China
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For Immediate Release: February 22, 1999 Media Contact: Jason Mark, Global Exchange, 415-255-7296 Hong Kong researcher Alice Kwan available for interview, 011-852-2366-5860. The entire report is also available on-line. Working Conditions in Chinese Factories Making Disney Products
By the Hong Kong Christian Industrial Committee The Hong Kong Christian Industrial Committee, founded in 1967, provides direct services to workers and their families, and is a watchdog for government policies. It has also produced numerous reports on working conditions in China, particularly in the garment, shoe and toy industries. Between July 1998 and February 1999, our researchers visited four factories in South China producing for Disney--three garment factories and one footwear. Their research is based on interviews with dozens of factory workers. The factories are Sheng Li, Midway Daily Products Ltd., Guo Nian Garmnet Factory, and Chi Li An Footwear Factory. When our researchers visited the last factory, it had closed down but they gathered information on the ongoing controversy between the owner and former workers. The following are the findings from our research: Case 1: Sheng Li Sheng Li produces Mickey Mouse clothing for export. It is a small factory, with 60 to 80 workers on the sewing production line, depending on the production schedule. Eighty percent of the workers are women between the ages of 18 and 26. Wages and Working hours Workers are paid a standard piece rate. When working overtime, workers receive only RMB 0.8 above the piece rate. But according to the Labour Law, workers should be paid 1.5 times for working overtime on weekdays and double time on Saturdays and Sundays. The workers said they usually work for 12 hours a day: 08:30-12:00, 13:30-17:30, and 18:30-23:30. Generally, they work for six days a week, even in low season; they have no holidays in high season. They earn only RMB 500-700 a month. Workers are fined RMB 12 if they take 3 days or more off a month. Contracts and Deposits Most of the workers sign a two-year contract, but are not given copies of their contracts. Illegally, RMB 20 are deducted each month from the workers' wages as a "deposit." Before they can start working for the factory, workers are charged RMB 22 (RMB 2 for an identity card and RMB 20 for tools). Workers are told that the tool deposit will be returned if the tools aren't damaged. None of the deposit is refunded if workers resign less than two years after joining the workforce. Workers are not medically insured even though, according to the China Labour Law, the factory is obliged to insure workers. Living Conditions All the workers live in dormitories. Each dormitory building is guarded by a security guard. Rules and regulations are written on a notice board at the gate. Workers are charged about RMB 30 a month for accommodation. Some live in a 4-story building where the lower two stories and a half of the third floor are used as a warehouse and the other floors are used as a dormitory. This violates Chinese fire regulations. Between 14 and 16 workers live in a flat, with five workers sharing an approximately 100 square foot room furnished with several bunk beds. Although workers complain that the meals supplied by the factory are unappetizing, they have to pay RMB 50 a month for food. Many workers say they would rather cook for themselves. Management Some workers complain that it is unfair that their supervisors often offer the best paid jobs to their own villagers while workers without connections are only given low paying jobs. Code of Conduct According to the Walt Disney Company's Code of Conduct for Manufacturers: "Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times." However, we found that the Code of Conduct is not publicized to workers. Interview in the dormitory The researchers came across five women workers at the ground floor of their dormitory building, which was next to the factory and which was not guarded by any security staff. The women invited the researchers to chat in their room. The room, which had three bunk beds, was in a flat on the third floor. A small fan without a safety guard was the only ventilation in the sweltering heat. Fortunately, a big window in the room allowed some fresh air and a view of the factory. Two of the workers came from Guangxi while the others were from Guangdong. They had worked in town for six to seven years, since they were 16 years old. They had all worked in different factories in different areas, such as Shenzhen, Zhongshan, and Guangzhou. These young women did not have any ambitions for themselves. Frequent moves from one factory to another make it difficult for workers to develop skills, they told researchers. This means the workers always remain as low ranking and unskilled workers. When they get into their thirties, they will be replaced by younger women. The women were very ambivalent about their own futures. It