Handout 1a: Working Conditions in Sports Shoe Factories in China
Making Shoes for Nike and Reebok
Asia Monitor Resource Centre and Hong Kong Christian Industrial Committee
September 1st, 1997
http://www.corpwatch.org/print_article.php?&id=3031
Introduction
The last 30 years have seen tremendous changes in the production of sports shoes. When the
costs of production began to rise in the United States and Europe, and workers organised and
exercised collective bargaining power, sports shoe companies relocated their factories or sought
subcontractors in Asia where wages were much lower and where systematic repression of labour
movements promised a 'docile' workforce. Companies like Nike and Reebok began to subcontract
to medium and small-scale companies in East Asia, particularly Taiwan and South Korea.
It is no accident that these two countries became the world's two largest shoe manufacturing
countries at a time when political authoritarianism and repression of the workers' movement was at
its height. However, once the independent labour movements began to gain strength, and workers
successfully fought for higher wages and better working conditions, sports shoe production once
again shifted overseas, this time moving to countries with still cheaper labour costs, such as
Vietnam, Thailand, Indonesia and China. In these countries sports shoe multinationals made
mega-profits by exploiting the massive gap between production costs (particularly labour costs)
and the prices at which the shoes could be sold in the European and North American markets.
Ironically, different brands of sports shoes are often produced in the same factory, side by side,
despite ruthless market competition and the hundreds of millions of dollars spent on advertising in
the United States and Europe.
Before the arrival of these sports shoe multinationals in China, the shoe industry was based on
state-owned enterprises producing for the domestic market. However, since the 'opening up' of the
economy after 1984, there was an influx of Hong Kong and Taiwanese capital into labour-intensive
industries such as sports shoes. Hong Kong and Taiwanese companies established new factories
in China, which often meant the partial or complete closure of factories back home. Some of these
new investors in China formed joint ventures with state-owned enterprises or local governments,
while others set up 100 percent foreign-owned factories.
China is now the biggest shoe producing country in the world, producing over one-third of the
world's top brand-name sports shoes. In many ways it is an ideal setting for the sports shoe
multinationals and their subcontractors. Massive unemployment, low wages, the lack of
enforcement of labour laws and standards, repression of independent union organising, and the
role of the state-run All China Federation of Trade Unions in supporting management, are
combined with local governments whose policies and interests lie in attracting foreign capital and
ensuring the best conditions for the accumulation of profit.
Companies like Nike and Reebok benefit in every way because they do not have to deal with
production: they distance themselves through subcontracting, benefiting from low production costs
without any direct lines of responsibility. Subcontracting also allows these sports shoe
1
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
multinationals to respond quickly to changing styles and fashions, while passing on all of the
uncertainty and insecurity to their subcontractors and ultimately to the workers themselves.
With little or no notice, the multinationals can change the order and demand a different style of
shoe, forcing the subcontractor to make rapid changes in their production set-up. Everything must
be done very quickly, forcing the workers to work hard and fast, and to put in excessive amounts of
overtime if they want to keep their jobs.
Poor conditions in the factory are not simply the result of having a particularly harsh factory owner.
It is actually the multinationals, not the subcontractors, that ultimately set the pace of production as
well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the
timeline set by the multinational and accept the price the multinational is willing to pay per shoe.
And when the multinationals squeeze the subcontrators, the subcontractors squeeze the workers.
Just this year, Andrew Young from Goodworks International was hired by Nike to monitor their
factories in Vietnam, Indonesia and China. Mr. Young produced a report which backed Nike,
stating that the company was doing a good job and giving a few recommendations as to how it
could improve. Mr. Young himself, however, admitted that he had a hard time approaching
ordinary workers. As a result, his report was shallow and lacked credibility. This report is an
attempt to provide a more true-to-life picture of the conditions for shoe workers in China. (*
Handout 2 addresses Andrew Young’s report)
Both Nike and Reebok argue that conditions in the factories have improved and that the Codes of
Conduct that regulate their behavior are being enforced. This study proves, however, that this is
not the case. In fact, compared with our research on the shoe factories in 1995, conditions today
are even worse. This is especially true of work hours -the number of hours that workers are forced
to work has actually increased in the past few years. All categories of the companies' Codes of
Conduct- health and safety, freedom of association, wages and benefits, hours of work, overtime
compensation, nondiscrimination, harassment and child laborer are being violated.
Moreover, most workers do not even know that there is a Code of Conduct which the factory is
supposed to abide by. They are unaware of their rights as workers and have no ways to channel
their complaints and opinions. The strikes and demonstrations in the shoe factories throughout
Asia are a reflection of these pent-up grievances. It is clear that in the case of Nike and Reebok,
their internal monitoring systems have failed miserably.
China presents a particularly difficult situation to monitor due to the prevailing political system and
the absence of independent non-governmental organizations, such as independent trade unions
and human rights organizations. There is only one recognised union in China, The All China
Federation of Trade Unions (ACFTU), and it rarely confronts management to uphold workers
rights. ACFTU is a government-controlled union, and since local governments are intimately
involved in local businesses, union officers tend to favor managers over workers.
There are no authentic independent non-governmental organisations or trades unions and any
attempts at genuine union organising are harshly repressed. In Shenzhen, two independent trade
unionists were charged with subversion in July 1996 because they had disseminated pamphlets on
workers' rights. This repression of independent organizing sends a signal to management that
China's Labour Law and its regulations will not be enforced and that workers' rights do not have to
be respected. It is clear that in this context, management has absolute power. It is also clear that in
this context, monitoring systems as they presently exist are virtually unworkable.
2
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Research Methodology and Limitations
This report was produced by two non-governmental organizations in Hong Kong: the Asia Monitor
Resource Centre and the Hong Kong Christian Industrial Committee. During 1995 and again in
1997, we examined workers' rights and working conditions in the factories of five major
subcontractors producing sports shoes in China: Yue Yuen, Nority International, KTP Holdings and
Wellco. These factories produce shoes for Nike and Reebok. The first two are Taiwanese
companies with factories in southern China, while KTP Holdings is a Hong Kong-based company
and Wellco is a South Korean-owned company.
All the factories are located in Pearl River Delta in southern China. Most workers in the Pearl River
Delta are peasant workers (mingong) who come from rural areas of other provinces, and 90
percent of them are women age 17 to 23.
While we have monitored conditions in the shoe factories over the past three years, our latest
research was conducted in June and July 1997. We conducted detailed interviews with 10 workers
in each factory, held discussions with dozens of other workers, and included our own observations.
Here we present our findings.
Interviews with workers
Before presenting the case studies, it is important to put the interviews with workers in these
factories in context. The shoe workers, most of whom are recent migrants to the city, generally
have a low level of education. These jobs are usually their first factory jobs and they are unaware
of their legal rights as workers.
For example, workers often had a difficult time answering questions about overtime because it is
hard for them to distinguish between a "normal work day" and overtime. When hired, the workers
were told they had to work 12 hours a day. According to the Chinese Labour Law, the work day
should only be eight hours long, and the four extra hours of work should be counted as overtime.
