Olympic Sweatshop

OLYMPICSWEATSHOP Speedo Production in China

Breaks Records for Worker Abuse Toys “R” Us and Carrefour also Implicated

Imagine how powerful it would be if some, or even one, Olympic athlete would speak out against the systematic exploitation of Chinese workers in plants producing sporting goods for export to official U.S. Olympics sponsors like Speedo. These athletes have the stature, and voice, to demand that these Olympics workers be treated as human beings, with their rights respected and paid fair wages.

President Bush, who accepted an invitation from China’s President Hu Jintao to attend the 2008 Olympics in Beijing . . .

Michael Phelps.

. . . is also in a unique position, with enormous power to

SWEATSHOP

, who have no voice. Producing official Olympic sponsored goods under humane conditions and respecting China’s labor laws and the core internationallyrecognized worker rights standards would be a terrific place to start.

National Labor Committee 75 Varick Street, Suite 1500 New York, NY 10013 Tel: 212.242.3002 Fax: 212.242.3821 nlc@nlcnet.org www.nlcnet.org

NOVEMBER

Research:

Charles Kernaghan, Jonathann Giammarco, Barbara Briggs, Alexandra Hallock

Design:

Tomas Donoso

Printing:

AFSCME DC 1707 - Labor Donated

olympic sweatshop A Real Olympic Sweatshop – Summary

1

Guangzhou Vanguard Water Sport Products Company Ltd. Profile

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Forced to Work a 23 ½Hour Shift Producing swim masks and goggles for export to the U.S.

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Hours

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Blatant Violation of China’s Laws

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Wages

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Workers Paid Less Than Two Cents For Each Speedo Mask They Assemble

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Workers are Exhausted by Long Hours and Grueling Production Goals

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Cheating the Workers at Every Turn

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The Big Cheat Goes On —All of it in Broad Daylight and All of it Illegal

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Health and Safety Violations: Working with Dangerous Corrosive Chemicals

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Chinese Workers Kept in the Dark Regarding Toxic Paint and Chemicals

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Speedo’s Olympic Sponsorship

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Living in Squalor in Primitive Company Dorms

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Company Food is Awful, Workers Try to Survive on 38 Cents per Meal

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Workers Without Hope

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Is there a Labor Shortage in China?

A different perspective from the viewpoint of the workers.

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What Speedo and the Other Companies Must Do

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SPEEDO IN CHINA

A Real Olympic Sweatshop by Charles Kernaghan Speedo may be the top-selling and best-known swimwear brand in the world, and an official sponsor of the upcoming 2008 Olympic Games in China. But workers in China producing Speedo sporting goods are drowning in abuse. Toys ‘R’ Us and Carrefour are also implicated in this sweatshop scandal.

Surely among the qualities characterizing a great Olympic athlete are dedication, endurance, focus and constant perseverance, especially in the face of adverse conditions. As Lance Armstrong put it, “Pain is temporary, while quitting is forever.” But even with these high standards and commitment, how many Olympic athletes could endure what China’s sweatshop workers suffer day in and day out?

“What lies in front of us,” one worker said, “is a blanket of darkness. We have no hope.”

Guangzhou Vanguard Water Sport Products Company Ltd in Guangzhou, China produces swim gear and sporting goods for Speedo, their major client, Toys ‘R’ Us, the giant French retailer, Carrefour and others. There are 400 workers in the plant, which used to employ several child laborers, but they were fired this summer.

Forced Overtime: During the peak season, which can last up to nine months, the routine shift is 14 ½ hours a day, from 8:30 a.m. to 11:00 p.m., seven days a week. Workers report going for months at a time without a single day off. All overtime is mandatory. There are also frequent 15 ½ hour shifts to midnight, and even 17 ½ hour

shifts that don’t end until 2:00 a.m. (which are most common with the Speedo production). There are also grueling, forced 24-hour shifts. Workers are routinely at the factory over 100 hours a week. At a minimum, the forced overtime hours required—44 overtime hours per week—exceed China’s legal limit on overtime by 430 percent! Standard working hours during the peak season are 84 to 91 hours per week.

One worker, forced to toil a 23-hour shift at a compression molding machine, actually shed tears as he described how exhausted he was, and terrified that his hands would be crushed by the relentless motion of the machine if he slowed down for even a second.

To appease the gullible North American auditors from Speedo and the other companies, workers are prohibited from punching their timecards after 7:00 p.m. or on Sunday.

Grueling pace of production: Workers assigned to the compression molding machines, which form the swim masks, must complete one operation every nine to twelve seconds, 310 to 410 per hour and 3,720 to 4,920 operations during the daily 12-hour shift.

Production line workers are allowed just one-anda-half minutes to assemble each Speedo “Condor” swim mask for which they are paid less than two cents.

Supervisors Abuse the Workers: Supervisors constantly scream at the workers, calling them “idiots” and “garbage” if they are not moving fast enough.

Workers are prohibited from talking back. One worker, who tried to defend himself by answering back to a supervisor in January, was attacked, choked, beaten and fired. Workers have no voice.

