Chong Won Factory Workers Criticize Wal-Mart For Failing to Renew Order

From Financial Times:

Workers in the Philippines who were sacked for going on strike have criticised Wal-Mart for its decision not to renew orders from their factory, in a case that is testing the retailer’s efforts to use its buying power to improve the ethical standards of its global supply chain.

The world’s largest retailer allowed its contract with the Chong Won factory outside Manila to expire last month and has said it will not renew it unless management meets a series of conditions. The conditions require the reinstatement of 117 sacked workers and the opening of discussions towards establishing a collective bargaining agreement with their union.

The 117 workers were sacked after going on strike in September in an attempt to force the management to reach a collective bargaining agreement.

Resurreccion Ravelo, head of the striking union, has urged Wal-Mart, in a letter, to continue to work with the factory and accused the company of preparing to abandon efforts to resolve the -dispute.

Amy Wyatt, a Wal-Mart spokeswoman, said the company “has not placed any additional orders but if they meet conditions then we will . . . If they don’t, we will work with our supplier to make sure factory workers are paid what they are legally owed”.

Wal-Mart is the only international customer of the South Korean-owned factory, where workers, paid about Dollars 5.60 (Euros 4, Pounds 2.80) a day, produce clothing for its One Step Up brand.

It has continued to buy from the Chong Won factory during the dispute rather than following other customers - including Gap and Target - who pulled out, and has sought to mediate between the employer and the union.

Wal-Mart imposed the conditions on new orders after an independent report on the dispute by Verite, the non-profit social auditing group.

The report, published last month, substantiated earlier claims by non-governmental organisations and labour rights activists that Chong Won’s management had a record of aggressively attempting to prevent employees from exercising their legitimate right to set up a union at its factory.

But Bob Jeffcott of the Maquila Solidarity Network, an international labour rights group, which has been in talks with Wal-Mart over the issue, said Wal-Mart’s conditions fell short of a direct call to allow collective bargaining with the workers’ union, which was at the centre of the dispute.

“The key issue is to -negotiate a collective agreement with the union. This is the issue that sparked the strike in the first place,” he said. Mr Jeffcott said his group wanted Wal-Mart to offer incentives of future work to Chong Won’s management. “We don’t want (Wal-Mart) to leave this factory without trying to find a solution . . . There has been progress, but that progress will be lost if they don’t take the next step,” he said.

Posted by Alex Goldschmidt on Thursday, June 07, 2007

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