However, the factories set the "normal" work day as 12 hours, and then add additional overtime
work. Therefore, if a worker works a 15-hour day, she will usually say she worked three hours of
overtime, when she really worked seven overtime hours.
Also, it is important to take into account that the interviews were conducted in June and early July,
which workers told us are generally not peak season in the shoe factories. This means that while
the work shifts reported here are already grueling, it is probable that during other months, when
there is more work to be done, the workers work even longer hours and are given even fewer days
off per month.
With respect to wages, one of the difficulties we encountered is that some workers are paid a set
rate, while others are paid piece rate. Moreover, most workers are not even given their pay stubs,
making it difficult for them to understand what hours they were paid and at what rate.
Several of the questions we asked refer to health and safety issues in the workplace. Most workers
felt they did not need any protective clothing. However, it is important to understand that the
workers may not be aware that they need protective clothing. They are accustomed to working
without such things as gloves and face masks.
3
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Many workers did not consider the chemicals in their factories to be hazardous, but this is often a
reflection of their lack of understanding about health and safety issues. One chemical, benzene,
which is used in China as a glue in making sports shoes, can cause anemia and leukemia and is
so toxic that it has been banned in the United States and many European countries. But the
factories do not inform the workers of the contents of poisonous substances, so workers have no
way of knowing the degree of harm done to their bodies.
Another issue we questioned workers about is whether they were forced to pay a deposit upon
being hired at the factory, which is not legal. Many workers answered that they did not pay a
deposit. However, in most cases, workers were simply not paid for the first month of work, which
amounts to a deposit. Though the factory promises that these deposits will at some point be
returned to them, this is often not the case. Workers also answered that they were allowed to make
complaints to supervisors or a complaints box, but most workers have never made complaints
themselves because they are afraid of the consequences.
The workers had minimal knowledge of trade unions and collective bargaining. Factories either
have no union or the government-controlled trade union (ACFTU), as independent unions are not
allowed. When an ACFTU branch did exist at a factory, it did so little for the workers that many
were unaware of its presence.
Finally, we must add in the element of fear and mistrust. Even though the interviewers were careful
to explain what the questionnaires were all about, many workers were afraid and distrustful of
people who came to ask so many questions. As difficult as their jobs are, the workers do not want
to lose them and logically feared that giving information about factory conditions might put them at
risk of being fired.
Wellco Factory, A Nike Subcontractor
Wellco Factory, in Dongguan, Chang'an is a Korean-invested factory contracted by Nike. Eight
thousand workers are employed there, though most of these workers have not signed any contract
with the factory, or do not know if they have. The ratio of women to men is seven to one. Most are
migrant workers coming from all over China. The men and women do some of the same jobs,
though in the sewing department, all the workers are women. They are all very young, between 18
and 25, and many have been employed at the factory for just a few months.
The workers work 11 hours a day, in violation of both Chinese labour law and the Nike Code of
Conduct.1 In addition to this arduous schedule, all must work overtime. If they refuse they can be
fined $1.20 - $3.61(10-30Rmb) or docked the entire day's pay. Several of the workers mentioned
that they did not realise that they would be forced to work overtime when they were hired. The
overtime of 2-4 hours (on top of the 11 hour work day) violates China's Labour Law, which allows
for only 36 hours of overtime per month. The Labour Law and Nike's Code of Conduct both clearly
state that coerced labour is not acceptable, yet workers in Wellco are forced to work long hours or
they will be subject to termination.
Workers only get 2-4 days off every month. This violates both China's Labour Law and Nike's
Code, which states that workers are entitled to at least one day of rest every week. After working at
4
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
the factory for one year, workers are given an annual leave of five days, and after two years this
becomes seven days.
The workers are given a quota to complete in the working day. However, the quota is very harsh,
and often cannot be fulfilled in a day's work. When this happens, the worker must participate in
"prolonged work" for which there is no pay.
The wages at the Wellco factory violate minimum wage laws. Generally the workers are given $30$42 (250-350 Rmb) per month before overtime, while the minimum wage in Dongguan state is $42
(350Rmb) per month. Overtime is also paid in violation of the law. Minimum overtime pay is $0.36
(2.99Rmb) per hour of overtime, but Wellco workers make $0.19-$0.33 (1.6-2.7Rmb) per hour of
overtime. After all the deductions are made for housing, meals and other items, one month's pay-including overtime--becomes only $36.14-$72.29 (300 to 600Rmb).
The workers were unclear about the safety regulations in their workplace, and whether or not the
factory abided by the standards set by law. The fire prevention and safety equipment in the factory
seem up to standard: there are extinguishers, exits and fire drills. Many of the workers thought that
they needed safety equipment. Gloves and masks are provided to some workers but not all,
leaving many without protection.
Many workers noted that there have been a variety of accidents at the factory. Seven workers lost
their fingers in the machines, many workers fainted due to heat and fumes, and we were told that
one worker in the factory had died from inhaling poisonous chemicals. Several of the workers
complained of dizziness, skin irritations, headaches and dyspnea and said that their co-workers
also have these problems. Many workers felt that the managers did not care about their safety;
they were simply interested in "churning out shoes".
The working conditions at the factory appear dangerous to the health of the workers. There is dust
in the workplace which the workers rate "serious" and must inhale everyday. There is noise
pollution, heat and congestion in the factory, and there are fumes from the glues used. Nike's Code
of Conduct states that employers should provide a "safe and healthy working environment to
prevent accidents and injury to health arising out of... the operation of employer facilities." Clearly
this section of the Code is not enforced.
When the workers were first hired, they had to pay a deposit. However, many of them
misunderstood this when they were being hired, and now realise that it is very difficult to reclaim
this deposit. They must wait one year or until they leave the factory, and in this case, they must
leave under favourable conditions.
While working, the workers are not allowed to talk to their co-workers, and if they disobey this rule,
they are warned and then fined $1.20-$3.61 (10-30Rmb). Most of the workers interviewed said that
they had been yelled at by their supervisors, and said that as punishment, the workers'
identification cards can be confiscated.
Several workers recalled incidents of corporal abuse, but more common is punishment through
fines. There was one case of a worker being fired because she had stayed up working overtime
until 3am and then did not come to work the next day. There were other examples of dismissals
5
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
without cause, such as workers fired for being "too old" (i.e. over 25) or for becoming pregnant. In
the Chinese Labour Law, women are supposed to be protected in such circumstances. They are to
be treated well when they are pregnant and given maternity leave. None of this is done in Wellco.
Instead, pregnant women are treated with disrespect and are unjustly terminated.
Most of the workers at Wellco factory did not know that there was a Code of Conduct which the
factory should be using. Several workers said they had heard of the Code, but that the factory
simply didn't enforce it. We were told that when visitors come to inspect the factory, the workers
and the supervisors are told in advance so that the factory is swept clean, and that if workers are
interviewed, it is always in the presence of management.