Twenty or so workers who went on strike in response to rumors that management was going to cut their already low piece-rate were immediately fired and thrown out of the factory without their back wages or severance pay.

Workers Exhausted: Workers are so exhausted by the long hours and grueling production goals seven days a week that they often return to their dorms after work only to collapse into bed and fall asleep with their shoes and clothes still on—this despite the fact that the dorm rooms are scorchingly hot.

Workers Cheated of 40 Percent of Their Wages: The legal minimum wage in Guangzhou is 60 cents an hour, $4.77 for the regular eight-hour day and $23.87 for the legal 40-hour week. The Guangzhou Vanguard Water Sport Products Company factory however pays by piece rate and pays no overtime premium—which is required by law—even though its workers are routinely forced to toil 44 to 51 hours of overtime a week. The legal premium in China for weekday overtime is 50 percent, 90 cents an hour, and 100 percent, $1.19 an hour, for weekend overtime. Working just 84 hours a week, which is the low end of the spectrum at the Guangzhou Vanguard Water Sport Products Company factory, the workers should be earning $70.43. But, Guangzhou Vanguard factory management pays them just $41.32, meaning they are being cheated out of $29.11 in wages legally due them each week—over 40 percent of what they are owed! This is an enormous amount of money for these poor workers, whose regular weekly pay is just $23.87. In fact, the workers are earning on average just 49 cents an hour—including all the grueling overtime hours— while the legal minimum wage is 60 cents an hour.

Workers Cheated at Every Turn • Despite the fact that the workers are being cheated of the legal overtime premium due them, failure to show up for even one overtime shift will result in the loss of nearly two weeks’ wages. Repeat “offenders” will be fired.

• Workers are forced to sign a “model” employment contract which they are prohibited from reading, lest they learn their legal rights.

For example, the workers have no idea what their piece rate is or how many pieces they complete each month, leaving them clueless as to how their wages are calculated or what they are really owed.

• In another direct violation of China’s laws, workers are not inscribed in the government’s mandatory health and work injury insurance.

Injured workers may simply be fired.

• There are no paid maternity leaves, no paid national holidays, no paid sick days.

Workers Handle Dangerous Chemicals: The heavy, pungent stench of oil paint in the Spray Paint Department often makes the workers choke.

The workers have no idea if they are using lead paint or not. In the Silk Screening department, where logos are painted on the swim gear, the workers routinely handle potentially dangerous chemicals, including a solvent which the workers say causes their skin to burn and fester if even a drop of it touches their body. The workers do not even know the names of the chemicals they use, let alone their health hazards or how to respond in case of an emergency.

SPEEDO IN CHINA

Primitive Company Dorms: Seven or eight workers share each 14-by-19-foot dorm room, sleeping on double-level bunk beds that line the walls. There is no other furniture in the rooms— no chairs, no tables, no bureaus. The rooms reek of perspiration, since the dorms are scorchingly hot during the long summer months, especially because the sheet metal roof draws and holds the heat. The workers sarcastically refer to their dorms as “sauna.” The workers are dripping in their own sweat all day, both in the factory and in the dorm.

The shared bathrooms are filthy. Due to a shortage of hot water, workers wishing to wash must heat their own water on a makeshift wood stove they set up using an old oil drum. Workers carry small plastic buckets of hot water back to their rooms where they take a sponge bath.

Eating on $1.52 a day: The food served in the company cafeteria is so awful that the vast majority of workers choose to eat in the cheap fast food stalls that line the busy highway in front of their factory.

The stands are often unhygienic and the food non-nutritious. Still, for about $1.52 a day, the workers can purchase three small meals a day and a nighttime snack.

Without hope—Life is just Work and Sleep: Workers say they live from day to day, without security or hope. “What lies in front of us,” one worker said, “is just a blanket of darkness. We have no hope.”

SPEEDO IN CHINA Guangzhou Vanguard Water Sport Products Company Ltd. (Also registered under the name: Guangzhou Sheng Feng Ltd. Company) Sheng Feng Ltd. Company 16 Haokezhou Dongjie, Shixi Village Guangzhou, Guangdong Province China (There is also a subsidiary factory located in Shiling Town in Guangzhou Huadu District.)

Production: Swim products such as goggles, masks, snorkels, ear and nose plugs, boat cushions, plastic hardware, bathing suits and caps Labels: Speedo makes up the largest proportion of the factory production, and it is produced year round. The giant French retailer Carrefour, is also prominent with several large orders – 100,000 pieces or more – placed each year. Other labels include Toys ‘R’ Us, Polyotter (GNC) of the United Kingdom, Cressi of Italy, and Zoggs of Australia. The factory’s privately owned label is called “Wave.”

Number of Workers: Four hundred; aged 16 to 45 years; approximately half men and half women.

According to the workers, some children were also employed at the Guangzhou factory, but they were dismissed this last summer as the slow season began.

Factory entrance.

All factory photographs and corporate packaging materials were smuggled out of the factory.

