Chong Won Fashion (Philippines)

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UPDATE APRIL 2009: Workers from Chong Won Fashion are facing arrest warrants because of retaliation from the Philippines government. More info is here.

While the workers continue to struggle for back wages and other rights as established by the Philippines law, this factory case is all but over given that the factory has closed and Wal-Mart and other brands have washed their hands of the situation all together.

Below is basic information about Chong Won and for the most recent update, view the Chong Won Fact sheet prepared by the Workers' Assistance Centre.

Who owns it

Chong Won Inc. (now C. Woo Trading)

What they produce

Garments, casual women's and men's apparel

Who they produce for

Wal-Mart Stores, Inc and its supplier One Step Up, but also produces for Oarsmen Sportswear (a university licensee

Address

South Avenue Cavite Export Processing Zone Rosario, Cavite, Philippines

Number of workers

Workforce fluctuated between 250 and 900 in past 6 years

Summary of Problems at the Factory

  • minimum wage violations
  • forced overtime
  • violations of workers' right to unionize and bargain collectively
  • collusion by factory management with government agents in violence against workers engaged in a lawful and peaceful strike

Union Information

Nagkakaisang Manggagawa sa Chong Won-Independent or "United Workers at Chong Won" (NMCW-Ind), the union legally authorized to represent Chong Won employees

Communication with Buyers

According to university disclosure data, Chong Won has produced multiple orders of university logo apparel for Oarsman Sportswear as recently as October of 2006; however, when the WRC contacted Oarsman, company representatives claimed that they could not determine whether they had used the factory. Oarsman has not acknowledged responsibility for code of conduct compliance at Chong Won and has played no role in efforts to address labor rights violations at the factory.

The WRC findings were conveyed to the Chong Won in November 2006 and also shared at that time with Wal-Mart. Wal-Mart and the other buyers have failed to take meaningful action to compel Chong Won to cease its violations of worker rights.

Additionally, Wal-Mart's own audits of Chong Won yielded findings consistent in key areas with the WRC's, but Wal-Mart has failed to take effective action. On November 17, 2006, Wal-Mart announced to the Maquila Solidarity Network (MSN), the International Labor Rights Forum (ILRF), and the WRC that it could apply no additional pressure and would make no further specific requests for corrections until it could conduct another investigation of the case.

Average rate of pay

The regional minimum wage is 272 pesos (US$5.53) a day. However, 30-40% of workers at Chong Won receive less than this.

Reports and More Information About Factory

WRC Report on Chong Won PDF
Business & Human Rights Resource Centre
Maquila Solidarity Network
Wal-Mart's Standards for Suppliers PDF

Code of Conduct Violations
In a series of primary on-site investigations of the working conditions of the factory between Oct 28 and Nov 2, 2006, the Worker Rights Consortium{http://workersrights.org}found that Chong Won was in violation of international laws, Filipino laws, and Wal-Mart's Standards for Suppliers.

Minimum Wages
At the time the WRC visited the factory 30 to 40% of the factory's workforce earned less than the regional minimum wage. These workers received salaries that ranged from 180 to 242 Philippine pesos (US$3.66 - 4.96) for a standard eight-hour workday (or 46 to 62 cents an hour, US). The regional minimum wage is 272 pesos (US$5.53) a day. The WRC's conclusions in this area were supported by discussions with Wal-Mart's local compliance officer, who stated that audits the retailer had previously conducted at Chong Won had yielded similar findings concerning failure to pay the minimum wage and excessive use of apprentices

Working Hours
Compounding these wage violations, all of the employees shown in the payroll with salaries ranging between 180 and 242 pesos a day are also shown to regularly perform overtime (of two or more hours a day). Additionally, a series of Chong Won employee interviews showed that Chong Won workers have been forced to perform overtime without the right to refuse, in violation of the Labor Code of the Philippines. A series of Chong Won employee interviews and examination of the company's payroll records also showed that workers have performed amounts of overtime in excess of what is allowed under university codes of conduct and under Wal-Mart's code. Payroll records as recently as October 11 to October 25, 2006 showed that some employees had performed between eighteen and twenty-seven and a half hours of overtime a week.

Unionization
The WRC found that Chong Won management has engaged in numerous acts of interference, intimidation and retaliation against workers seeking to exercise their right to unionize and bargain collectively. Management violations include: dismissing workers engaged in a lawful strike; employing replacement workers during a lawful strike, which is illegal in the Philippines; colluding with police and other security personnel in the use of intimidation and violence to interfere unlawfully with peaceful picketing; attempting to prevent workers from participating in an official union certification election; refusing to comply with the binding directives of the Filipino Department of Labor and Employment; refusing to bargain with a duly constituted union, as required by Filipino law; demoting and transferring union officers in a retaliatory manner; and illegally aiding the founding of a company union in order to undermine a duly constituted union

Violent Response to Legal Strike
Chong Won employees have been subjected to violence and harassment by agents of the company and of the export zone authority in retaliation for engaging in a lawful strike and picket. When the picketing workers refused to disband, guards hired by the company attacked the striking workers. During the melee, more than 40 workers, the strong majority of them women, were struck by the guards with bamboo clubs. As a result, fourteen workers suffered serious injuries to their heads, arms, and legs. Further incidents resulted in more injuries and unduly interfered with the lawful strike. Moreover, Chong Won sought to terminate the employment of 116 workers who participated in the factory-wide strike. The workers were given "notice of termination" on September 30, 2006.

Illegal use of Contract Workers
By law, contract workers may not be members of a union. Since Chong Won has been hiring primarily contract workers from late 2004 (which is when workers voted to unionize) through the present time, and assigning to these workers the regular work of the factory, Chong Won management has caused the membership of the union to be a fraction of the size it would otherwise be, thus undermining the union's strength and bargaining power. In so doing, management has violated both Filipino law and the freedom of association provisions of applicable codes of conduct because Filipino law prohibits the use of contract workers to perform the functions of regular employees. Additionally, worker interviews, company payroll records and individual employee files show that many contract workers at Chong Won have been held in contract status beyond the legal time limit of one year.