seemed that most of them would prefer to stay at home with their families rather than work in the factories. The women had only a primary education. They hoped to provide their younger siblings with opportunities to pursue higher education. As elder sisters, they wanted to lessen the burden on their families by providing for themselves in the town. But their wages were too low for them to send money home. In fact, they found it increasingly difficult to support even themselves because of inflation in the urban areas. None of the women were aware of their labour rights, although the China Labour Law was passed in July 1994. They didn't know about the legal protections provided to them by law. One of the women said: "We are used to being deprived. We have suffered for a long time, even in the past. It is common for employers to exploit us." Case 2: Midway Daily Products Ltd. Interviews took place during low season. Nevertheless, one worker said they had worked for 30 hours overtime the previous month. Apart from clothes, the factory makes shoes and dolls for Disney. According to the workers interviewed, about 600 people work in the factory--half are men and half women. Most of the workers are aged 20 to 30 and come from other provinces, such as Sichun, Hubei and Hunan. Interviewees were chosen at random, but all the workers had been in the factories less than 6 months. Wages and Working Hours The normal working hours are 08:00-11:30 and 13:15-17:00 for five and a half days a week. Workers are regularly forced to work overtime from 18:00 to 20:00. But in the high season, overtime is often extended to 22:00, and it is common to work on Sundays. Hours worked on Saturday afternoon and on Sundays are considered overtime. However, according to Chinese Labour Law, the normal working week should be five days, not five and a half. So work on Saturday mornings is also overtime work and payment should be double the normal rate. Workers cannot refuse to do overtime. The factory pays only RMB 0.8 extra per overtime hour, which is lower than the minimum set by Chinese Labour Law. Wages are mainly calculated on a piece rate basis, except for clerical and managerial staff. One woman worker complained that she had been promised RMB 800 a month in her contract, but once she began working her pay was calculated on a piece rate basis. Piece rate is a system which makes workers' income unstable, varying from season to season. One worker said she usually earns only RMB300-400 a month, though RMB1,000 in a high season. On average, most workers can earn RMB 600 a month in low season (including overtime) and RMB1,000 in high season. Contracts and Deposits Some workers have signed contracts with the factory, but others do not. By law, however, enterprises must sign contracts with all workers. According to law, enterprises should pay for health, safety, and medical insurance for their workers, but the factory does not. Workers have to pay for their own medical care. The factory does not provide medical care for victims of industrial accidents. Workers are forced to pay a RMB 50 entrance fee and a RMB 100 deposit. All such charges are prohibited by Chinese Labour Law. The deposits are not returned if workers leave the factory within the first three months. The workers also pay the residential tax, RMB 30 per month for three months, which should be paid by factory owners. Living Conditions Free accommodation and food are provided by the factory management. However, a sewing worker said that according to her contract, she should receive RMB 350 as food allowance every month. Instead, the money was deducted from her wages. Investigators found one room, measuring about 50 square feet, where eight women live. Workers reported that some activities are occasionally organized for them, such as musical activities and sports, but there was no trade union and nobody is willing to stand up for their rights. Management If workers arrive a minute late, they are penalized RMB2; if 5 minutes late, RMB10. Those workers who arrive more than 15 minutes late are regarded as absent and fined RMB30. Anyone who is absent for 3 days is fired. General evaluation Employees in this factory can earn more than average income in Guangzhou in the high season, but their wages are terribly poor in the low season. Moreover, income is unstable because of the piece rate system. The deposit and entrance fee are clear violations of Chinese Labour Law, and workers expressed extreme displeasure and frustration with the fine system. Work on Saturday afternoons and Sundays is paid at the overtime rate. It is better than many factories, especially those in Donggung. However, it still violates the law as workers are not paid overtime for Saturday mornings. Moreover, workers say they work 30 hours overtime from late June to mid July. If this had included Saturday morning as overtime, the total would exceed the legal limit of 36 hours a month. Case 3: Guo Nian Garment Factory The researchers visited