SPEEDO IN CHINA

SPEEDO IN CHINA

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SPEEDO IN CHINA Forced to Work a 23 ½Hour Shift Producing swim masks and goggles for export to the U.S. Tears actually fell from this young worker’s eyes as he described the sheer exhaustion and terrible fear that his hands might be crushed, forced to work a 23 ½ hour shift at a dangerous compression molding machine, racing to complete one operation every nine seconds.

“I had less than a half hour before I could get off work, and I was beginning to get excited. In less than 30 minutes I would be able to rest. However, the shift supervisor came in from the work room and hurriedly announced: ‘Today you must finish all of the products on the overtime shift.’ He turned to me and said: ‘You. You must finish 6,000 pieces before you leave.’ Oh God! I thought. I’m not going to be able to sleep! Our machine can only process a little over 300 products an hour. If you turn the machine’s speed up to the highest setting, you can work a little over 400 pieces per hour, but working at the fastest speed is dangerous. The machine moves too fast and your hands may get crushed by the machine if you cannot keep up, causing a life-long disability. To finish 6,000 products, I needed at least 12 more hours of work! Up till now, I had already worked eight hours.”

“You have to know that being afraid does you no good. I understand the factory rules. If you refuse overtime, the factory will take several hundred RMB out of your wage. Exactly how many hundreds they take out I don’t really know. Workers at the factory are not clear on regulations about fines. I just know that they will deduct a lot, so I obey the factory. I set my machine at just about the highest speed and started to work really hard. At 6:00 p.m. I rushed off the factory floor and went to a small hole in the wall restaurant for a three RMB (40 cents) portion of

fried rice noodles, and then I rushed back to the factory to work. I worked to a little after 2:00 a.m. before, I felt that I couldn’t keep my eyes open. Suddenly, the thought of a coworker came to mind. He became sleepy at the machine and crushed his hand. I became afraid. I was afraid that my two hands would not be able to keep up with the tireless pace of the machine and would be lost. I suddenly shut the machine off, and the supervisor immediately came over. I told him I couldn’t do it. Not only could I not keep my eyes open, but I was filled with fear. I had to rest for a little while, otherwise there would be an accident and I would be injured. The supervisor really couldn’t help me though. He told me I could rest half an hour, but I had to guarantee that I would finish everything before morning. I promised him I would. I crawled into a corner of the noisy machine room and I fell asleep immediately. It seemed like no time has passed at all and the supervisor shook me awake. I had to continue. That night was absolutely miserable. I was constantly afraid that I would lose my hands. Thank God nothing like that actually happened to me.”

(This occurred in January 2007, when his department was producing swimming masks and goggles. He worked from 8:30 a.m. straight through to 8:00 a.m. the following morning.)

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SPEEDO IN CHINA Hours The peak, or busy season lasts up to nine months, September through May, though sometimes the months of September and May can be transitional periods as the work ratchets up at the beginning or tapers down at the end. The slow season lasts three months: June, July and August.

During the long peak season the workers are routinely required to put in 14½ hour shifts, seven days a week, going for many months at a time without a single day off. It is even rare for the workers to be let out “early” on Saturday and Sunday. It is routine then for the workers to be at the factory 101 ½ hours a week while actually toiling 84 hours. All overtime is mandatory.

Even this schedule has the workers toiling 44 hours of overtime each week, and 190 3/4 hours a month, which exceeds China’s legal limit on overtime hours (no more than 36 hours per month) by 430 percent!

Conditions can get even worse. In February 2007, the workers reported being kept to 12:00 midnight every night, forced to put in at least a 15 ½ hour shift, seven days a week. Such a schedule would put the workers at the factory 108 1/2 hours a week.

But there were also frequent mandatory 17 ½ hour shifts, and even some 24-hour all-night shifts.

Especially with Speedo production, it is common for the workers to be forced to stay to 2:00 a.m., putting in a 17 ½ hour shift, from 8:30 a.m. to 2:00 a.m. the following day. The 24-hour all-night shifts are rarer, and are required just several times a year.

As mentioned, all overtime is strictly mandatory, and failure to remain working during even a single overnight shift—no matter what the reason— will result in nearly two weeks’ wages—300 RMB ($39.79)—being docked as punishment.

“Offending” workers can also be fired.

Peak Season Hours 8:30 a.m. to 11:00 p.m.

14 ½ hours a day, 7 days a week.

8:30 a.m. - 12:30 p.m.

(Work, 4 hours)

12:30 p.m. - 2:00 p.m.

(Lunch, 1 ½ hours)

2:00 p.m. - 6:00 p.m.

(Work, 4 hours)

6:00 p.m. - 7:00 p.m.

(Supper, 1 hour)

7:00 p.m. - 11:00 p.m.

(Overtime, 4 hours)

Nor are workers given prior notice that overtime will be required. It is common that just minutes before the shift ends, management will instruct the workers that they must remain until 12:00 midnight, 2:00 a.m., or even for an allnight 24-hour shift in order to complete the production goal.

Also, to appease the gullible U.S. corporate auditors—so that the corporate monitoring scam can proceed—the workers are prohibited from punching in their time cards after 7:00 p.m. or on Sundays.

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Blatant Violation of China’s Laws By law the regular workday in China is eight hours, five days a week, for a regular forty-hour workweek.

