Working Conditions in Chinese Factories Making Disney
Products
By the Hong Kong Christian Industrial Committee
Hong Kong, February 1999
The Hong Kong Christian Industrial Committee, founded in 1967, provides direct services to workers and their
families, and is a watchdog for
government policies. It has also produced numerous reports on working
conditions in China, particularly in the garment, shoe and toy industries.
Between July 1998 and February 1999, our researchers visited four factories
in South China producing for Disney--three garment factories and one footwear.
Their research is based on interviews with dozens of factory workers. The
factories are Sheng Li, Midway Daily Products Ltd., Guo Nian Garmnet Factory,
and Chi Li An Footwear Factory. When our researchers visited the last factory,
it had closed down but they gathered information on the ongoing controversy
between the owner and former workers.
The following are the findings from our research:
Case 1: Sheng Li
Sheng Li produces Mickey Mouse clothing for export. It is a small factory,
with 60 to 80 workers on the sewing production line, depending on the
production schedule. Eighty percent of the workers are women between the ages
of 18 and 26.
Wages and Working hours
Workers are paid a standard piece rate. When working overtime, workers
receive only RMB 0.8 above the piece rate. But according to the Labour Law,
workers should be paid 1.5 times for working overtime on weekdays and double
time on Saturdays and Sundays. The workers said they usually work for 12 hours
a day: 08:30-12:00, 13:30-17:30, and 18:30-23:30. Generally, they work for six
days a week, even in low season; they have no holidays in high season. They
earn only RMB 500-700 a month. Workers are fined RMB 12 if they take 3 days or
more off a month.
Contracts and Deposits
Most of the workers sign a two-year contract, but are not given copies of
their contracts. Illegally, RMB 20 are deducted each month from the workers'
wages as a "deposit." Before they can start working for the factory,
workers are charged RMB 22 (RMB 2 for an identity card and RMB 20 for tools).
Workers are told that the tool deposit will be returned if the tools aren't
damaged. None of the deposit is refunded if workers resign less than two years
after joining the workforce.
Workers are not medically insured even though, according to the China Labour
Law, the factory is obliged to insure workers.
Living Conditions
All the workers live in dormitories. Each dormitory building is guarded by a
security guard. Rules and regulations are written on a notice board at the
gate. Workers are charged about RMB 30 a month for accommodation. Some live in
a 4-story building where the lower two stories and a half of the third floor
are used as a warehouse and the other floors are used as a dormitory. This
violates Chinese fire regulations. Between 14 and 16 workers live in a flat,
with five workers sharing an approximately 100 square foot room furnished with
several bunk beds.
Although workers complain that the meals supplied by the factory are
unappetizing, they have to pay RMB 50 a month for food. Many workers say they
would rather cook for themselves.
Management
Some workers complain that it is unfair that their supervisors often offer
the best paid jobs to their own villagers while workers without connections are
only given low paying jobs.
Code of Conduct
According to the Walt Disney Company's Code of Conduct for Manufacturers:
"Manufacturers will take appropriate steps to ensure that the
provisions of this Code of Conduct are communicated to employees, including the
prominent posting of a copy of this Code of Conduct, in the local language and
in a place readily accessible to employees, at all times." However, we
found that the Code of Conduct is not publicized to workers.
Interview in the dormitory
The researchers came across five women workers at the ground floor of their
dormitory building, which was next to the factory and which was not guarded by
any security staff. The women invited the researchers to chat in their room.
The room, which had three bunk beds, was in a flat on the third floor. A small
fan without a safety guard was the only ventilation in the sweltering heat.
Fortunately, a big window in the room allowed some fresh air and a view of the
factory.
Two of the workers came from Guangxi while the others were from Guangdong.
They had worked in town for six to seven years, since they were 16 years old.
They had all worked in different factories in different areas, such as
Shenzhen, Zhongshan, and Guangzhou.
These young women did not have any ambitions for themselves. Frequent moves
from one factory to another make it difficult for workers to develop skills,
they told researchers. This means the workers always remain as low ranking and
unskilled workers. When they get into their thirties, they will be replaced by
younger women.
