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John Lewis: “profiting from sweatshops”

Last week, British Prime Minister David Cameron and his deputy Nick Clegg were presenting John Lewis as an example of “popular capitalism”, a model of corporate responsibility that not only increased its profits but gives its workers a share in the profits.

Today, it is reported that some of those profits are based on the super-exploitation of sweat shop workers in China.

A report by the Hong Kong based SACOM group details how workers at the Rainbow Factory in Dafeng, Jiangsu province, making Olympic mascots, are forced to work for even less than the pitiful minimum wage of CNY930 – some were making only CNY900, that’s about £90 for a month’s work! The workers say the contract was with the wholesaler Golden Bear and the consignment was for John Lewis.

The report is based on the experience of volunteers who worked undercover in the factory during the last year, as the factory geared up for Olympic orders. They found that the rights that China’s labour laws supposedly guarantee were continually ignored. For example, there is a maximum overtime limit of 36 hours per month, but workers were regularly working up to 110 hours overtime every month – and when there is a rush on they have no days off at all.

Overtime pay is also a scandal; the law requires a premium of 150% of the normal rate, Rainbow is paying its workers just CNY1, that’s about 10 pence, on top of standard pay. Most workers are employed on piece rate – but they are not told what the rate is until after they have completed an order! That means the managers can always manipulate the rate to guarantee the maximum profit.

Any attempt to defend workers’ rights, by seeking legal redress, for example, is impossible because that requires evidence based on contracts and pay slips – but the workers are not given either !

Although the firm takes no notice of its workers’ rights, it’s a different story when it comes to the goods themselves – even the slightest flaw in the sewing is penalised

In 2008, LOCOG issued “sustainable and ethical” sourcing codes that were supposed to ensure that all products associated with LOCOG would be produced under internationally acceptable social standards. That code has proved to be ineffective. When inspectors visited the Rainbow factory, management gave the workers prepared answers to give if they were asked anything – they had to deny working any overtime and to say they only worked until 5:30. According to the workers, the inspectors were also given falsified time sheets.

Since the onset of the world crisis in 2008, much has been written about China’s economic dynamism and its development away from sweatshops and towards modern high-tech industries. What this report shows is that there is still another side to the picture – many sweat shops have simply been relocated from areas such as Guangdong, where wages have been forced up, to less developed provinces such as Jiangsu. And Western retailers, even the supposedly enlightened ones, are still profiting sweated labour.

The full report can be read at: http://sacom.hk/archives/922

 

 

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