WRC Assessment: INDEX (Honduras)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Tara Mathur
Date:September 23, 2015
Re:WRC Assessment: INDEX (Honduras)

Please find here a new report regarding labor violations identified by the WRC at Industrias de Exportacion, S.A. (INDEX), an apparel manufacturing facility in Honduras that is owned and operated by the company Grupo Beta. INDEX has been disclosed as a producer of university logo apparel by a number of licensees, including adidas, Under Armour, Gear for Sports, Knights Apparel (both Gear and Knights are part of Hanesbrands, which also sources non-collegiate product from the factory), VF Corp., and 289C Apparel (a business entity of the Dallas Cowboys).  In response to the WRC’s findings, and after extensive engagement by the WRC with licensees and by licensees with the Grupo Beta, INDEX has partly remedied the violations, with significant benefits for workers. However, INDEX has failed to fully address certain areas of noncompliance.

The WRC’s assessment of INDEX uncovered a number of violations of Honduran law and university codes of conduct, including substantial wage theft via multiple forms of off-the-clock work, failure to provide legally required accommodations to pregnant workers, unsanitary bathrooms, the lack of a legally required child care center, and multiple safety and health violations, among other breaches.

INDEX committed to undertake sufficient remedies in most of these areas, as detailed in our report. Most notably, INDEX changed its policy and procedures to eliminate unpaid work before the beginning of the formal workday and provided back pay to more than 3,000 workers.  

Unfortunately, INDEX has refused to take adequate remedial action in two areas. First, INDEX has not remedied, nor agreed to remedy, the lack of child care at its facility. The factory has stated that it will work on solutions with buyers, but has refused to make any concrete, time-bound commitment to make child care available to any portion of its workforce. Such child care is required by Honduran law. Second, INDEX has refused to allow an organization, independent of buyers and of the employer itself, to provide training and assistance to workers to rectify the long-standing absence of legally mandated worker representation on the factory’s safety and health committee. Active worker participation in such committees is not only required by law, but is widely recognized to be an integral part of effective health and safety management in a manufacturing facility. Subsequent to the WRC’s investigation, workers were added to the committee; however, without effective training and education, delivered by an organization accountable to workers, the prospects that their participation will be effective are dim.
The events at INDEX raise a broader concern. This factory has been producing for some of the most prominent university licensees for many years – in some cases, for more than a decade. The factory has been subject to university labor codes throughout that time period and has also been subject to the licensees’ own individual labor codes, which are supposed to be vigorously enforced through these corporations’ monitoring systems. INDEX is one of the largest apparel factories in Central America and Grupo Beta, its parent, is a well-established, well-resourced regional manufacturer. Assuming a high level of commitment by licensees to compliance with their university labor code obligations, one would expect to find a high level of compliance with university standards at a facility like INDEX. That is not what we found.

While we are pleased to be able to report that most of the violations are now remedied, or are in the process of being remedied, these violations should have been identified and corrected by the licensees long before the WRC launched its assessment. The fact that a major manufacturer like INDEX can violate university standards for a decade, while producing continuously for licensees that are themselves leading global brands, is an indication that persistent labor rights abuses continue to be driven by the brands’ sourcing practices and tolerated by their monitoring programs. This case demonstrates why independent monitoring, under university auspices, is crucial to protecting the rights of workers in collegiate factories, but it also demonstrates that broad compliance will not be achieved without a substantially greater level of effort and commitment by licensees – including both improvements in their monitoring systems and in the way they organize and operate their supply chains.

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