Nike's Code says that workers should have the right to organise. However, the factory has no trade
union, and although workers are allowed to make complaints to their supervisor, most worry about
losing their jobs if they complain. In one case the supervisor was fired after a complaint against him
was made, but in most cases, workers who complain are fired. Many workers feel that the factory
does not think their rights are important.
There have been many wildcat strikes at the factory in the past two years. Usually, the workers
strike because the factory did not pay them or because of the grueling work hours. In March 1997,
the assembly production department went on strike because the factory did not pay them their
wages. All the workers who went on strike were fired. In another instance, eight workers in the
quality control department became angry with their supervisor and went on strike, but they, too,
were fired. In 1996 the cutting department went on strike because of low wages, but when they
requested a raise, management refused. Other reasons for striking in the past included long
working hours and poor quality of food. On Chinese New Year this year, the factory gave workers
only half their wage and they went on strike until management agreed to pay the full wage.
According to several workers, the factory employs children ages 13-15 in the sewing, handwork
and cutting departments. This is a clear violation of China's Labour Law, which says no child under
16 is to be employed, and Nike insists it will not employ children under 15.
6
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Handout 1b: Working Conditions in Sports Shoe Factories in China
Making Shoes for Nike and Reebok
Asia Monitor Resource Centre and Hong Kong Christian Industrial Committee
September 1st, 1997
http://www.corpwatch.org/print_article.php?&id=3031
Introduction
The last 30 years have seen tremendous changes in the production of sports shoes. When the
costs of production began to rise in the United States and Europe, and workers organised and
exercised collective bargaining power, sports shoe companies relocated their factories or sought
subcontractors in Asia where wages were much lower and where systematic repression of labour
movements promised a 'docile' workforce. Companies like Nike and Reebok began to subcontract
to medium and small-scale companies in East Asia, particularly Taiwan and South Korea.
It is no accident that these two countries became the world's two largest shoe manufacturing
countries at a time when political authoritarianism and repression of the workers' movement was at
its height. However, once the independent labour movements began to gain strength, and workers
successfully fought for higher wages and better working conditions, sports shoe production once
again shifted overseas, this time moving to countries with still cheaper labour costs, such as
Vietnam, Thailand, Indonesia and China. In these countries sports shoe multinationals made
mega-profits by exploiting the massive gap between production costs (particularly labour costs)
and the prices at which the shoes could be sold in the European and North American markets.
Ironically, different brands of sports shoes are often produced in the same factory, side by side,
despite ruthless market competition and the hundreds of millions of dollars spent on advertising in
the United States and Europe.
Before the arrival of these sports shoe multinationals in China, the shoe industry was based on
state-owned enterprises producing for the domestic market. However, since the 'opening up' of the
economy after 1984, there was an influx of Hong Kong and Taiwanese capital into labour-intensive
industries such as sports shoes. Hong Kong and Taiwanese companies established new factories
in China, which often meant the partial or complete closure of factories back home. Some of these
new investors in China formed joint ventures with state-owned enterprises or local governments,
while others set up 100 percent foreign-owned factories.
China is now the biggest shoe producing country in the world, producing over one-third of the
world's top brand-name sports shoes. In many ways it is an ideal setting for the sports shoe
multinationals and their subcontractors. Massive unemployment, low wages, the lack of
enforcement of labour laws and standards, repression of independent union organising, and the
role of the state-run All China Federation of Trade Unions in supporting management, are
combined with local governments whose policies and interests lie in attracting foreign capital and
ensuring the best conditions for the accumulation of profit.
Companies like Nike and Reebok benefit in every way because they do not have to deal with
production: they distance themselves through subcontracting, benefiting from low production costs
without any direct lines of responsibility. Subcontracting also allows these sports shoe
7
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
multinationals to respond quickly to changing styles and fashions, while passing on all of the
uncertainty and insecurity to their subcontractors and ultimately to the workers themselves.
With little or no notice, the multinationals can change the order and demand a different style of
shoe, forcing the subcontractor to make rapid changes in their production set-up. Everything must
be done very quickly, forcing the workers to work hard and fast, and to put in excessive amounts of
overtime if they want to keep their jobs.
Poor conditions in the factory are not simply the result of having a particularly harsh factory owner.
It is actually the multinationals, not the subcontractors, that ultimately set the pace of production as
well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the
timeline set by the multinational and accept the price the multinational is willing to pay per shoe.
And when the multinationals squeeze the subcontrators, the subcontractors squeeze the workers.
Just this year, Andrew Young from Goodworks International was hired by Nike to monitor their
factories in Vietnam, Indonesia and China. Mr. Young produced a report which backed Nike,
stating that the company was doing a good job and giving a few recommendations as to how it
could improve. Mr. Young himself, however, admitted that he had a hard time approaching
ordinary workers. As a result, his report was shallow and lacked credibility. This report is an
attempt to provide a more true-to-life picture of the conditions for shoe workers in China.
Both Nike and Reebok argue that conditions in the factories have improved and that the Codes of
Conduct that regulate their behavior are being enforced. This study proves, however, that this is
not the case. In fact, compared with our research on the shoe factories in 1995, conditions today
are even worse. This is especially true of work hours -the number of hours that workers are forced
to work has actually increased in the past few years. All categories of the companies' Codes of
Conduct- health and safety, freedom of association, wages and benefits, hours of work, overtime
compensation, nondiscrimination, harassment and child laborer are being violated.
Moreover, most workers do not even know that there is a Code of Conduct which the factory is
supposed to abide by. They are unaware of their rights as workers and have no ways to channel
their complaints and opinions. The strikes and demonstrations in the shoe factories throughout
Asia are a reflection of these pent-up grievances. It is clear that in the case of Nike and Reebok,
their internal monitoring systems have failed miserably.
China presents a particularly difficult situation to monitor due to the prevailing political system and
the absence of independent non-governmental organizations, such as independent trade unions
and human rights organizations. There is only one recognised union in China, The All China
Federation of Trade Unions (ACFTU), and it rarely confronts management to uphold workers
rights. ACFTU is a government-controlled union, and since local governments are intimately
involved in local businesses, union officers tend to favor managers over workers.
There are no authentic independent non-governmental organisations or trades unions and any
attempts at genuine union organising are harshly repressed. In Shenzhen, two independent trade
unionists were charged with subversion in July 1996 because they had disseminated pamphlets on
workers' rights. This repression of independent organizing sends a signal to management that
China's Labour Law and its regulations will not be enforced and that workers' rights do not have to
be respected. It is clear that in this context, management has absolute power. It is also clear that in
this context, monitoring systems as they presently exist are virtually unworkable.
