Update on Remediation Efforts at E Garment (Cambodia)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Ben Hensler
Date:March 27, 2013
Re:Update on Remediation Efforts at E Garment (Cambodia)

This update concerns developments with regard to E Garment, a supplier of collegiate apparel for VF Corporation (“VF”), and Century Miracle, another VF supplier. Both are owned and operated by the same company, Hong Kong-based apparel manufacturer, Yee Tung Garment Company (“Yee Tung”). The WRC has issued multiple reports concerning significant labor rights violations at E Garment, located in Cambodia. More recently, we have reported on violations at Century Miracle Apparel, located in Jordan. Because the violations found at both factories are quite serious and, in particular, involve violence against factory workers, the WRC has strongly urged both VF, one of Yee Tung’s largest customers, and the FLA, in which Yee Tung is a participating supplier, to take rapid action to secure Yee Tung’s remediation of these abuses.

Over the past several days, the WRC has received new communications concerning steps Yee Tung promises to take to address some of the violations we have identified. In the case of E Garment, the WRC was provided with this information on Friday, March 22 in the form of a summary from VF of discussions it has had with Yee Tung’s management, and, in the case of Century Miracle Apparel, the factory’s management transmitted this information directly to the WRC on Tuesday, March 26.

In the case of both factories, the commitments to improved labor rights compliance voiced by Yee Tung, while encouraging in some significant aspects, are inadequate in both substance and specificity. For this reason, with respect to E Garment, the WRC has already requested additional clarification from VF. We will be making a similar request concerning Century Miracle.

At E Garment, Yee Tung has pledged to reinstate and/or pay compensation to several groups of workers, as the WRC has recommended. This positive news is tempered by a lack of specificity in these commitments and by the absence of other essential remedial measures. Most troubling, the remedial measures promised by Yee Tung do not include any disciplinary action against employees responsible for the incidents of violence and, in particular, no acknowledgement that workers were wrongly subjected to violent attack. Moreover, despite the lengthy history of E Garment failing to fulfill promises to remedy many of the very same violations, VF has not provided any information as to the dates by which the corrective measures Yee Tung is promising now will be completed, or how VF plans to ensure that, this time, the company will keep these commitments.

The following is a summary of the key pledges made by Yee Tung at E Garment, as reported by VF, and the gaps and deficiencies therein:

  • Yee Tung has agreed to reinstate eight workers terminated after a 2010 incident which the WRC found to have been a unilateral attack by a company-favored union, VKYFTU, on members of an independent union, C.CAWDU. The WRC is seeking confirmation from VF that these eight workers will be offered positions equivalent to those they formerly held and will receive full back-pay from the time of their termination to the present.
  • Yee Tung has agreed to reinstate and pay compensation to 33 workers who were discriminatorily terminated in 2008; the WRC is seeking clarification from VF as to whether these workers will be offered positions equivalent to those they formerly held and will receive full back-pay from the time of their termination to the date of their reinstatement.
  • VF indicates that Yee Tung is willing to compensate, “workers involved in the May 2012 strike” – the WRC is not aware of any such strike, but has recommended that E Garment pay back-pay to two workers who were discriminatorily terminated after a September 2010 strike for the period of time between their termination and their subsequent reinstatement by E Garment in February 2011. The WRC is seeking information from VF to determine whether or not Yee Tung has accepted this recommendation, given what may be simply confusion over dates on VF’s part.
  • VF did not indicate whether Yee Tung has made any commitment to reimburse workers for union dues deducted from their wages and paid to the company-sponsored gangster-union VKYFTU (the organization implicated in incidents of violence against workers in 2010 and 2013), after workers had requested that the company cease such deductions.
  • VF has not provided any information as to the dates by which Yee Tung will complete the promised reinstatements. VF should require Yee Tung to agree to a corrective action plan for both factories that includes explicit deadlines for the reinstatement and compensation of terminated workers and indicates clear consequences for noncompliance.
  • VF has not indicated any commitment by Yee Tung to discipline managers who have colluded with the company-sponsored VKYFTU union in committing violence against workers, or against the VKYFTU’s thugs who perpetrated this violence and are still on the company payroll. Because failure to take such action sends a clear message to others at the company that such violence will be tolerated, it leaves un-remedied the severe chilling effect of such incidents on employees’ associational rights. Such disciplinary action, therefore, is an essential element of any legitimate remediation plan.