All overtime must be voluntary, and cannot exceed three hours a day, or 36 hours per month. Moreover, workers must receive at least one day off a week.

Also, all overtime must be paid at a premium: Fifty percent for weekday overtime, 100 percent for weekend work, and 200 percent for work on statutory holidays.

The Guangzhou Vanguard Water Sport Products Company Ltd. and its main clients—Speedo, Carrefour and Toys ‘R’ Us—are blatantly violating every overtime and wage law in China, and evidently doing this in broad daylight and with complete impunity.

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Worker posing with products she makes.

SPEEDO IN CHINA Wages • Base wage of 60 cents an hour.

• Cheated of overtime premium.

• Short changed of over 40 percent of the wages legally due them.

The legal minimum wage in Guangzhou City in Guangdong Province is 780 RMB ($103.45) per month (There are 7.54 RMB to $1.00 U.S.)

Base wage

60

cents an hour

60 cents an hour (.5968) $4.77 a day (8 hours) $23.87 a week (40 hours) $103.45 a month $1,241.38 a year

By law, weekday overtime must be paid at 90 cents an hour ($0.8952) and weekend work at $1.19 an hour ($1.194). The Guangzhou Vanguard Water Sport Products Company operates on a piece rate wage system, and, illegally, pays no overtime premium at all.

($185.68) per month, which comes to just $39.79 to $42.85 per week. On average then, including 44 hours of obligatory overtime, the workers are earning $41.32 each week. This is far below the $70.83 which they are legally owed. For the regular 40 hours of work the workers must be paid at least the legal minimum wage of $23.87. For the four hours of weekday overtime required daily, Monday through Friday, the workers are owed $17.90. For the 24 hours of overtime demanded each weekend, the workers are owed another $28.66. Altogether, for putting in a grueling 84-hour workweek, the workers are owed $70.43, averaging out to a little less than 84 cents an hour, which is hardly an excessive amount of money. But as we have seen, the workers are paid on average just $41.33 a week, or 49 cents an hour, which is well below the legal minimum wage of 60 cents an hour.

Again, all this is going on in broad daylight, with Speedo, Toys ‘R’ Us, and Carrefour – second only to Wal-Mart as the largest retailer in the world – unable to discover that their goods are being produced under criminal conditions which violate every law in China.

As a result, Speedo and other workers are routinely cheated of over $29.00 each week—41 percent—of the wages legally due them. This is an enormous amount of money for the poor workers whose weekly base wage is just $23.87. It is made even worse by the grueling hours and excessive production goals they must endure every day.

During the peak season, the workers report earning 1300 RMB ($172.41), or at most, 1400 RMB

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Workers Paid Less Than Two Cents For Each Speedo Mask They Assemble Eight workers on an assembly line are assigned a mandatory production goal of 4,000 Speedo “Condor” swim masks in the routine 12-hour shift.

Two workers insert plastic sealant into the frame of the mask, which then passes to two other workers who attach the rubber fittings into the frame. At that point, two workers insert a lense onto the frame, and in the final step the remaining two workers install the straps and buckles that allow the mask to be adjusted to tightly fit the diver’s face.

Each hour the eight-person assembly line must complete 333 Speedo “Condor” masks, which, in effect, means that each worker is responsible to complete 42 Speedo masks an hour, or one every one-and-a-half minutes. The pace is relentless, exhausting, numbing and poorly paid. The workers are earning less than 1 ½ cents for each Speedo mask they assemble.

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SPEEDO IN CHINA

Workers are Exhausted by Long Hours and Grueling Production Goals Production goals are arbitrarily set by management, and are routinely excessive. For example, someone operating what the workers refer to as a compression molding machine, making goggles and masks, must complete 310 to 410 operations per hour, or one operation every 9 to 12 seconds. The work pace is furious and dangerous. In the typical 12-hour shift, the worker must complete 3,720 to 4,920 operations, for which he or she is paid less than 2/10ths of a cent per piece. As one worker put it: “Working at the fastest speed is dangerous. The machine moves too fast and your hands might get crushed by the machine if you cannot keep up, causing a life-long disability.”

Under such conditions, when a worker is abused and openly humiliated, they have no choice but to bow their head, keep quiet, and swallow their anger. It is either that or leave the factory and be cheated of the back wages due them. Of course, there is no union in the factory, and the workers simply have no way to protect their own interests.

Supervisors often scream and curse at the workers, calling them “idiots” and “garbage,” if they feel the workers are not moving fast enough, or if they make mistakes. Talking back to a supervisor or factory chief is also prohibited. On January 16, 2007, one of the supervisors yelled at a male worker, scolding him – and humiliating him in front of his friends – for working “too slowly.”

When the worker, trying to defend himself, talked back to the supervisor, the supervisor lunged at the worker, grabbed him by his clothes and started choking him. The worker was beaten up and then fired.

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Cheating the Workers at Every Turn Just as worker complaints regarding exhaustion are widespread at the Guangzhou Vanguard Water Sport Products Company Factory, so too are complaints about the low wages, or as the workers put it, the huge disconnect between the enormous amount of work they produce and the tiny compensation they receive. One worker expressed the common sentiment explaining: “Our boss is a stingy penny pincher. He thinks that anything he can do to avoid spending money on workers is good.”