8
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Research Methodology and Limitations
This report was produced by two non-governmental organizations in Hong Kong: the Asia Monitor
Resource Centre and the Hong Kong Christian Industrial Committee. During 1995 and again in
1997, we examined workers' rights and working conditions in the factories of five major
subcontractors producing sports shoes in China: Yue Yuen, Nority International, KTP Holdings and
Wellco. These factories produce shoes for Nike and Reebok. The first two are Taiwanese
companies with factories in southern China, while KTP Holdings is a Hong Kong-based company
and Wellco is a South Korean-owned company.
All the factories are located in Pearl River Delta in southern China. Most workers in the Pearl River
Delta are peasant workers (mingong) who come from rural areas of other provinces, and 90
percent of them are women age 17 to 23.
While we have monitored conditions in the shoe factories over the past three years, our latest
research was conducted in June and July 1997. We conducted detailed interviews with 10 workers
in each factory, held discussions with dozens of other workers, and included our own observations.
Here we present our findings.
Interviews with workers
Before presenting the case studies, it is important to put the interviews with workers in these
factories in context. The shoe workers, most of whom are recent migrants to the city, generally
have a low level of education. These jobs are usually their first factory jobs and they are unaware
of their legal rights as workers.
For example, workers often had a difficult time answering questions about overtime because it is
hard for them to distinguish between a "normal work day" and overtime. When hired, the workers
were told they had to work 12 hours a day. According to the Chinese Labour Law, the work day
should only be eight hours long, and the four extra hours of work should be counted as overtime.
However, the factories set the "normal" work day as 12 hours, and then add additional overtime
work. Therefore, if a worker works a 15-hour day, she will usually say she worked three hours of
overtime, when she really worked seven overtime hours.
Also, it is important to take into account that the interviews were conducted in June and early July,
which workers told us are generally not peak season in the shoe factories. This means that while
the work shifts reported here are already grueling, it is probable that during other months, when
there is more work to be done, the workers work even longer hours and are given even fewer days
off per month.
With respect to wages, one of the difficulties we encountered is that some workers are paid a set
rate, while others are paid piece rate. Moreover, most workers are not even given their pay stubs,
making it difficult for them to understand what hours they were paid and at what rate.
Several of the questions we asked refer to health and safety issues in the workplace. Most workers
felt they did not need any protective clothing. However, it is important to understand that the
workers may not be aware that they need protective clothing. They are accustomed to working
without such things as gloves and face masks.
9
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Many workers did not consider the chemicals in their factories to be hazardous, but this is often a
reflection of their lack of understanding about health and safety issues. One chemical, benzene,
which is used in China as a glue in making sports shoes, can cause anemia and leukemia and is
so toxic that it has been banned in the United States and many European countries. But the
factories do not inform the workers of the contents of poisonous substances, so workers have no
way of knowing the degree of harm done to their bodies.
Another issue we questioned workers about is whether they were forced to pay a deposit upon
being hired at the factory, which is not legal. Many workers answered that they did not pay a
deposit. However, in most cases, workers were simply not paid for the first month of work, which
amounts to a deposit. Though the factory promises that these deposits will at some point be
returned to them, this is often not the case. Workers also answered that they were allowed to make
complaints to supervisors or a complaints box, but most workers have never made complaints
themselves because they are afraid of the consequences.
The workers had minimal knowledge of trade unions and collective bargaining. Factories either
have no union or the government-controlled trade union (ACFTU), as independent unions are not
allowed. When an ACFTU branch did exist at a factory, it did so little for the workers that many
were unaware of its presence.
Finally, we must add in the element of fear and mistrust. Even though the interviewers were careful
to explain what the questionnaires were all about, many workers were afraid and distrustful of
people who came to ask so many questions. As difficult as their jobs are, the workers do not want
to lose them and logically feared that giving information about factory conditions might put them at
risk of being fired.
Nority International Group Ltd., A Reebok Subcontractor
Nority Shoe Factory is located in Dongguan, Chang'an County and employs 6,000-7,000 workers,
most of whom are women. The factory is Taiwanese-owned and produces shoes for Reebok. We
first investigated this factory in our 1995 study and found violations in wages, health and safety
conditions. The present study reveals that few improvements have been made.
Reebok's Code of Conduct states that workers are not required to work more than a 60-hour week,
and China's Labour Law stipulates a maximum of 44-hours, and overtime should be limited to one
hour per day. At Nority, however, the normal work week, not including overtime, is 12 hours a day,
six days a week, or 72 hours a week. The work is divided into three shifts: 8am-11:30am, 12:30pm4:30pm, and 5:30pm-10pm. Without even considering overtime, this work schedule is in violation
of both the Reebok Code and China's Labour Law.
On top of this grueling 12-hour schedule, workers are often forced to work an additional 2-5 hours
of overtime. Refusal to work overtime could result in a fine of $7.23 to $21.67 (60 to 180Rmb), and
a worker who refuses to work overtime three days in a row will be fired. Reebok's Code makes it
clear that workers should have the freedom to choose whether they want to work overtime, as
does China's Labour Law. Compulsory overtime at Nority is therefore a gross violation of both
Reebok's Code of Conduct and the Chinese Labour Law.
10
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Aside from long working hours, the work is also very stressful. Workers are given a quota to fulfill.
Most say they are unable to fulfill their quota during work hours, and therefore they have to stay
behind and work without pay.
Some workers said they were given four days off every month, while others said they only got one
to three days off per month. As of May 1, 1997, Chinese law calls for Saturdays and Sundays off,
but this is not respected at Nority.
The factory also fails to pay the legal minimum wage and the legal wage for overtime pay. The
legal minimum wage in Dongguan is $1.93 (16Rmb) for 8 hours of work, but workers in Nority
receive only $1.20-$1.45 (10-12Rmb) per day. The legal minimum for overtime pay is $0.36
(2.99Rmb) an hour, but at Nority workers only receive $0.27 (2.20Rmb) per hour which is $0.10
(0.79Rmb) below the minimum. This, too, is a violation of Reebok's Code.
The factory provides food and housing, but workers must pay for them. Housing costs $3.86
(32Rmb) per month and the workers complain that there are 12 people to a room and they share
only one bath. Meals, which are not considered very tasty, cost from $4.82-$8.43 (40-70Rmb) per
month. There is a transportation allowance $24.10 (200Rmb) for workers to go home to visit their
families, but only after working for one year. After deducting their benefits and adding in overtime,
most workers said that they made from $60.24-$72.29 (500-600Rmb) per month.
All of the workers who were interviewed were aware that there were safety regulations the factory
should follow, but only half of them thought that the factory did so. The rest said they didn't know,
or simply that the factory did not follow the regulations. There are fire exits and fire drills once or
twice a year, but there is no protection around the machines, no face masks to protect the workers
from dust and fumes in their work area, and most of the workers didn't know if the safety
equipment they were given was up to standard. Most workers say that there have been accidents
in the factory, and all of them state that no attention is paid to workers' safety. Finally, most of the
workers say they have suffered from dizziness and other problems, and that many of their coworkers had the same problems.