The women were very ambivalent about their own futures. It seemed that most
of them would prefer to stay at home with their families rather than work in
the factories. The women had only a primary education. They hoped to provide
their younger siblings with opportunities to pursue higher education. As elder
sisters, they wanted to lessen the burden on their families by providing for
themselves in the town. But their wages were too low for them to send money
home. In fact, they found it increasingly difficult to support even themselves
because of inflation in the urban areas.
None of the women were aware of their labour rights, although the China
Labour Law was passed in July 1994. They didn't know about the legal
protections provided to them by law.
One of the women said: "We are used to being deprived. We have suffered
for a long time, even in the past. It is common for employers to exploit
us."
Case 2: Midway Daily Products Ltd.
Interviews took place during low season. Nevertheless, one worker said they had
worked for 30 hours overtime the previous month. Apart from clothes, the
factory makes shoes and dolls for Disney. According to the workers interviewed,
about 600 people work in the factory--half are men and half women. Most of the
workers are aged 20 to 30 and come from other provinces, such as Sichun, Hubei
and Hunan. Interviewees were chosen at random, but all the workers had been in
the factories less than 6 months.
Wages and Working Hours
The normal working hours are 08:00-11:30 and 13:15-17:00 for five and a half
days a week. Workers are regularly forced to work overtime from 18:00 to 20:00.
But in the high season, overtime is often extended to 22:00, and it is common
to work on Sundays. Hours worked on Saturday afternoon and on Sundays are
considered overtime. However, according to Chinese Labour Law, the normal
working week should be five days, not five and a half. So work on Saturday
mornings is also overtime work and payment should be double the normal rate.
Workers cannot refuse to do overtime. The factory pays only RMB 0.8 extra per
overtime hour, which is lower than the minimum set by Chinese Labour Law.
Wages are mainly calculated on a piece rate basis, except for clerical and
managerial staff. One woman worker complained that she had been promised RMB
800 a month in her contract, but once she began working her pay was calculated
on a piece rate basis. Piece rate is a system which makes workers' income
unstable, varying from season to season. One worker said she usually earns only
RMB300-400 a month, though RMB1,000 in a high season. On average, most workers
can earn RMB 600 a month in low season (including overtime) and RMB1,000 in
high season.
Contracts and Deposits
Some workers have signed contracts with the factory, but others do not. By
law, however, enterprises must sign contracts with all workers. According to
law, enterprises should pay for health, safety, and medical insurance for their
workers, but the factory does not. Workers have to pay for their own medical
care. The factory does not provide medical care for victims of industrial
accidents.
Workers are forced to pay a RMB 50 entrance fee and a RMB 100 deposit. All
such charges are prohibited by Chinese Labour Law. The deposits are not
returned if workers leave the factory within the first three months. The
workers also pay the residential tax, RMB 30 per month for three months, which
should be paid by factory owners.
Living Conditions
Free accommodation and food are provided by the factory management. However,
a sewing worker said that according to her contract, she should receive RMB 350
as food allowance every month. Instead, the money was deducted from her wages.
Investigators found one room, measuring about 50 square feet, where eight
women live.
Workers reported that some activities are occasionally organized for them,
such as musical activities and sports, but there was no trade union and nobody
is willing to stand up for their rights.
Management
If workers arrive a minute late, they are penalized RMB2; if 5 minutes late,
RMB10. Those workers who arrive more than 15 minutes late are regarded as
absent and fined RMB30. Anyone who is absent for 3 days is fired.
General evaluation
Employees in this factory can earn more than average income in Guangzhou in
the high season, but their wages are terribly poor in the low season. Moreover,
income is unstable because of the piece rate system. The deposit and entrance
fee are clear violations of Chinese Labour Law, and workers expressed extreme
displeasure and frustration with the fine system.
Work on Saturday afternoons and Sundays is paid at the overtime rate. It is
better than many factories, especially those in Donggung. However, it still
violates the law as workers are not paid overtime for Saturday mornings.
Moreover, workers say they work 30 hours overtime from late June to mid July.
If this had included Saturday morning as overtime, the total would exceed the
legal limit of 36 hours a month.