In fact, the factory is set up to cheat the workers at every turn. When workers enter the factory they are forced to sign a model contract, which they are prohibited from reading, but instructed to simply sign on the dotted line. Unable to read the contract, and certainly not being provided with a copy as demanded by law—the workers have no way to know how their wages and benefits are calculated.

All the workers are told is that they will be paid by a piece rate, but they are not told what the piece rate is. Further, the workers’ paystubs do not even list the number of pieces they have completed. As the workers are kept in the dark, both regarding the piece rates and the total amount of production they completed, there is no way for them to check or question their wages. We have already seen that the workers are being routinely cheated of the legal overtime premiums due to them.

Another serious problem at the factory is that management also simply embezzles the workers’ wages. Factory bosses can cut the workers’ wages at will, taking out as much money as they want and returning what is left. The workers are never told why their money is being taken, and of course, are never given a receipt. The workers suspect that the factory chief keeps the money for himself.

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Questioning management is prohibited. In December, 2006, word spread around the “big lens department”—where the workers mold and assemble swimming masks—that their piece rate was going to be cut. The workers believed that it was the boss’s wife who came up with the idea of lowering their piece rates. They did not even know what their piece rates were. All they knew was that their already low wages were going to be cut further. For the poor workers, this was the last straw, and they went out on a wild-cat strike.

Management responded by firing about 20 workers and kicking them out of the factory without any severance or back wages. (China’s labor law does not grant workers the right to strike, but also does not outlaw such strikes.)

In January 2007, management arbitrarily started withholding several hundred RMB— e.g.300 RMB ($39.79), which would amount to almost 40 percent of the worker’s base wage— each month from the workers’ wages. The money would only be returned after the Chinese New Year in March. Management did this, illegally, to prevent workers—who might be planning on quitting due to the exhausting hours, abuse, and very low wages—from going home for the New Year’s holiday and not returning. Either way, management wins. The workers return, or they do not, in which case management pockets their back wages and severance.

SPEEDO IN CHINA The Big Cheat Goes On —All of it in Broad Daylight • Workers do not receive work injury or health insurance as mandated by China’s laws. If workers are injured on the job, management will pay their medical bills, but will not compensate them for lost wages. By law, workers must be paid during their recovery period based on their average pay for the preceding 12 months, including overtime, benefits, food stipends, nursing fees and transportation. At the Guangzhou Vanguard Water Sport Products Company Factory, it is not uncommon for the injured workers to simply be fired without receiving any of the severance pay legally due to them.

• There are no paid sick days. In fact, workers missing just a few hours a day due, for example, to a quickly rising fever, can as punishment be docked the whole day’s wages.

Under China’s law, the factory must pay sick days at a rate no less than 80 percent of the local minimum wage.

and All of it Illegal

• Even when workers request to leave the factory, they are cheated. Workers must provide 15 days’ prior notice in writing that they intend to quit. It is routine for management to ignore the workers’ requests, delay a response for months or even tear up the request in front of the worker and throw it on the ground. Again, in frustration, most workers simply have to walk away from the factory, but this means they will receive neither their back wages nor the legal severance pay due to them. In this way, more money goes into the pockets of management. Even in the rare case that a worker is given permission to quit, they still have to wait around for weeks, until the 20th of the following month, to receive their back wages.

• Workers can receive statutory holidays, festival days, and vacation time, but illegally, without pay.

• It is the same with the legal right to maternity leave. Women must be allowed at least 15 days before giving birth and 75 days afterwards, or longer days if it is a difficult pregnancy.

Maternity leave must be paid. But here too, factory management blatantly violates Chinese laws.

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Health and Safety Violations: Working with Dangerous Corrosive Chemicals In the silk screening department, where the workers print trademarks and logos onto diving masks, goggles and other diving equipment, the workers often handle dangerous chemicals, which are highly corrosive. The workers say that if even a drop of these chemicals touches their skin, the skin immediately begins to burn and fester. The thinners and solvents the workers use also emit a sharp pungent odor, which makes them choke. These are the most dreaded jobs in the factory, but like everything else in the factory, the workers are kept entirely in the dark. They do not even know the names of the chemicals they are using, let alone their potential serious health hazards.

In the spray paint department, where the workers use spray guns driven by compressed air to paint the products, they also use thinners and other solvents such as benzene. The workers have no idea if they are using lead paint or not.

None of these workers are provided any protective gear, except of course, when the U.S. corporate auditors show up for their “inspections.” Then all the workers are provided with respiratory masks.

One worker who operated a compression molding machine knew of at least five accidents in his department in the last year. Some were “minor” injuries, taking just one to three months for the workers to recover. Others, smashed fingers and burns, were more “serious.” Injuries are more frequent when the workers are forced to work a grueling 17 ½ hour shift, from 8:00 a.m. to 2:00 a.m., which is not uncommon, especially with production for Speedo.