The working conditions in the Nority Factory are clearly hazardous to the workers' health. There is
serious dust and noise pollution, excessive heat, dangerous fumes (from glue, for example) and
congestion.
Upon being hired, the workers had to pay one month's deposit, which is illegal under Chinese law.
Moreover, while the money is supposed to be returned to the workers when they leave the factory,
this only happens if they leave under favorable circumstances.
The factory is run like a prison labour camp . The workers must do mandatory calisthenics before
work, and can be fined for missing them. Talking during work is not allowed, and again, they can
be fined if they break this rule. As warnings for minor offences, the workers can be told to sweep
the floors, but more commonly they are made to pay fines of $7.23-$21.69 (60-180 Rmb) per
offence. This means that a worker might have to pay as much as 18 days worth of wages for
something as small as missing morning calisthenics or talking to their co-workers.
All of the workers who were interviewed mentioned abuse of the workers by management. The
workers are yelled at by their superiors, and well over half of the interviewed workers had been
11
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
fined. Several said workers had been beaten by the security guards for leaving the factory
premises without permission. The workers can also be fired simply for not exercising or for refusing
overtime. Workers are also be fired for becoming pregnant. This is certainly in violation of the
China's Labour Law, which grants maternity leave, yet Nority like many other factories in the area
which employ women workers finds it easier to dismiss pregnant workers.
Reebok insists that the workers in their subcontracted companies should have full knowledge of
Reebok's Code of Conduct. Reebok assures the public that its Code is translated into local
languages and placed in common areas throughout the factory. Yet over whelmingly, the workers
in Nority knew nothing about the Reebok Code of Conduct.
Workers at Nority are supposedly represented by the government-controlled trade union. However,
only half of the workers who were interviewed knew there even was a trade union in their factory.
Of those who did know, they all noted that the trade union was controlled by the factory owner and
was not representing workers. This is in contrast to Reebok's Code, which says workers should
have the right to freedom of association and collective bargaining.
In our 1995 shoe report , we noted that there were many strikes in the Nority Factory because of
dissatisfaction over wages. However, such strikes were isolated incidents, and had never been
successful in securing improvements. In the most recent round of interviews, wildcat strikes were
again noted because of low pay, poor living conditions, and quotas which were too high. Once
again, though, there have been few improvements.
In general, the workers are unhappy about the way they are treated and feel that the factory
owners and supervisors pay little attention to their needs. The safety conditions, the work
environment and the living conditions all suggest that the attitude of the supervisors is one of
disregard for the workers' well-being. The flagrant violations of Reebok's Code and China's Labour
Law at Nority should be of grave concern to Reebok, for it could seriously damage the company's
reputation.
12
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Handout 1c: Working Conditions in Sports Shoe Factories in China
Making Shoes for Nike and Reebok
Asia Monitor Resource Centre and Hong Kong Christian Industrial Committee
September 1st, 1997
http://www.corpwatch.org/print_article.php?&id=3031
Introduction
The last 30 years have seen tremendous changes in the production of sports shoes. When the
costs of production began to rise in the United States and Europe, and workers organised and
exercised collective bargaining power, sports shoe companies relocated their factories or sought
subcontractors in Asia where wages were much lower and where systematic repression of labour
movements promised a 'docile' workforce. Companies like Nike and Reebok began to subcontract
to medium and small-scale companies in East Asia, particularly Taiwan and South Korea.
It is no accident that these two countries became the world's two largest shoe manufacturing
countries at a time when political authoritarianism and repression of the workers' movement was at
its height. However, once the independent labour movements began to gain strength, and workers
successfully fought for higher wages and better working conditions, sports shoe production once
again shifted overseas, this time moving to countries with still cheaper labour costs, such as
Vietnam, Thailand, Indonesia and China. In these countries sports shoe multinationals made
mega-profits by exploiting the massive gap between production costs (particularly labour costs)
and the prices at which the shoes could be sold in the European and North American markets.
Ironically, different brands of sports shoes are often produced in the same factory, side by side,
despite ruthless market competition and the hundreds of millions of dollars spent on advertising in
the United States and Europe.
Before the arrival of these sports shoe multinationals in China, the shoe industry was based on
state-owned enterprises producing for the domestic market. However, since the 'opening up' of the
economy after 1984, there was an influx of Hong Kong and Taiwanese capital into labour-intensive
industries such as sports shoes. Hong Kong and Taiwanese companies established new factories
in China, which often meant the partial or complete closure of factories back home. Some of these
new investors in China formed joint ventures with state-owned enterprises or local governments,
while others set up 100 percent foreign-owned factories.
China is now the biggest shoe producing country in the world, producing over one-third of the
world's top brand-name sports shoes. In many ways it is an ideal setting for the sports shoe
multinationals and their subcontractors. Massive unemployment, low wages, the lack of
enforcement of labour laws and standards, repression of independent union organising, and the
role of the state-run All China Federation of Trade Unions in supporting management, are
combined with local governments whose policies and interests lie in attracting foreign capital and
ensuring the best conditions for the accumulation of profit.
Companies like Nike and Reebok benefit in every way because they do not have to deal with
production: they distance themselves through subcontracting, benefiting from low production costs
without any direct lines of responsibility. Subcontracting also allows these sports shoe
13
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
multinationals to respond quickly to changing styles and fashions, while passing on all of the
uncertainty and insecurity to their subcontractors and ultimately to the workers themselves.
With little or no notice, the multinationals can change the order and demand a different style of
shoe, forcing the subcontractor to make rapid changes in their production set-up. Everything must
be done very quickly, forcing the workers to work hard and fast, and to put in excessive amounts of
overtime if they want to keep their jobs.
Poor conditions in the factory are not simply the result of having a particularly harsh factory owner.
It is actually the multinationals, not the subcontractors, that ultimately set the pace of production as
well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the
timeline set by the multinational and accept the price the multinational is willing to pay per shoe.
And when the multinationals squeeze the subcontrators, the subcontractors squeeze the workers.
Just this year, Andrew Young from Goodworks International was hired by Nike to monitor their
factories in Vietnam, Indonesia and China. Mr. Young produced a report which backed Nike,
stating that the company was doing a good job and giving a few recommendations as to how it
could improve. Mr. Young himself, however, admitted that he had a hard time approaching
ordinary workers. As a result, his report was shallow and lacked credibility. This report is an
attempt to provide a more true-to-life picture of the conditions for shoe workers in China.
Both Nike and Reebok argue that conditions in the factories have improved and that the Codes of
Conduct that regulate their behavior are being enforced. This study proves, however, that this is
not the case. In fact, compared with our research on the shoe factories in 1995, conditions today
are even worse. This is especially true of work hours -the number of hours that workers are forced
to work has actually increased in the past few years. All categories of the companies' Codes of
Conduct- health and safety, freedom of association, wages and benefits, hours of work, overtime
compensation, nondiscrimination, harassment and child laborer are being violated.
