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Investigative reports find serious abuses at Chong Won

March 26, 2007

Worker Rights Consortium report

On February 21, 2007, the Worker Rights Consortium (WRC) released the results of an independent investigation of the Chong Won Fashion Inc. factory in the Philippines detailing extensive worker rights abuses including failure to pay the legal minimum wage, forced and excessive overtime, unlawful use of contract labour, and serious attacks on the right to freedom of association and collective bargaining.

The overwhelming conclusion of the WRC report is that Chong Won's practices violate Filipino law and applicable corporate and university licensee codes of conduct. The WRC found that "with respect to freedom of association, Chong Won's misdeeds are among the most egregious and persistent that WRC investigators have encountered."

The WRC was also highly critical of the response of Wal-Mart and other buyers, calling them "inadequate and ineffective". You can read the WRC's full report here.

Verité report

In December, 2006, despite having already conducted its own internal audit of conditions at the Chong Won factory and having received the preliminary results from the WRC investigation, Wal-Mart commissioned the US monitoring organization Verité to conduct yet another investigation into the situation. Verité's report was delivered to Wal-Mart in the beginning of March, 2007. Wal-Mart's synopsis of the report was released on March 26.

According to the synopsis, the Verité report confirms that the factory has persisently opposed the workers' exercising their rights to freedom of association and collective bargaining. Amongst other things, Verité recommended that the factory withdraw the termination notices for the 117 striking workers and drop its legal actions against the strike.

At the end of Wal-Mart's synopsis of the Verité report, available here, Wal-Mart has attached a Memorandum of Understanding between itself and its supplier One Step Up (who contract work at the Chong Won facility), in which they demand that the 117 workers be fully re-instated with back wages. Wal-Mart does not, however, demand that Chong Won management negotiate a collective bargaining agreement with the union.

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