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None of the workers injured on the job were properly compensated for their accidents. Nor does the Guangzhou Vanguard Water Sport Products Company report worker accidents to the local Labor and Social Protection Bureau within 24 hours, as is required by law.

Nor are the workers employed under these hazardous conditions paid any extra compensation.

This is another example of how companies violate Chinese labor laws, which exist on paper, with complete impunity.

In China, the law states that no worker may handle hazardous materials without first receiving proper training on how to safely handle and store such materials, what dangers these substances pose, and how to respond and administer aid in case of an accident. Further, a factory must have a certified safety director who is responsible for the monitoring of safe production. And no one under 18 years of age can under any circumstances be put to work in a hazardous job.

On paper the laws are there, but at the Guangzhou Vanguard Water Sport Products Company Factory they mean nothing, as every law is blatantly violated. In reality, the workers do not even know the names of the chemicals; have no idea what serious health hazards they pose; have no idea regarding how to safely handle these chemicals, or how to respond in case of an accident. Clearly these workers are seen as a cheap commodity, expendable, and not worth investing in.

SPEEDO IN CHINA Chinese Workers Kept in the Dark Regarding Toxic Paint and Chemicals Workers in China are certainly not stupid, and they have suspicions and fears that the chemicals and paints they handle may be poisonous. On a daily basis, many Speedo workers handle burning rubber, plastics, paints, benzene and other potentially dangerous chemicals, but they have no way of knowing if these chemicals are harmful. In fact, the workers are not even informed of the names, let alone the health hazards, of the components and chemicals they use.

The workers also have no idea what laws there are in China to supposedly regulate workplace safety and injury prevention. Further, the workers do not have the slightest idea of what government bureau they could appeal to in order to seek tests to determine if in fact the paints and chemicals they are working with are hazardous or safe.

Finally, turnover is high in these factories, given the harsh conditions, long hours, low wages and the fluctuations in hiring between the peak and slow season.

There is no way of tracking these workers long term once they leave, to follow up on any illness or adverse effects they may be suffering. The workers just disappear into other factories or go home. Even if they were sick, the workers would not know what to do or who to see, and the chances are high that they could not afford a proper medical exam.

China’s labor law requires that all workers exposed to burning rubber, plastics, paints, thinners and other potentially dangerous chemicals be provided a medical examination each year to check their health. The Guangzhou factory simply ignores this, with complete impunity.

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Speedo’s Olympic Sponsorship • “In the Olympic movement, there is no

relationship that is as collaborative as Speedo and U.S.A. Swimming. By working together, both organizations gain broad visibility while driving sales and membership.” (Roger Williams, President, Warnaco’s Swimwear Group, 2004)

• “The world’s largest sporting stage is the

Olympics. We have been a dominant player in the summer games, and this allows us to have a presence at the winter games also and have a presence every two years.” (Craig Brommers, Speedo Vice President, 2005)

• Speedo describes itself as “the largest provider

of swimwear in the United States...” Its parent company, Warnaco stated in its 2006 annual report, “We will take advantage of the momentum in Speedo as we begin to gear up for the 2008 Beijing Olympics.”

• Speedo supports national swimming teams in the United States, Australia, France, Netherlands, Germany, Britain, Japan and Zimbabwe.

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• Some Team Speedo members in the U.S.: Greg Louganis Michael Phelps Natalie Coughlin Amanda Beard Ian Crocker Megan Jeandrick Kara Lynn Joyce Jessica Hardy Katie Hoff Kate Ziegler Ryan Lochte

SPEEDO IN CHINA Living in Squalor in Primitive Company Dorms Company dorm conditions are primitive. Seven or eight workers are crowded into rooms measuring approximately 14 by 18 feet. Other than the double-level metal bunk beds that line the walls, there is no additional furniture—no chairs, tables or bureaus. The workers have no place to store their belongings, which are piled up haphazardly wherever there is room. Security is also a serious problem, as the walls surrounding the workers’ dorms are very low. Some workers report having been robbed of a full month’s wages.

During the long summer, which can last up to eight months, April through November, the workers’ dorm rooms can be scorching hot, made even worse by the sheet metal roof which draws and holds the heat. There are two electric fans in each room, but the workers say they provide no relief.

Those who can afford it purchase their own fans which they place right next to their bunks.

At work as well as in their dorm, the workers are often dripping with sweat. Sarcastically, the workers even refer to their dorm as a “sauna,” remarking that, “the boss has to pay money to visit a sauna, while we get to live in one for free.”

In reality, it is not quite for free, since 35 RMB ($4.64) is deducted from the workers’ wages each month as lodging fees.

When we asked the workers how they could sleep in such sweltering temperatures, they responded:

“Listen, we are worked nearly to death every day, and if it were even hotter, we would still be able to sleep from sheer exhaustion.” Some workers are so exhausted from the long shifts, that when they get back to their room they immediately climb into bed without taking their shoes or clothing off.

The workers also report that the shared bathrooms are filthy and often omit a sickening stench.

Bathing is also a problem. There is just one hot water heater for the nearly 200 men who share the male dorm. To bathe, the workers must fetch hot water with a small plastic bucket, which they carry back to their rooms where they take a sponge bath. But with so many workers, the hot water runs out quickly.