Moreover, most workers do not even know that there is a Code of Conduct which the factory is
supposed to abide by. They are unaware of their rights as workers and have no ways to channel
their complaints and opinions. The strikes and demonstrations in the shoe factories throughout
Asia are a reflection of these pent-up grievances. It is clear that in the case of Nike and Reebok,
their internal monitoring systems have failed miserably.
China presents a particularly difficult situation to monitor due to the prevailing political system and
the absence of independent non-governmental organizations, such as independent trade unions
and human rights organizations. There is only one recognised union in China, The All China
Federation of Trade Unions (ACFTU), and it rarely confronts management to uphold workers
rights. ACFTU is a government-controlled union, and since local governments are intimately
involved in local businesses, union officers tend to favor managers over workers.
There are no authentic independent non-governmental organisations or trades unions and any
attempts at genuine union organising are harshly repressed. In Shenzhen, two independent trade
unionists were charged with subversion in July 1996 because they had disseminated pamphlets on
workers' rights. This repression of independent organizing sends a signal to management that
China's Labour Law and its regulations will not be enforced and that workers' rights do not have to
be respected. It is clear that in this context, management has absolute power. It is also clear that in
this context, monitoring systems as they presently exist are virtually unworkable.
14
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Research Methodology and Limitations
This report was produced by two non-governmental organizations in Hong Kong: the Asia Monitor
Resource Centre and the Hong Kong Christian Industrial Committee. During 1995 and again in
1997, we examined workers' rights and working conditions in the factories of five major
subcontractors producing sports shoes in China: Yue Yuen, Nority International, KTP Holdings and
Wellco. These factories produce shoes for Nike and Reebok. The first two are Taiwanese
companies with factories in southern China, while KTP Holdings is a Hong Kong-based company
and Wellco is a South Korean-owned company.
All the factories are located in Pearl River Delta in southern China. Most workers in the Pearl River
Delta are peasant workers (mingong) who come from rural areas of other provinces, and 90
percent of them are women age 17 to 23.
While we have monitored conditions in the shoe factories over the past three years, our latest
research was conducted in June and July 1997. We conducted detailed interviews with 10 workers
in each factory, held discussions with dozens of other workers, and included our own observations.
Here we present our findings.
Interviews with workers
Before presenting the case studies, it is important to put the interviews with workers in these
factories in context. The shoe workers, most of whom are recent migrants to the city, generally
have a low level of education. These jobs are usually their first factory jobs and they are unaware
of their legal rights as workers.
For example, workers often had a difficult time answering questions about overtime because it is
hard for them to distinguish between a "normal work day" and overtime. When hired, the workers
were told they had to work 12 hours a day. According to the Chinese Labour Law, the work day
should only be eight hours long, and the four extra hours of work should be counted as overtime.
However, the factories set the "normal" work day as 12 hours, and then add additional overtime
work. Therefore, if a worker works a 15-hour day, she will usually say she worked three hours of
overtime, when she really worked seven overtime hours.
Also, it is important to take into account that the interviews were conducted in June and early July,
which workers told us are generally not peak season in the shoe factories. This means that while
the work shifts reported here are already grueling, it is probable that during other months, when
there is more work to be done, the workers work even longer hours and are given even fewer days
off per month.
With respect to wages, one of the difficulties we encountered is that some workers are paid a set
rate, while others are paid piece rate. Moreover, most workers are not even given their pay stubs,
making it difficult for them to understand what hours they were paid and at what rate.
Several of the questions we asked refer to health and safety issues in the workplace. Most workers
felt they did not need any protective clothing. However, it is important to understand that the
workers may not be aware that they need protective clothing. They are accustomed to working
without such things as gloves and face masks.
15
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Many workers did not consider the chemicals in their factories to be hazardous, but this is often a
reflection of their lack of understanding about health and safety issues. One chemical, benzene,
which is used in China as a glue in making sports shoes, can cause anemia and leukemia and is
so toxic that it has been banned in the United States and many European countries. But the
factories do not inform the workers of the contents of poisonous substances, so workers have no
way of knowing the degree of harm done to their bodies.
Another issue we questioned workers about is whether they were forced to pay a deposit upon
being hired at the factory, which is not legal. Many workers answered that they did not pay a
deposit. However, in most cases, workers were simply not paid for the first month of work, which
amounts to a deposit. Though the factory promises that these deposits will at some point be
returned to them, this is often not the case. Workers also answered that they were allowed to make
complaints to supervisors or a complaints box, but most workers have never made complaints
themselves because they are afraid of the consequences.
The workers had minimal knowledge of trade unions and collective bargaining. Factories either
have no union or the government-controlled trade union (ACFTU), as independent unions are not
allowed. When an ACFTU branch did exist at a factory, it did so little for the workers that many
were unaware of its presence.
Finally, we must add in the element of fear and mistrust. Even though the interviewers were careful
to explain what the questionnaires were all about, many workers were afraid and distrustful of
people who came to ask so many questions. As difficult as their jobs are, the workers do not want
to lose them and logically feared that giving information about factory conditions might put them at
risk of being fired.
KTP Holdings Ltd. (Reebock, Adidas, LA Gea subcontractor)
KTP Holdings Ltd (hereafter KTP) has factories located in Bao'an and Dongguan counties. KTP
produces mostly for Reebok, but also for other shoe companies such as Adidas and LA Gear.
Orders from Reebok constitute 45-50 percent of KTP's business. The factory in Bao'an employs
4,000-6,000 workers, most of whom are women. Most of the workers are from Hunan, Sichuan,
and Jiangxi provinces, and are 22-25 years old. The workers have generally been working in the
factory for one to three years.
According to factory regulations, the workers have to get to the plant at 7:00am for morning
calisthenics at 7:30am. Then they work from 8:00am to 12:30pm, have a 30-minute break for
lunch, and then work from 1:00pm to 5:00pm. After dinner, they have to work overtime, usually
until 10-11pm. "We eat so that we can work again. We have no idea of the time", one worker said.
Most workers stated that they worked a 12-hour day, though one woman said she worked 16 hours
a day.
Despite the law calling for Saturdays and Sundays off, workers at KTP get only two days off a
month. It's even worse during the peak seasons, we were told, when they get no days off at all.
Overtime is compulsory. Workers said that if you refuse to work overtime, you will be fined $1.20
(10Rmb). However, the factory did not explain this to the workers when they were first hired, and
16
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
China Labour Law and the Reebok Code of Conduct both state that workers should not be forced
to work overtime.
The workers are paid by piece rate, and wages, including overtime, average $60.24-$72.29 (500600Rmb) per month. Workers pay $9.04 (75Rmb) a month to live in the factory dorms. Child care,
social security benefits, medical insurance and bereavement leave are not provided, although
these are benefits stipulated under the Chinese Labour Law. Some workers said the factory gives
them a health check-up once a year but 60 percent said they never had any check-ups.