Concerning the Century Miracle Apparel factory in Jordan:

  • With regard to the violent incident on March 2, where, as the WRC reported, a company supervisor directed Jordanian workers to beat four Burmese workers, all of them women, for refusing to come to work during a strike, Yee Tung has given conflicting explanations for what occurred and has offered only inadequate measures in response. Yee Tung acknowledges that (a) the Burmese workers were “injured,” (b) that there was “friction” between the Burmese workers and Jordanian employees who, the workers indicated, carried out the beatings, and (c) that it directed the Jordanian workers to enter the Burmese workers’ dormitories on the day of the incident. Nevertheless, the company asserts that the Jordanian workers’ “presence that day was to safeguard the personal safety of the [Burmese] workers [and the] Factory did not use violence to our workers.” Yet the company admits that since the date of this incident more than 116 Burmese workers have chosen to return home prior to completing their employment contracts. Moreover, Yee Tung states that the four injured workers have “resigned” from the company and received unspecified “special compensation,” but that neither they nor the company were able to identify the persons responsible for the attacks. The company’s statements justifying its failure to discipline those responsible lack credibility: how were the four female workers “injured” and why did they receive “special compensation,” if the factory “did not use violence to our workers” in this incident? How can the company have directed the Jordanian workers to enter the Burmese workers’ dormitories, but not know who those Jordanian workers were or which of its supervisors directed them to do so?
  • With regard to the imposition of recruitment and employment fees on migrant workers, while the company claims that employees are not charged any such fees, the contract between the factory and its local recruiting agent in Burma makes explicit exceptions for “administrative charges” and “other mandated charges from local authorities.” Yee Tung shared with the WRC what it describes as “new codes of conducts for recruitment of foreign workers,” issued March 18, 2013, that refer to a “no labor agency fee policy.” However, the company gave no indication whether it plans to reimburse workers for previous fees they have paid. Similarly, the company stated that with regard to the 116 Burmese workers who resigned before the end of their employment contracts, there was “no discussion/intention to impose the residency charge” on these employees. However, the factory does not indicate whether or not these workers are being required to pay for their air tickets home, provision of which, the company’s documents indicate, is contingent on workers’ completing their three-year employment contracts.
  • With regard to the other labor rights violations identified by the WRC, including failure to pay overtime premiums and wage discrimination against Burmese workers, the company denies that these occurred and refers to company policies and agreements with its labor recruitment agency as ostensible proof. Although the company admits that for a time it failed to provide workers with pay statements, a violation of applicable labor codes in itself, it claims that it is now doing so. Moreover, the factory admits that there is a problem with supervisors shouting at workers, and promises to take steps to prevent it, but does not acknowledge the physical abuse of workers the WRC reported.
  • Yee Tung’s claims with respect to the violence at Century Miracle Apparel are implausible on their face and its partial denials concerning the other labor rights violations are unsupported by any evidence other than written company policies. It is the WRC’s experience that testimonial evidence concerning what actually occurs inside factories is typically more reliable than companies’ written documents purporting to describe their practices or intentions. Therefore, in light of the testimonial evidence we have previously reported, and given Yee Tung’s track record of violating workers’ rights while claiming otherwise, we cannot credit the companies’ efforts to deny or diminish the violations at Century Miracle Apparel and will reiterate to Yee Tung our recommendations for corrective action.

The WRC has asked Yee Tung and VF to clarify their commitments to remedy the violations of labor rights we have identified at E Garment. We hope and expect that more detailed and more robust remedial plans will be forthcoming. We will also seek further commitments at Century Miracle Apparel. We will continue to monitor and report on the degree to which Yee Tung’s remedial commitments are made and are actually implemented. Please feel free to contact us with any questions.

Scott Nova 
Worker Rights Consortium 
5 Thomas Circle NW, 5th Floor 
Washington, DC 20005 
ph 202 387 4884 
fax 202 387 3292