Factory shutters in shame

Workers walk past a closed Zongtex Garment factory near Veng Sreng Boulevard in Phnom Penh on Wednesday. Pha Lina

Factory shutters in shame

Phnom Penh Post | 11 April 2014

 

The Zongtex Garment factory off Phnom Penh’s Russian Boulevard looks like a nondescript residential compound, hidden down a dead-end road. There are no signs suggesting that it supplied to some of the world’s leading high street names – and the US military.

Taiwanese-owned Zongtex Garment Manufacturing made clothes for Sears, Macy’s, the Moret Group, Komar Brands and Costco, according to a Worker Rights Consortium (WRC) audit released last month. It also supplied to the US military’s Army & Air Force Exchange Service.

Allegations in the WRC audit – the result of a years-long investigation – range from union busting to child labour and poor occupational safety, with one worker reporting that she soiled herself at her sewing machine because she was not permitted to use the bathroom. According to the WRC report, while its main facility near Veng Sreng Boulevard was registered with the Ministry of Labour, the Garment Manufacturers Association of Cambodia and the International Labour Organisation program Better Factories Cambodia (BFC), its second factory operated under the radar.

When Post reporters visited the factories this week, both were empty.

According to a Zongtex supervisor, the factories shuttered their doors on March 21 after an ILO inspection. 

“It was shut down soon after the ILO came to bring an underage girl out of the factory,” Srey Mao said.

An ILO representative declined to comment on the alleged removal of the minor from the factory in March, while one buyer said Zongtex had notified it of forthcoming closure in December, the same month that the New York Times ran an exposé of suppliers to the military, referencing the WRC audit.

Mao said the workers had gone on strike before Zongtex’s closure, calling for benefits to be reinstituted, including mandated seniority bonuses.

“One of the big incentives for particularly ruthless factory owners is to avoid seniority benefits that workers have accumulated,” Joel Preston, a consultant for the Community Legal Education Center (CLEC), said.

Bent Gehrt, WRC field director for Southeast Asia, who has monitored the factories since the investigation was launched in 2010, said the report’s release was delayed after Zongtex showed signs of improvement, only to renege on promises.

“For a while, it seemed like they were doing something to make changes. We prefer to issue reports that are more positive,” he said. “They were starting from a very low base, but we wanted to give them more time.… They were never sincere.”

The report found “Zongtex management … illegally terminated workers in retaliation for their exercise of freedom of association,” referring to early attempts to form a union after the company took over the factory in 2010 from another company, Perfecta.

The audit also found that Zongtex repeatedly ignored legally binding decisions made by the Arbitration Council.

Zongtex management could not be reached.

“It seems to be the kind of factory that doesn’t really care about anything, and the buyers also don’t seem to care,” Gehrt said.

Several brands and retailers contacted said they were unaware of the allegations.

Jim Sluzewski, a Macy’s spokesman, said he had “asked Planet Gold for its response to the allegations”, referring to a buyer from Zongtex that supplies to Macy’s. Planet Gold could not be reached.

Amanda Coryer, spokeswoman for the Moret Group, which makes clothing for Disney and DKNY, among others, said the firm relies on reports from the ILO and Worldwide Responsible Accredited Production (WRAP), a certification body. 

“Although we were not previously aware of the allegations contained in the WRC report, had we been made aware, we would have demanded that Zongtex immediately correct those unacceptable practices or risk losing our business,” she said.

Costco and the Army & Air Force Exchange Service said that they no longer sourced products from Zongtex. Representatives of Sears could not be reached.

The ILO said buyers need to approach it to find out about their suppliers’ records, while WRC’s Gehrt was critical of firms relying on the WRAP certification process.

“I, of course, don’t know whether WRAP simply ignored its own findings or just failed to do due diligence when it certified the facility,” he said. “It may be due to faults in the audit design. It should come as no surprise that interviewing workers inside the factory will not yield much, as the workers are coached not to reveal any violations.”

Russell Jowell, WRAP communications manager, said the group had carried out several audits of the registered Zongtex factory since July 2010. “As of November 2013, we were continuing to engage with the facility and issued a certificate, which was subsequently revoked when a follow-up audit in March 2014 found that the factory had been shut down.”

Heng Mom, 32, a former employee at Zongtex, said she had found a new job after the factory did not renew her short-term contract.

“It’s just a bit better than Zongtex, if we’re talking about the heat. At Zongtex, it was hot and we felt a bit dizzy when working,” she said.

When the owner told employees the factory would close down, “Zongtex was telling workers that they will have a new boss and recruit new workers”, Mom added.

But Gehrt said he was suspicious that the current closure could be a way for the factory to open under a new name, but with the same management. 

The workers “didn’t know [about the 2010 takeover] for two months, until they got their pay slips”, he said. “That could happen again.”

Ken Loo, GMAC’s secretary-general, said Zongtex might not be breaking the law if the second factory was an extension of the first.

“If it … operates as a separate legal entity, then it is required to register with BFC,” he said.

But Gehrt questioned GMAC’s position on the legalities of undisclosed factories.

“I don’t know if Ken Loo was aware of the fact that Zongtex II was located several [kilometres] away from Zongtex I,” he said. “But if he was aware of that, then I really don’t hope that it is GMAC’s position that as long as a factory owner doesn’t register the facility, it is all fine to have production going on at such an undisclosed location.”

Charlie Komar, CEO of Komar Brands, said he was “extremely concerned” to learn of the WRC’s findings.

“Our representatives have visited the facility on several occasions and filed inspection reports to ensure compliance with our code of conduct. In addition, we require an annual WRAP certification,” he said, adding that an unannounced ILO visit to the factory in February 2013 “directly contradicted” the WRC report.

But Gehrt said that since a joint inspection with BFC in 2010, he “never got the impression in subsequent conversations with [BFC] that they viewed the issues at Zongtex as resolved or that Zongtex was in any way a good model factory”.

Jill Tucker, chief technical adviser at BFC, said the “report for Zongtex [Critical Issues] will appear in our June 2014 report”, adding that no details could be disclosed until then.

But Zongtex’s second factory was not subjected to the same inspection regime.

“These [hidden] factories are very common,” CLEC’s Preston said. “Many of these factories are not covered by BFC monitors, conditions are often terrible, and major brands refuse to acknowledge
their existence.”