Many of the workers thought that safety equipment and protective clothing were not necessary for
their job. However, there have been accidents in the factory where workers' hands were cut off by
the machines. A worker from the gluing section complained that the glue smells terrible and that
there is not adequate ventilation in the factory. She explained that the fans were insufficient to get
rid of the smell, and that the masks they got were useless because they were made of cloth. She
also said that some of her colleagues had rashes on their hands and face, and that the workers in
the gluing section often got sick.
Fines are common in this factory as well. For example, if you do not attend the morning exercise
session, you are fined. All the workers said they could lodge complaints with their supervisors, but
40 percent said nothing would happen in such a case and another 40 percent said they did not
know what would happen because they had never tried to complain. There is no trade union or
collective bargaining in the factory, but we were told that there had been wildcat strikes over low
pay.
17
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Handout 1d: Working Conditions in Sports Shoe Factories in China
Making Shoes for Nike and Reebok
Asia Monitor Resource Centre and Hong Kong Christian Industrial Committee
September 1st, 1997
http://www.corpwatch.org/print_article.php?&id=3031
Introduction
The last 30 years have seen tremendous changes in the production of sports shoes. When the
costs of production began to rise in the United States and Europe, and workers organised and
exercised collective bargaining power, sports shoe companies relocated their factories or sought
subcontractors in Asia where wages were much lower and where systematic repression of labour
movements promised a 'docile' workforce. Companies like Nike and Reebok began to subcontract
to medium and small-scale companies in East Asia, particularly Taiwan and South Korea.
It is no accident that these two countries became the world's two largest shoe manufacturing
countries at a time when political authoritarianism and repression of the workers' movement was at
its height. However, once the independent labour movements began to gain strength, and workers
successfully fought for higher wages and better working conditions, sports shoe production once
again shifted overseas, this time moving to countries with still cheaper labour costs, such as
Vietnam, Thailand, Indonesia and China. In these countries sports shoe multinationals made
mega-profits by exploiting the massive gap between production costs (particularly labour costs)
and the prices at which the shoes could be sold in the European and North American markets.
Ironically, different brands of sports shoes are often produced in the same factory, side by side,
despite ruthless market competition and the hundreds of millions of dollars spent on advertising in
the United States and Europe.
Before the arrival of these sports shoe multinationals in China, the shoe industry was based on
state-owned enterprises producing for the domestic market. However, since the 'opening up' of the
economy after 1984, there was an influx of Hong Kong and Taiwanese capital into labour-intensive
industries such as sports shoes. Hong Kong and Taiwanese companies established new factories
in China, which often meant the partial or complete closure of factories back home. Some of these
new investors in China formed joint ventures with state-owned enterprises or local governments,
while others set up 100 percent foreign-owned factories.
China is now the biggest shoe producing country in the world, producing over one-third of the
world's top brand-name sports shoes. In many ways it is an ideal setting for the sports shoe
multinationals and their subcontractors. Massive unemployment, low wages, the lack of
enforcement of labour laws and standards, repression of independent union organising, and the
role of the state-run All China Federation of Trade Unions in supporting management, are
combined with local governments whose policies and interests lie in attracting foreign capital and
ensuring the best conditions for the accumulation of profit.
Companies like Nike and Reebok benefit in every way because they do not have to deal with
production: they distance themselves through subcontracting, benefiting from low production costs
without any direct lines of responsibility. Subcontracting also allows these sports shoe
18
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
multinationals to respond quickly to changing styles and fashions, while passing on all of the
uncertainty and insecurity to their subcontractors and ultimately to the workers themselves.
With little or no notice, the multinationals can change the order and demand a different style of
shoe, forcing the subcontractor to make rapid changes in their production set-up. Everything must
be done very quickly, forcing the workers to work hard and fast, and to put in excessive amounts of
overtime if they want to keep their jobs.
Poor conditions in the factory are not simply the result of having a particularly harsh factory owner.
It is actually the multinationals, not the subcontractors, that ultimately set the pace of production as
well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the
timeline set by the multinational and accept the price the multinational is willing to pay per shoe.
And when the multinationals squeeze the subcontrators, the subcontractors squeeze the workers.
Just this year, Andrew Young from Goodworks International was hired by Nike to monitor their
factories in Vietnam, Indonesia and China. Mr. Young produced a report which backed Nike,
stating that the company was doing a good job and giving a few recommendations as to how it
could improve. Mr. Young himself, however, admitted that he had a hard time approaching
ordinary workers. As a result, his report was shallow and lacked credibility. This report is an
attempt to provide a more true-to-life picture of the conditions for shoe workers in China. (*
Handout 2 addresses Andrew Young’s report)
Both Nike and Reebok argue that conditions in the factories have improved and that the Codes of
Conduct that regulate their behavior are being enforced. This study proves, however, that this is
not the case. In fact, compared with our research on the shoe factories in 1995, conditions today
are even worse. This is especially true of work hours -the number of hours that workers are forced
to work has actually increased in the past few years. All categories of the companies' Codes of
Conduct- health and safety, freedom of association, wages and benefits, hours of work, overtime
compensation, nondiscrimination, harassment and child laborer are being violated.
Moreover, most workers do not even know that there is a Code of Conduct which the factory is
supposed to abide by. They are unaware of their rights as workers and have no ways to channel
their complaints and opinions. The strikes and demonstrations in the shoe factories throughout
Asia are a reflection of these pent-up grievances. It is clear that in the case of Nike and Reebok,
their internal monitoring systems have failed miserably.
China presents a particularly difficult situation to monitor due to the prevailing political system and
the absence of independent non-governmental organizations, such as independent trade unions
and human rights organizations. There is only one recognised union in China, The All China
Federation of Trade Unions (ACFTU), and it rarely confronts management to uphold workers
rights. ACFTU is a government-controlled union, and since local governments are intimately
involved in local businesses, union officers tend to favor managers over workers.
There are no authentic independent non-governmental organisations or trades unions and any
attempts at genuine union organising are harshly repressed. In Shenzhen, two independent trade
unionists were charged with subversion in July 1996 because they had disseminated pamphlets on
workers' rights. This repression of independent organizing sends a signal to management that
China's Labour Law and its regulations will not be enforced and that workers' rights do not have to
19
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
be respected. It is clear that in this context, management has absolute power. It is also clear that in
this context, monitoring systems as they presently exist are virtually unworkable.
Research Methodology and Limitations
This report was produced by two non-governmental organizations in Hong Kong: the Asia Monitor
Resource Centre and the Hong Kong Christian Industrial Committee. During 1995 and again in
1997, we examined workers' rights and working conditions in the factories of five major
subcontractors producing sports shoes in China: Yue Yuen, Nority International, KTP Holdings and
Wellco. These factories produce shoes for Nike and Reebok. The first two are Taiwanese
companies with factories in southern China, while KTP Holdings is a Hong Kong-based company
and Wellco is a South Korean-owned company.
All the factories are located in Pearl River Delta in southern China. Most workers in the Pearl River
Delta are peasant workers (mingong) who come from rural areas of other provinces, and 90
percent of them are women age 17 to 23.
