Archive

For Immediate Release

February 27, 2023

Contact: Rachel Cohen, GLJ-ILRF: racohen78@gmail.com

 

REPORT: Big Fashion Founding Families, Investors Cash In On Wage Theft 

Asian Unions and Allies Launch Campaign to Stop Nike, Levi’s and VF Corp. From Funneling Stolen Pandemic Wages toward Buybacks that Enriched Owners, Wall Street

Register for the press call on Tuesday, February 28 at 9:00 AM ET / 7:30 PM IST / 9:00 PM ICT: https://us02web.zoom.us/webinar/register/8916767074099/WN_I7-pu3rASn-Bvb1yHxAGVA

 

WASHINGTON – Labor Unions in six countries in South and Southeast Asia are joining forces to demand an end to stock buybacks by US-based Big Fashion companies after years of unpaid wage claims. These unions and their global allies, Asia Floor Wage Alliance (AFWA) and Global Labor Justice-International Labor Rights Forum (GLJ-ILRF), are launching their “Fight the Heist” campaign with a new report that reveals how Nike, VF Corp. and Levi’s and their wealthiest investors are profiting through wage theft from workers in their Asian supply chains.  

The report “Big Fashion Investors Cash In on Wage Theft,” released today, shows that after quickly bouncing back from a brief pandemic slowdown in 2020, Nike, VF Corp. and Levi’s executives and investors have seen their profits skyrocket through stock buybacks and dividends. Meanwhile, the vast majority of garment workers, who lost on average 22% of their normal wages in 2020, have received no payback and remain in permanent crisis, with many factories continuing to steal overtime pay or pay subminimum wages. 

 Share buybacks in other sectors, like the airline and semiconductor industry, have recently come under scrutiny. Senators and members of Congress are proposing legislation to rein in Wall Street’s expansive efforts to reward investors. However, there’s been little notice of Big Fashion’s lavish payments to investors as garment workers struggle to survive.

“At the same time that workers lost wages en masse, Big Fashion made record profits and brands paid themselves millions through stock buybacks. The Nike-owning Knight family, for example, paid themselves $74 million in dividends while garment workers literally could not survive,” said GLJ-ILRF Executive Director Jennifer (JJ) Rosenbaum. “The campaign is demanding that brands negotiate a forward-looking solution to transform their supply chains for workers, pay back the money garment workers lost and end stock buybacks until workers are made whole.”

Nike and Levi’s increased their share buyback programs in 2022. Nike authorized a new $18 billion dollar buyback program ($3 billion more than before), Levi’s approved a $750 million share repurchase program ($650 million more than before). VF Corporation paused and reinstated its existing share buyback program in 2021, and projects spending $7 billion on share repurchases in the next four years.

“At the start of the pandemic, I was furloughed for weeks at a time and lost all my savings,” said Netra, who makes Nike apparel at a factory in Indonesia. “My factory never paid my back wages and I’m struggling to send the money my parents and siblings rely on. Nike should ensure factory owners pay us fairly for the work we’ve done.”

The new report follows up on a 2021 AFWA report, “Money Heist,” that surveyed thousands of workers at the beginning of the pandemic in 189 factories that make clothes for some of the world’s largest brands. The report documented at least $164 million in lost wages as garment producers skirted national laws on worker pay. 

In late 2022, investigators returned to dozens of factories from the first report and found:

  • Nine in ten factories have not resolved workers’ COVID wage claims from 2020.
  • More than half of factories are not paying workers owed overtime, beginning in 2020 onward. 
  • One in five factories are not paying workers minimum wages or owed benefits.  

Taking data collected as representative of a likely overall trend, the total potential COVID wage claims for Nike, Levi’s and North Face parent company VF Corporation in just the six surveyed countries (Bangladesh, Cambodia, India, Indonesia, Pakistan and Sri Lanka) could be as much as $427 million.

“The pandemic was a global shock that has had a severe impact on the health and finances of garment workers,” said AFWA International Coordinator Anannya Bhattacharjee. “The industry looks for every possible opportunity to push its risk and losses onto workers with the fewest options and least bargaining power. But workers are fighting back and linking arms with workers in the US to demand that these companies pay them what they are owed before they make lavish payouts to investors.”

Asian garment unions, AFWA, GLJ-ILRF and other allies are calling on these Big Fashion companies to: 

  • Sit down with garment workers and their unions for a systematic investigation of COVID wage claims, including specific impacts on women workers. 
  • Stop billionaire payouts from dividends and stock buybacks until all garment workers are repaid their lost wages.
  • Transform their global supply chains to provide living wages for all workers.

Unions representing workers at Nike factories today filed an OECD complaint with the US National Contact Point. It alleges that Nike has contributed to “severe human rights impacts” for garment workers in its supply chain but has not addressed and remediated the impacts according to the OECD Guidelines on Responsible Business Conduct. Nike has not responded to unions’ requests for dialogue about these impacts, which the Guidelines call for. 

If the US NCP approves the complaint, the NCP will formally invite Nike to dialogue with the unions about their demands and facilitate a dialogue process.

You can read the full “Big Fashion Investors Cash In on Wage Theft” report here

You can read more about the OECD complaint here.

