled out of the factory in July of 2006.

Sag Harbor

 

 

  

 

There are four production lines at Plant 1 sewing clothing for Sag Harbor. In July the workers described sewing a skirt in a color called "corinto" which the workers describe as being a "cardinal" color, i.e. red.  

 

In August the workers describe sewing pants for women in black and grey with pockets and elastic waists.

The goals for the Sag Harbor pants is 2,000 per shift. A worker told us their supervisors wanted "a minimum of 200 per hour." Sometimes, workers are asked to sew 2,220 to 2,300 per shift.

"Sometimes we reach the goals but it is very tiring, because at 5 o'clock you are very tired from sitting and your lungs hurt from sewing for such a long time." Workers say that, for sewing pants, there are usually 45-48 workers per production line in Plant 1. Assuming that 45 workers sewed 2,000 pairs of pants in a typical 8 hour shift, the workers would be making 1.53 Quetzals, or $0.20 per pair of pants (2,000 pants / 45 workers = 44.44 pairs of pants per worker; in an eight hour shift, workers earn about 68 Quetzals / 44.44 pairs of pants = 1.53 Quetzals)

At most, even if we include the overtime that workers undoubtedly devoted to these high production goals, especially as the workers personally stated that they worked an extra 2 hours and 20 minutes every day, and assumed the overtime to be paid accurately, the workers would still only be making 1.96 Quetzals, or 26 cents per pair of pants. When there are more workers on the production line or higher production goals, workers earn even less per piece sewn.

One worker described a meeting with the supervisors in which workers were told "that if we were tired at 5:30 or 6:30, he could take us to the office and ask them to pay us only 4 Quetzals an hour." Another worker told us, "It's not fair, because all day long we do what is possible for us, and there are a lot of people who don't even go to the bathroom because there's too much pressure to work and to be on good terms with the supervisors. But I think, if you work harder, the supervisors just demand more and more. That's not fair."

The workers also describe sewing jackets for women in red, pink and light blue.

The jackets are very difficult to make. Some of the jackets are lined on the inside. Then they ask us to make 600 or 700 [per shift]. That's the maximum we can produce. It's tiring. There are some jackets that are simpler, but they ask us to make 1,000 or 1,100. It's very tiring to reach these goals, especially with the pressure of the supervisors checking the production constantly.

The workers explained to us that a typical production line sewing jackets would have between 50 and 55 workers. Assuming there are 50 workers on a line and all the workers work a typical day with regular overtime, these workers are earning at most 7.26 Quetzals, or $0.95 to sew a jacket that is difficult to sew and 3.96 Quetzals, or $0.52 for a relatively simple jacket.

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Studio 1940

 

 

 

In August 2006, two production lines were sewing Studio 1940 jackets for women in black and dark grey in Plant 1.  One production line (Line#5) in Plant 2 was sewing Studio 1940 men's black pants.

The workers explained, "the owner of this product is called Mariana. She comes sometimes to the factory. She's tall, dark-skinned and big."

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George ME

 

 

In May and June workers were sewing George ME (designed by Mark Eisen for Wal-Mart) women's pants in three lines in Plants 1 and 2. The pants were made of a checked black cloth with lining. Workers were told to make 1,400 pants per shift. Again, if we assume there are 45 workers in a production line, and the workers are working 2 hours and 20 minutes of overtime with correct overtime pay, these workers are only making 2.8 Quetzals, or $0.37 per pair of pants sewn. Workers describe the pants as "difficult to sew."

The same production lines were also sewing capris, which the workers describe as "fishing pants." They came in pink and white or light blue and white. The production goals for these were 1,800 per shift. This would equal 2.18 Quetzals, or $0.29 per pair of pants.

In August, Line #6 in Plant 2 was sewing men's black pants.

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East 5th

 

 

In August, two production lines in Plant 1 were sewing clothing for East 5th. Workers describe sewing jackets for men and women of a "brown wine" color.

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Chadwicks

 

 

Three production lines in Plant 2 were sewing clothing for Chadwicks. Back to the top 

 

 

 

 

 

 


 

Company Codes of Conduct

The following are quotes from various interviews with workers. These explain clearly that voluntary codes of conduct are unknown to many workers and completely ineffectual.

I understand that the code of conduct means I shouldn't say bad words and I shouldn't say things that could offend other workers. That's what I've been told.