To make up for the shortfall, the workers had to scavenge an old oil drum, which they turned into a makeshift wood burning stove, in order to heat their own water.

“Our boss is a stingy penny pincher,” the workers told us. “He thinks that anything he can do to avoid spending money on workers is good. I sweat for him all day, and he cannot bear to spend the money on two more hot water heaters to help us wash off the sweat and the stink.”

The workers say their rooms often reek of perspiration.

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Workers’ dormitories.

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SPEEDO IN CHINA

Dorm rooms are primitive and overcrowded with no privacy.

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Workers have no place to store belongings and no place to sit other than in beds.

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SPEEDO IN CHINA

Toilets are often dirty holes in the floor.

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Wash room. Three workers can wash at a time. Not showers - note elevated faucets. Workers bathe out of buckets. Hot water frequently runs out.

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SPEEDO IN CHINA

Workers have to heat water using a make-shift stove made from an old oil drum.

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Workers wash clothes on outside stone bench.

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SPEEDO IN CHINA

Workers wash their clothes by hand and hang them to dry.

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SPEEDO IN CHINA Company Food is Awful, Workers Try to Survive on 38 Cents per Meal The workers describe the factory’s cafeteria food (for which the company charges 2.5 to 3.5 RMB - 33 to 46 cents - per meal) as being really awful.

Almost everyone chooses instead to eat outside, in what the workers refer to as hole-in-the-wall fast food stands which line the nearby highway. Often these food stands lack even the most rudimentary hygiene. Nor is the food nutritious, but it is cheap and tastes better than the factory fare. On average, all the workers can afford to spend on food is about $1.52 per day.

For breakfast they will have a steamed bun with soy milk, which costs about 23 cents. For lunch and supper they will typically purchase a box meal, with rice and a little meat and some vegetables, or rice noodles. On average, these meals cost 53 cents each. When they get off their long shift, the workers will have a late night snack, typically bread, which will cost them another 23 cents.

Even for this cheapest food, the cost is still $1.52, which may sound tiny, yet it actually absorbs twoand-a-half hours’ wages each day, as the workers earn just 60 cents an hour. Each month then, the workers spend at least $46.36 on food.

Other basic necessities, such as soap, laundry detergent, personal hygiene products, occasional medicines, clothing and cigarettes, cost about 200 RMB per month, or another $26.53.

The workers will never spend money on entertainment. In the dorm there is a TV room, but it lacks chairs and tables, and the television is often out of order. In January 2007, the TV was

working but if the workers wanted to watch it they either had to stand or sit on the floor.

Every worker told us that their life was just to work and sleep. There was nothing more.

Another example speaks volumes about the desperate poverty of these factory workers, and the great sacrifices they endure to support their families.

These are migrant workers from rural areas who have traveled hundreds, if not thousands, of miles south to seek work in the export assembly factories. The only way they can communicate with their parents, children, or spouse is by phone. With a discount phone card, calls are cheap in China, with a long distance call costing a little over three cents a minute.

Yet the workers will never let themselves speak with their families for more than five minutes, limiting themselves to less than 17 cents per call. If they call just twice a week they can keep the cost to less than 34 cents a week, or $1.47 a month.

Even the most minimal expenses described above— $4.64 a month for the dorm, $46.36 for food, $26.53 for household necessities, and $1.47 to call home— still amount to $79, which is a little over 76 percent of their monthly base wage of $103.45 The migrant factory workers have left home for one reason: to make enough money to send back home to help their families survive. But even working 12 hours a day, seven days a week, and even after going for months at a time without a single day off, the workers said they could only afford to send home between 1,000 and 1,500 RMB ($132.63 to $198.94) every two or three months. On average then, despite 33

the grueling hours and wildly excessive production goals, these workers can send home only $66.31 per month, and only during the nine months of the peak season. During the slow season they barely make enough to survive. So the workers at the Guangzhou Vanguard Water Sport Products Company are sacrificing their lives to save and send home $597 a year.

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SPEEDO IN CHINA

Workers Without Hope When questioned, the workers explain they live from day to day, without security or hope. The workers have no idea what the next day will bring.

They could be unemployed, suffer an injury at work or fall ill, or face a family crisis back at home.

The most the workers could hope for is “simply not to have a calamity.” As one worker put it: “What lies in front of us is a blanket of darkness.

We have no hope.”

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Is there a Labor Shortage in China?

A different perspective from the viewpoint of the workers.

A lot has been written in the mainstream press about the growing labor shortage in the South of China, especially in Guangdong province. It seems that China is running out of workers, and that factories are engaged in a sort of bidding war, pushing up wages in order to keep their employees.

minimum wage increases, but local authorities have been less than effective in monitoring and enforcing the new minimum wages. Too many factories, like the one producing for Speedo, Carrefour and Toys ‘R’ Us, feel confident that they can violate the law with complete impunity.

From the perspective of the workers, the situation seems somewhat more complex. Millions of young migrant workers from rural areas have traveled south in search of work in the booming export assembly factories. Once there, they find themselves trapped in inhumane conditions, forced to work long hours, suffering abuses, and paid very low wages. Their wages are rising, but not as fast as the rate of inflation. Many of the rural migrant workers come from farming areas and have a low level of education.