 

Get more info on the campaign on our press call on Tuesday, February 28 at 9:00 AM ET / 7:30 PM IST / 9:00 PM ICT

Zoom registration link: https://us02web.zoom.us/webinar/register/8916767074099/WN_I7-pu3rASn-Bvb1yHxAGVA

 

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Asia Floor Wage Alliance (AFWA) is an Asian labour-led global labour and social alliance across garment producing countries (such as India, Indonesia, Sri Lanka, Cambodia, Bangladesh) and consumer regions (USA and Europe) for addressing poverty level wages, gender-based violence, and freedom of association in global garment production networks. 

Global Labor JusticeInternational Labor Rights Forum (GLJ – ILRF) is a non-governmental organization that works transnationally to advance policies and laws that protect decent work; to strengthen freedom of association and workers’ ability to advocate for their rights; and to hold corporations accountable for labor rights violations in their supply chains. 

 

Global Labor JusticeInternational Labor Rights Forum joins the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF), the  International Trade Union Confederation (ITUC), and trade unions around the world in condemning the guilty verdicts and prison sentences in Cambodia for nine labor rights defenders and leaders of the Labour Rights Supported Union of Khmer Employees (LRSU) including LRSU President Chhim Sithar.  The charges are rooted in lawful union actions related to an ongoing labor dispute at the NagaWorld Casino Hotel. Organizing and campaigning for access to national law and international labor standards for workers should never be a crime.  If this verdict and sentences remain, they risk harm to those charged and sentenced and a broader chilling effect on lawful worker organizing, and an increase in labor rights violations.  

GLJ-ILRF also adds its voice to calls on NagaCorp and its investors to resolve the underlying labor issues including reinstating terminated workers and engaging in good-faith negotiations with LRSU.  As part of this, NagaCorp should also join the calls for Chimm Sithar to be released and the withdrawal of all charges against her and the other LRSU leaders for their labor rights defender efforts.  

For more information on the labor rights struggle at NagaWorld and regular updates, please see the newly released IUF’s web resources which gives the public a detailed history of this labor dispute and is available in English, Khmer and Chinese.

You can read the joint statement from the IUF and ITUC below.

Contact: Rachel Cohen, racohen78@gmail.com

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Global Labor JusticeInternational Labor Rights Forum (GLJ – ILRF) is a non-governmental organization that works transnationally to advance policies and laws that protect decent work; to strengthen freedom of association and workers’ ability to advocate for their rights; and to hold corporations accountable for labor rights violations in their supply chains. 

May 25, 2023

IUF and ITUC Statement on the Verdicts and Prison Sentences for LRSU leaders including LRSU President Chhim Sithar by Cambodia’s Phnom Penh Court of First Instance 

The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF) and the International Trade Union Confederation (ITUC), collectively representing over 200 million workers around the world, strongly condemn the guilty verdicts and prison sentences for 9 IUF affiliate LRSU leaders including President Chhim Sithar. We call on NagaCorp to use its considerable influence to persuade the Government of Cambodia to change course immediately, to release Sister Sithar and to drop all charges against her and the other LRSU leaders. We further call on NagaCorp to reinstate the terminated workers and members of LRSU and to negotiate in good faith with the union. 

Nine members of the Labor Rights Supported Union of Khmer Employees of Nagaworld (LRSU), including LRSU President Chhim Sithar were convicted today for incitement to commit a felony under Articles 494 and 495 of the Cambodian Criminal Code after engaging in a peaceful strike at NagaWorld casino in Phnom Penh. 5 were given 1.5 year prison sentences, 3 were given 1 year suspended sentences, and LRSU President Chhim Sithar was given the maximum sentence of 2 years. Local NGO’s have documented the regular use of these articles to charge and jail activists. The strike was in response to union-busting at NagaWorld casino where in April 2021, the company used the economic impacts of COVID-19 as an excuse to terminate 1,329 workers. 1,100 of these were LRSU members and activists, including the union’s entire leadership. The strike followed all legal procedures and came after numerous attempts to negotiate in good faith with the company were rebuffed. 

From December 31, 2021 to the end of the first week of January 2022, 29 striking workers were arrested. Nine were charged with incitement to commit a felony. One of the nine was released on bail, while the other eight remained in detention. The other workers were released on bail in March 2022. Since February 2022, Cambodian authorities have become more hostile and violent toward the strikers, attacking and harassing them, causing injuries such as black eyes, bloody noses, broken bones, and, in one case, a miscarriage. On April 3, LRSU president Chhim Sithar and other LRSU leaders received a death threat, left as a text on the phone of the brother of one of the representatives. LRSU alerted the UN Office of the High Commissioner for Human Rights and other embassies about the threat. On November 26, 2022, LRSU president Chhim Sithar was arrested and jailed at the Phnom Penh airport upon returning from the ITUC Congress in Melbourne, Australia. Authorities claimed she had breached her bail conditions by traveling abroad. She had, however, never been shown her bail conditions, and had previously traveled to Thailand without incident. 

In March 2022, the IUF filed a complaint with the International Labour Organisation’s Committee on Freedom of Association for violations of ILO Conventions 87 and 98. As a result, the ILO has issued a formal decision urging the Government of Cambodia to ensure that NagaCorp respect labour and trade union rights. In April 2023, the IUF also filed OECD complaints against NagaCorp’s key bondholders for their failure to conduct due diligence under the OECD Guidelines for Multinational Enterprises. The IUF is launching a new campaign website about the struggle at NagaWorld today which gives the public a detailed history of this struggle and is available in English, Khmer and Chinese.