We don't know if there are codes of conduct on the walls. Near the exit there's a wall full of papers, but we don't have time to read it. We're always in a hurry. Even when we get out early we don't have time.

I know that Sag Harbor has  code of conduct. I've read it. It says that workers must arrive early. Also, that we shouldn't be forced to work overtime and that we have to have a clean working environment.

When asked about codes of conduct, one worker responded: As for that kind of stuff, about a month ago, the supervisors distributed a sheet [about how we shouldn't] say abusive things to women.

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Corporate Monitoring

No, the workers have never received an explanation about the codes of conduct. The supervisors just scold us and tell us to lie when the auditors arrive. They only call us [into meetings] for that or to tell us that we should cooperate with the companies and to tell them what our supervisors want us to. They say that if we tell the truth, it could work against the company.

Those auditors from Sag Harbor, when they arrive we have to tell them what the supervisors tell us to tell them. [The supervisors say] 'You have to say this and that, don't tell them how much overtime you work.' We agree because we need these jobs.

According to workers, Sag Harbor once suspended  production in the factory because workers were working excessive overtime hours. The situation was discovered in the course of an audit. Production was cut for a month and a half.

Here in the factory we are forced to tell lies to the clients. I remember once that a client wanted to produce a coat, a very big and heavy coat, but the client didn't want us to work overtime. We worked overtime anyways and the factory didn't tell the client. What is rotting Dong Bang are the supervisors. The majority mistreat the workers and just do what they want with us. The clients don't know because we are forced to lie to them.

I've never been interviewed by an auditor, but the supervisors told us to say that we don't work late. When the auditors come to the factory, management puts out water for drinking, toilet paper, soap, everything, but when they're gone everything returns to the same.

The supervisors told us once that some workers dared to tell the truth"so the factory lost a client. The supervisors say they don't understand how they could have been so stupid as to speak against their own jobs.

Single mothers are especially afraid to tell the truth because they could lose their jobs. There are also some older workers, maybe 40 years old, who wouldn't find a job anywhere else if they were fired for telling the truth.

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Workers' Demands

  • Workers deserve to be treated with respect, not shouted at or insulted by supervisors. Workers feel that the increased pace and pressure of production is causing them to make more mistakes than they otherwise would.
  • The factory needs to supply workers with clean drinking water.
  • Workers need to know how their overtime is paid. The pay stubs are confusing and misleading. All the overtime hours worked need to be stated clearly on each and every pay stub. Workers just want to be paid fairly for the time they work.
  • Overtime must be voluntary. Workers generally will agree to work overtime, however the overtime cannot be coerced with threat of fines or warnings.
  • Workers need at least one break (aside from lunch) during each shift.
  • Supervisors need to allow workers to go the restroom without being timed or fined.
  • The on-site clinic needs to be stocked with basic medications at reasonable prices.

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Company Contact Information

Kellwood Corporation

600 Kellwood Parkway
Chesterfield, MO  63017
(314) 576-3100

 

Website: www.kellwood.com President/CEO: Robert C. Skinner, Jr.
Email: Bob_Skinner@kellwood.com

 

Sag Harbor

1407 Broadway, Suite 605
New York, NY 10018
Phone: 212-391-8666
Toll Free: 1-866-SAG-HARBOR
Fax: 212-730-2040
Website:
www.sag-harbor.com
Email:
info@sag-harbor.com.
President: Fran Boland

Wal-Mart

702 SW Eighth Street
Bentonville, AR 72716
Phone: 479-273-4000
Fax: 479-273-4053
Web Site: http://www.walmartstores.com

 

CEO: H. Lee Scott

George ME
Carole Wren Inc. (Studio 1940)

 

3000 47th Ave
Long Island City, NY 11101
Phone: (718) 552-3800
Website: www.carolewren.com
Chairman of the Board: Martin J. Leff
Email: jleff@carolewren.com  

JC Penney Company Inc (East 5th)

6501 Legacy Drive
Plano, TX 75024
Phone: (972) 431-1000
Fax: (972) 431-1362
Web Site: http://www.jcpenney.com/

CEO: Myron E. Ullman III

 

Redcats USA Brands

463 Seventh Avenue
New York, NY 10018
(212)613-9500
Website: http://www.RedcatsUSA.com

 

Chadwicks

35 United Drive
West Bridgewater, MA 02379
Website: www.chadwicks.com

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Pay Stubs