They also lack technical skills.

Many factory workers do not know the law, and even if they did, without the right to organize independent unions, they have little power to improve conditions.

On the other hand, the factory owners refuse to invest in training their workers, or raising wages and providing greater security. The turnover rate is high in China. Owners fear that if they train their workers, once trained, the workers will pick up and leave in search of better jobs and pay.

It seems like a vicious cycle, with many factories stuck in this low-wage model, choosing to lose workers rather than invest in training, better wages, and benefits. There is also no doubt that the U.S. based multinationals are applying enormous pressure on their suppliers in China to constantly cut production costs.

On the other hand, local governments in China have not done a good job either. In Guangdong province for example, there has been a series of annual 36

Rumors are now spreading that the factory will close and relocate production to Qingyuan City in the north of Guangdong Province, where wages are even lower than in Guangzhou.

SPEEDO IN CHINA What Speedo and the Other Companies Must Do Olympic sponsors should not be promoting sweatshops.

• Speedo and the other companies should

not “cut and run,” pulling their production from the Guangzhou Vanguard Water Sport Products Company factory, which would only further punish the workers, who have already suffered enough. Speedo and the others should keep their work in the factory while they work with their contractor to clean up the plant and guarantee that the legal rights of the abused workers are finally respected. The workers should receive the back wages and benefits they were cheated of.

• Speedo, Toys ‘R’ Us, Carrefour and the others

have demanded and won all sorts of enforceable laws, backed up by stiff sanctions, to defend their trademarks and corporate products. Speedo and the other companies should stop blocking the extension of laws to protect the rights of the human being similar to those currently afforded to corporate products. If Speedo’s trademark is protected by enforceable laws, we should certainly be able to similarly protect the legal rights of the human being who makes the Speedo product.

• Speedo and the other companies should release the names and addresses of the factories they use in China and elsewhere to produce the goods they ask the American people to buy. If Speedo and the others are not trying to hide even more abusive sweatshop conditions in other contractors’ plants, why would they be afraid to disclose factory names and locations?

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SPEEDO IN CHINA COMPANY CONTACT INFORMATION

Warnaco Group Inc.

Warnaco Swimwear Inc.

501 7th Ave. New York, NY 10018

6040 Bandini Blvd.

Commerce, CA 90040

Phone: (212) 287-8000 Fax: (212) 287-8297

Phone: (323) 726-1262 Fax: (323) 721-3613

www.warnaco.com Sherry Waterson, President, Speedo North America, Warnaco Swimwear Charles R. Perrin, Chairman, Warnaco Group Inc. Joseph R. Gromek, President and CEO, Warnaco Group Inc.

Pentland Group Plc

Speedo International Ltd.

8 Manchester Sq. London W1U 3PH United Kingdom

8 Manchester Sq. London W1U 3PH United Kingdom

Phone: +44-0-20-7535-3800 Fax: +44-0-20-7535-3837 Email speedoinfo@pentland.com

Phone: +44-0-11-5916-7000 Fax: +44-0-11-5910-5005

www.pentland.com Robert Stephen Rubin, Chairman Andrew K. Rubin, Chief Executive

Toys “R” Us, Inc. 1 Geoffrey Way Wayne, NJ 07470 United States Phone: (973) 617-3500, Fax: (973) 617-4006 www.toysrus.com Gerald L. Storch, Chairman and CEO, Ronald D. Boire, President, U.S. Toys

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Carrefour SA 26, quai Michelet, TSA 30008 Levallois Perret 92695 France Phone: +33-1-5863-3000 Fax: +33-1-5863-6750 Email investisseurs@carrefour.com www.carrefour.com José-Luis Duran, President, Management Board Carrefour—the world’s second largest retailer after Wal-Mart—recently announced a 3.3 percent leap in its net profits during the first half of 2007, to $969.2 million. Carrefour refers to China as a “star performer” with regard to the continued record sales growth of its stores in China.

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SPEEDO IN CHINA China: Swimwear Giant China is now the world’s largest swimwear exporter, accounting for a full 70 percent of total global market share. In 2005, China exported 259 million pieces of swimwear. China’s swimwear exports to the U.S. reached $79 million in 2005, a 500-fold increase over 2004.

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National Labor Committee 75 Varick Street, Suite 1500 New York, NY 10013 Tel: 212.242.3002 Fax: 212.242.3821 nlc@nlcnet.org www.nlcnet.org

“The world’s largest sporting stage is the Olympics. We have been a dominant player in the summer games, and this allows us to have a presence at the winter games also and have a presence every two years.”

Craig Brommers, Speedo Vice President, 2005

SPEEDO

PLEASE

SPEAK !

U

ATHLETES

AGAINST SWEATSHOP ABUSES.

Michael Phelps.

GregLouganis MichaelPhelps NatalieCoughlin AmandaBeard IanCrocker MeganJeandrick KaraLynnJoyce JessicaHardy KatieHoff KateZiegler RyanLochte