the factory in the summer of 1998 and again in February 1999. The factory produces children's wear for Disney. There are about 200 workers. All but about a dozen are women, most of them between 20 and 30 years-old. Most of the employees come from rural villages in Sichuan, Hunan, Guangxi, Hainan and Jingxi. v Wages and Working hours Employees work daily 08:00-12:00 and 13:30-18:30. Workers can seldom take even a short break. They always work overtime until 02:00 or 03:00, especially in the high season. As a result, they are working for more than 16 hours a day. It is clear that the factory seriously violates Chinese Labour Law covering working hours. The Chinese Labour Law clearly states that employees should be paid 1.5 times the daily rate for overtime work and double time for weekend work. But workers are only paid an extra 10 percent of the normal rate for working overtime. Employees usually work 7 days a week. Nevertheless, most of them earn only about RMB 500-600 a month (including overtime). Sewing workers can earn up to RMB 700-800, paid on a piece rate basis. In February the workers complained that they had not been paid for three months. As the Chinese New Year was approaching, many workers planned to return home for the holidays. Management had promised to deliver their wages on November 9, three months earlier. Several workers who could show their confirmed train tickets for traveling home were given their wages, but most of the workforce could not get any money. As the price of train tickets was increasing daily, workers wanted to buy the tickets as early as possible, but they had no money to do so. Because they hadn't been paid for three months, most of the workers could not join their families for New Year, the most important holiday in the China. Contracts and Deposits The workers receive no welfare or social security at all. As the Labour Law states, labour contracts should be signed by both management and workers. But Guo Nian workers say that they had signed no contract and had never been given insurance. Workers have to pay a month and a half of wages as a deposit when they started working in the factory. The deposit is not refunded if they stay less than a year. Although this deposit system is prohibited by Chinese Labour Law, it is a common way for employers to keep their workforce. Living Conditions Workers are provided with free accommodation. Between 10 and 12 workers live in a room furnished with bunk beds. There is a fan, but hot water is only available on the ground floor of each dormitory building, and workers complained that it is dangerous to carry hot water upstairs. The management charges RMB 60 for food. Meal permits are issued when employees start working. The total charge of catering, water and electricity is RMB 75, and is deducted from workers' wages every month. Management Workers are fined RMB 50 if they are absent for a day without prior permission. The management never actively dismisses workers but tries to force those they want to leave to resign. Management sometimes withholds the wages of those they want leave until the undesired employee departs. Wildcat Strike As the interviewed workers report, the factory often does not pay wages on time and most payments are delayed for about two months. On June 16, 1998, workers decided they wouldn't tolerate this any more and organized several wildcat strikes to claim their back pay. The protests, however, were unsuccessful. Case 4: Chi Li An Footwear Factory and Fei Fan Footwear (Panyu) Ltd Co. The Chi Li An Footwear Factory and the Fei Fan Footwear (Panyu) Ltd. Co., which had manufactured Disney children's shoes, were closed when our researchers visited. The buildings had been taken over by another garment company. Two legal statements were posted explaining why the factories had closed. On the night of July 16, 1998, the factory boss fled with RMB 400,000, of which RMB 300,000 was wages that were to be paid to the workers. The factory manager had stolen all employee wages from April to July, 1998 and the workers' entry deposits. One hundred and fifty eight Fei Fan workers brought the case to the Panyu Labour Tribunal, accusing Fei Fan of withholding money owed to them. The individual debts varied from RMB 70 to RMB 11,895. The court found that the factory owed the 158 workers RMB 277,954.25. According to the posted tribunal statement, the employer did not sign labour contracts with workers and charged each worker an entry deposit between RMB 100-500. Both of these abuses violated Chinese Labour Laws. Worse still, workers' wages were three and a half months in arrears, amounting to RMB 253,125. Workers entry deposits and other money, which amounted to RMB 24,829.25, were missing as well. The committee of the Da Ping Industrial Zone could only pay RMB 131,913.85 to the workers. All of the factories' assets were auctioned on November 5, 1998, according to the public announcement issued by the People Court of Panyu City Guangdong. |