Case 3: Guo Nian Garment Factory
The researchers visited the factory in the summer of 1998 and again in
February 1999. The factory produces children's wear for Disney. There are about
200 workers. All but about a dozen are women, most of them between 20 and 30
years-old. Most of the employees come from rural villages in Sichuan, Hunan,
Guangxi, Hainan and Jingxi.
Wages and Working hours
Employees work daily 08:00-12:00 and 13:30-18:30. Workers can seldom take
even a short break. They always work overtime until 02:00 or 03:00, especially
in the high season. As a result, they are working for more than 16 hours a day.
It is clear that the factory seriously violates Chinese Labour Law covering
working hours. The Chinese Labour Law clearly states that employees should be
paid 1.5 times the daily rate for overtime work and double time for weekend
work. But workers are only paid an extra 10 percent of the normal rate for
working overtime. Employees usually work 7 days a week. Nevertheless, most of
them earn only about RMB 500-600 a month (including overtime). Sewing workers
can earn up to RMB 700-800, paid on a piece rate basis.
In February the workers complained that they had not been paid for three
months. As the Chinese New Year was approaching, many workers planned to return
home for the holidays. Management had promised to deliver their wages on
November 9, three months earlier.
Several workers who could show their confirmed train tickets for traveling
home were given their wages, but most of the workforce could not get any money.
As the price of train tickets was increasing daily, workers wanted to buy the
tickets as early as possible, but they had no money to do so. Because they
hadn't been paid for three months, most of the workers could not join their
families for New Year, the most important holiday in the China.
Contracts and Deposits
The workers receive no welfare or social security at all. As the Labour Law
states, labour contracts should be signed by both management and workers. But
Guo Nian workers say that they had signed no contract and had never been given
insurance.
Workers have to pay a month and a half of wages as a deposit when they
started working in the factory. The deposit is not refunded if they stay less
than a year. Although this deposit system is prohibited by Chinese Labour Law,
it is a common way for employers to keep their workforce.
Living Conditions
Workers are provided with free accommodation. Between 10 and 12 workers live
in a room furnished with bunk beds. There is a fan, but hot water is only available
on the ground floor of each dormitory building, and workers complained that it
is dangerous to carry hot water upstairs.
The management charges RMB 60 for food. Meal permits are issued when
employees start working. The total charge of catering, water and electricity is
RMB 75, and is deducted from workers' wages every month.
Management
Workers are fined RMB 50 if they are absent for a day without prior
permission. The management never actively dismisses workers but tries to force those
they want to leave to resign. Management sometimes withholds the wages of those
they want leave until the undesired employee departs.
Wildcat Strike
As the interviewed workers report, the factory often does not pay wages on
time and most payments are delayed for about two months. On June 16, 1998,
workers decided they wouldn't tolerate this any more and organized several
wildcat strikes to claim their back pay. The protests, however, were
unsuccessful.
Case 4: Chi Li An Footwear Factory and
Fei Fan Footwear (Panyu) Ltd Co.
The Chi Li An Footwear Factory and the Fei Fan Footwear (Panyu) Ltd. Co.,
which had manufactured Disney children's shoes, were closed when our
researchers visited. The buildings had been taken over by another garment
company.
Two legal statements were posted explaining why the factories had closed. On
the night of July 16, 1998, the factory boss fled with RMB 400,000, of which
RMB 300,000 was wages that were to be paid to the workers. The factory manager
had stolen all employee wages from April to July, 1998 and the workers' entry
deposits.
One hundred and fifty eight Fei Fan workers brought the case to the Panyu
Labour Tribunal, accusing Fei Fan of withholding money owed to them. The
individual debts varied from RMB 70 to RMB 11,895. The court found that the
factory owed the 158 workers RMB 277,954.25.
According to the posted tribunal statement, the employer did not sign labour
contracts with workers and charged each worker an entry deposit between RMB
100-500. Both of these abuses violated Chinese Labour Laws. Worse still,
workers' wages were three and a half months in arrears, amounting to RMB
253,125. Workers entry deposits and other money, which amounted to RMB
24,829.25, were missing as well.
The committee of the Da Ping Industrial Zone could only pay RMB 131,913.85
to the workers. All of the factories' assets were auctioned on November 5,
1998, according to the public announcement issued by the People Court of Panyu
City Guangdong.