WRC Factory Investigation

Hansae Vietnam

Factory: Hansae Vietnam

Key Buyers: Gap, L Brands, Nike

Year: 2017

Case Summary

Hansae Vietnam is a large garment factory located outside of Ho Chi Minh City in southern Vietnam, employing about 8,000 workers. The factory has produced for major companies, including Nike, for which it was a supplier of collegiate licensed goods, Gap, H&M, L Brands (owner of Victoria Secret), Hanes, Inditex (owner of Zara), JC Penney, Macy’s, Children’s Place, Target, and Walmart.   The WRC began its investigation of Hansae Vietnam in October 2015, following a strike by the company’s employees over mistreatment and poor working conditions. In order to conduct a full investigation, the WRC requested help accessing the factory from Nike, as the WRC has done in previous investigations.   Nike initially refused to facilitate access to the factory, but after the WRC released an initial report based on interviews with factory workers that documented many serious labor rights violations, and university affiliates pressed Nike to uphold its obligations to them under their licensing agreements, Nike and Hansae ultimately agreed to let the WRC conduct an on-site inspection in October 2016.   The WRC released an in-depth report in December 2016 following the on-site inspection. The WRC’s reported detailed numerous labor rights violations, including:  

  • Extensive wage theft and forced and excessive overtime
  • Excessive temperatures in factory buildings—reaching up to 95 degrees F – which, along with excessive work pressure, caused many workers to collapse on the job,
  • Other unsafe conditions, including exposure to toxic chemicals and lack of ergonomic seating
  • Violations of workers’ associational rights—managers were in charge of the factory union
  • Abusive treatment of workers—including verbal and physical abuseand one manager’s instituting a ban on workers yawning
  • Discriminatory terminations of pregnant workers

After months of engagement with Nike and Hansae, Nike made commitments to ensure the violations were ended, and the WRC and Hansae signed a memorandum of understanding to address remediation of outstanding issues. Hansae has paid workers $750,000 in back pay to address prior wage theft; is providing ergonomic seating for workers to prevent musculoskeletal injuries; committed to phasing out allowing managers to serve as union officers; and reinstated workers who were terminated on account of pregnancy. Full remediation on all issues was ultimately not achieved, however, because Hansae refused to take further measures after Nike terminated its business relationship with the company.

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