Update on Rising Sun (Kenya)

To:Primary Contacts, WRC Affiliate Colleges and Universities
From:Scott Nova
Date:January 11, 2007
Re:Update on Rising Sun (Kenya)

I write to provide an update on the case of the Rising Sun facility in Kenya.

As detailed in our November 13 report on the facility, Rising Sun has committed multiple violations of university codes of conduct, including the illegal mass firing of 1,272 workers, in response to efforts by these workers to exercise their associational rights. Rising Sun has ignored a ruling by the Industrial Court of Kenya requiring that the workers be reinstated. Unfortunately, since the WRC’s report was issued, there has been no meaningful action on the part of Rising Sun to correct these violations. The workers remain locked out of their jobs and the facility has offered to pay only a small fraction of the legally mandated compensation owed to any worker who is not reinstated. At present, the facility is not in operation and its future is uncertain.

The failure by Rising Sun to address the situation has continued despite positive efforts by Steve and Barry’s University Sportswear to compel Rising Sun to change course. At the WRC’s recommendation, Steve and Barry’s pressed Rising Sun directly to reinstate the workers, offering the placement of continued orders as an inducement to resolve the situation. Steve and Barry’s also required Rolex Garments, the company through which its orders were placed at Rising Sun, to pressure Rising Sun to undertake the necessary corrective action. Rising Sun did not respond favorably to these interventions. Indeed, the company has refused even to engage in substantive dialogue with the brands, monitoring organizations and labor organizations seeking a resolution. Ultimately, at the WRC’s recommendation, Steve and Barry’s directed Rolex to discontinue its business relationship with Rising Sun and to refuse to pay for products made in violation of applicable codes of conduct, until and unless a resolution is reached. It is regrettable that even this step has not been sufficient to persuade Rising Sun to act.

An additional issue arose in the context of the push for remediation at Rising Sun: the question of Steve and Barry’s business relationship with Rolex Garments. The WRC learned from Steve and Barry’s in late November that it had discontinued business with Rolex in view of the developments at Rising Sun. However, the WRC also learned at the same time that Rolex had in fact begun to take appropriate action to press Rising Sun to correct the violations and reinstate the workers. Subsequently, the WRC held several meetings with senior management at Rolex Garments and obtained written commitments on the part of the company to continue efforts to resolve the situation at Rising Sun and to address unrelated labor rights violations at Rolex (concerning freedom of association and the illegal use of contract labor) that had been uncovered in the course of the WRC’s work on the case. In view of these developments, the WRC urged Steve and Barry’s to resume production at Rolex Garments, contingent upon Rolex fulfilling its commitments; it is imperative that factories that respond appropriately to labor rights concerns be rewarded with ongoing business. On December 21, Steve and Barry’s confirmed that it had resumed production at Rolex Garments with an order for approximately 250,000 garments, to be produced on an ongoing basis between December 2006 and May 2007. The placement of this large order was a laudable step by Steve and Barry’s, allowing for remedial steps now underway at Rolex to continue and ensuring that Rolex will fulfill its commitment to condition any further business relationship with Rising Sun on a positive resolution for the Rising Sun workers. This step also sends an important signal to other facilities in the region that constructive action on code of conduct compliance can be in the economic interest of suppliers.

Assuming that the Rising Sun workers are not reinstated – and reinstatement appears very unlikely at this juncture – there is a significant issue of severance. As noted above, Rising Sun has so far offered to pay only a small portion of what the law requires a factory to pay to terminated workers. The WRC’s Field Director for South Asia is presently in Sri Lanka, where Rising Sun’s parent company is headquartered, attempting to meet with the owners concerning severance and the factory’s other obligations. Steve and Barry’s has pledged to contribute $20,000 toward the severance owed ($10,000 to be paid directly by Steve and Barry’s and $10,000 to be paid by Rolex, at Steve and Barry’s request). The WRC is working to secure a commitment of funds from Jones Apparel Group and other Rising Sun buyers. Jones was the factory’s primary customer for years and it is the brand that bears the greatest burden of responsibility in this case. It is our hope that substantial contributions from Jones and other brands, the funds pledged by Steve and Barry’s, and whatever amount Rising Sun can be compelled to pay will, combined, be adequate to cover the full severance due to the workers.

Overall, Steve and Barry’s actions in the case of Rising Sun have been positive, despite several weeks of delay early in the process. Steve and Barry’s has 1) placed strong pressure on both Rising Sun and Rolex on the reinstatement issue, 2) been willing to pledge additional business as an inducement to compliance, 3) made an early commitment of funds toward the severance owed the Rising Sun workers, and 4) helped to secure meaningful commitments by Rolex management to improve labor practices at that facility. Steve and Barry’s has not sought to use the fact that its relationship with Rising Sun has been indirect and relatively brief as a justification for inaction, but has instead acted on all of the WRC’s recommendations in a relatively timely fashion. Those universities that contacted Steve and Barry’s in this case no doubt contributed to the company’s willingness to move aggressively.

As always, please feel free to contact me if you have any thoughts or questions about the information above. 

Scott Nova
Worker Rights Consortium
5 Thomas Circle NW
Washington DC 20005
ph 202 387 4884
fax 202 387 3292
[email protected]