While we have monitored conditions in the shoe factories over the past three years, our latest
research was conducted in June and July 1997. We conducted detailed interviews with 10 workers
in each factory, held discussions with dozens of other workers, and included our own observations.
Here we present our findings.
Interviews with workers
Before presenting the case studies, it is important to put the interviews with workers in these
factories in context. The shoe workers, most of whom are recent migrants to the city, generally
have a low level of education. These jobs are usually their first factory jobs and they are unaware
of their legal rights as workers.
For example, workers often had a difficult time answering questions about overtime because it is
hard for them to distinguish between a "normal work day" and overtime. When hired, the workers
were told they had to work 12 hours a day. According to the Chinese Labour Law, the work day
should only be eight hours long, and the four extra hours of work should be counted as overtime.
However, the factories set the "normal" work day as 12 hours, and then add additional overtime
work. Therefore, if a worker works a 15-hour day, she will usually say she worked three hours of
overtime, when she really worked seven overtime hours.
Also, it is important to take into account that the interviews were conducted in June and early July,
which workers told us are generally not peak season in the shoe factories. This means that while
the work shifts reported here are already grueling, it is probable that during other months, when
there is more work to be done, the workers work even longer hours and are given even fewer days
off per month.
With respect to wages, one of the difficulties we encountered is that some workers are paid a set
rate, while others are paid piece rate. Moreover, most workers are not even given their pay stubs,
making it difficult for them to understand what hours they were paid and at what rate.
Several of the questions we asked refer to health and safety issues in the workplace. Most workers
felt they did not need any protective clothing. However, it is important to understand that the
20
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
workers may not be aware that they need protective clothing. They are accustomed to working
without such things as gloves and face masks.
Many workers did not consider the chemicals in their factories to be hazardous, but this is often a
reflection of their lack of understanding about health and safety issues. One chemical, benzene,
which is used in China as a glue in making sports shoes, can cause anemia and leukemia and is
so toxic that it has been banned in the United States and many European countries. But the
factories do not inform the workers of the contents of poisonous substances, so workers have no
way of knowing the degree of harm done to their bodies.
Another issue we questioned workers about is whether they were forced to pay a deposit upon
being hired at the factory, which is not legal. Many workers answered that they did not pay a
deposit. However, in most cases, workers were simply not paid for the first month of work, which
amounts to a deposit. Though the factory promises that these deposits will at some point be
returned to them, this is often not the case. Workers also answered that they were allowed to make
complaints to supervisors or a complaints box, but most workers have never made complaints
themselves because they are afraid of the consequences.
The workers had minimal knowledge of trade unions and collective bargaining. Factories either
have no union or the government-controlled trade union (ACFTU), as independent unions are not
allowed. When an ACFTU branch did exist at a factory, it did so little for the workers that many
were unaware of its presence.
Finally, we must add in the element of fear and mistrust. Even though the interviewers were careful
to explain what the questionnaires were all about, many workers were afraid and distrustful of
people who came to ask so many questions. As difficult as their jobs are, the workers do not want
to lose them and logically feared that giving information about factory conditions might put them at
risk of being fired.
Yue Yuen Industrial Holdings Co. Ltd., A Nike and Reebok Subcontractor
Yue Yuen Industrial Holdings Co. Ltd. is based in Dongguan, near the first Special Economic Zone
in China. It is registered in Hong Kong and belongs to a Taiwanese shoe company, the Pao Chen
Cooperative. According to a business magazine published recently in Taiwan, the Pao Chen
Cooperative employs 140,000 workers in its shoe factories and is the biggest sports shoe producer
in the world.
Yue Yuen was established in 1989 and has a contract to produce for both Nike and Reebok. It is a
huge factory, employing 50,000-60,000 workers, most of whom have migrated from Hunan,
Henan, Jiangxi and Hubei. About 80 percent of the workers are women 18-22 years old. All the
workers we interviewed had been employed for less than one year.
Long working hours have become standard in the Special Economic Zone since it was set up at
the end of 1970s. In Yue Yuen, workers work 10-12 hours a day six or seven days a week, not
including overtime. This means that the workers work 60-84 hours a week on a normal schedule,
which is at least 16 hours more than the limit set by Chinese law. Moreover, the fact that they must
work six or seven days a week violates the law giving Saturdays and Sundays off.
21
Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
Eighty percent of the interviewed workers said on top of the normal work day of 10-12 hours, they
worked an additional 2 hours of overtime every day. Forty percent of the interviewed workers said
that overtime work is compulsory and 75 percent mentioned that if they failed to work overtime,
they would receive a fine or a warning. Although 60 percent said that the overtime work was not
compulsory, they said that if you do not complete your daily quota, you had to stay behind to
complete it. The Chinese Lab our Law and both the Reebok and Nike Codes of Conduct all say
that they will not use forced labour. However, coercing workers into forced overtime--particularly
after a working day already well over the legal limit--directly violates both the Codes and China's
Labour Law.
Moreover, according to the China Labour Law Article 44, overtime pay should be at least 1.5 times
the regular wage. In the survey, half the workers who were paid by piece rate did not receive any
extra pay for overtime work. In addition, many workers did not know how much they got for
overtime. Monthly wages ranged between $48.19 and $72.29 (400 and 600Rmb), including their
overtime pay.
Social security benefits, health care, child care and bereavement leave were not provided by the
factory, although they are mandatory by law. Health care is also not provided on a regular basis,
and less than half said health check-ups were given by the factory.
According to the interviews, 80 percent of the workers said they did not need any safety equipment
or protection for their jobs. However, many workers recalled accidents which had occurred in the
factory, particularly workers' hands or fingers being cut off by the machines.
While workers said that the ventilation in the workplace was acceptable, they complained about
noise, air pollution and fumes. Many of them have skin irritations, and several suffer from dizziness
and headaches.
The workers in Yue Yuen have to participate in mandatory calisthenics every day. Unlike workers
in other factories, they are allowed to talk to their coworkers while working, and the management
does not use corporal abuse. However, verbal abuse and fines are popular methods of
punishment. Many workers mentioned that for minor offences, the fines were $3.61 (30Rmb), but
for major mistakes the fines could be as much as $10.84 (90Rmb).
Most of the workers said they could make complaints to their supervisors but half of them did not
know what would happen if they did because they themselves had never complained. The
government trade union does exists at the Yue Yuen factory. Sixty percent of those interviewed
recalled strikes that had occurred in the factory, usually because the factory had not paid the full
wages.
Almost all of the workers in the Yue Yuen factory who were interviewed had no knowledge of the
Nike or Reebok Codes of Conduct. The workers who thought they knew about the Codes were
often confusing them with the ISO9002, the international quality control standards which products
must meet in order to be exported. It is clear that the companies are not making their Codes
available, as they claim they are.
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Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science
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Edited by: Stephanie Nardei, University of Arizona SW Environmental Health Science