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Gap, Mattel, Speedo, Wal-Mart Products Linked to Child and Sweatshop Labor in China and India

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Charles Kernaghan, executive director of the National Labor Committee, discusses recent scandals linking children’s products to sweatshop labor. National Labor Committee recently found forced labor of up to 90 hours a week and pay as low as 46 cents an hour in Chinese factories linked to Mattel. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: The clothing company The Gap has announced it’s cut ties with a subcontractor found to be holding children in slave-like conditions in India to make clothing sold by Gap Kids. The London Observer revealed Sunday children as young as 10 years old have been subjected to work long hours without pay and regular threats and beatings. Gap began auditing its labor conditions in 2004, years after reports of abusive conditions at its factories first emerged.

The Gap exposé is only the latest scandal linking children’s products to sweatshop labor. Earlier this year the toy giant Mattel recalled some 21 million Chinese-made toys found to contain lead paint easily swallowed by kids. Last week, the National Labor Committee in Support of Human Rights and Worker Rights released three reports documenting conditions for workers making those toys. The reports found forced labor of up to 90 hours a week and pay as low as 46 cents an hour. Aside from Mattel, other companies using the factories include Wal-Mart, McDonald’s and the swimwear manufacturer Speedo.

Charles Kernaghan is the executive director of the National Labor Committee, widely considered the country’s leading voice in exposing the foreign labor abuses of major U.S. companies. He joins us in the firehouse studio. Welcome to Democracy Now!

CHARLES KERNAGHAN: Good to be here.

AMY GOODMAN: What are you holding?

CHARLES KERNAGHAN: This is a Barbie Pet Doctor set, made in China.

AMY GOODMAN: Barbie Pet Doctor set.


AMY GOODMAN: It’s got a stuffed animal.

CHARLES KERNAGHAN: Yeah, little implements. And it was made in a factory called Xin Yi by young women forced to work 14-and-a-half hours a day, six days a week, at a minimum. Sometimes they work until midnight, 16-and-a-half-hour shifts. They’re at the factory 87 hours a week, paid 53 cents an hour as their wage and then cheated of their overtime wage.

AMY GOODMAN: Where is the factory in China?

CHARLES KERNAGHAN: In Shenzhen, in China.

AMY GOODMAN: Where is that?

CHARLES KERNAGHAN: In the south of China. And it’s a big factory, like 5,000 workers there. All the workers are temporary workers, so they have zero rights. When they hire them, they hire them on 10-day contracts or 24-day contracts. The ultimate would be three months. And then the company just renews them. So if the workers were there a year working full-time, they’re always temporary workers, which means they have no legal rights. So right from the beginning, they’ve got zero rights.

The workers can be fired if they’re inattentive at work. They can be fired if they’re seen speaking to each other during working hours. They can be fired if they don’t reach their production goal. The workers tell us they’re sweating all day; the factory is incredibly hot. They have to sit on hard wooden benches with no backs. They say after a few hours — they’re prohibited from standing up; after a few hours, their legs go numb, their arms hurt, their backs hurt. They have no right. The supervisors will yell and scream at them to go faster. You’re not allowed to answer back or even look at the supervisor, or you’ll be fired. They’re housed in primitive dormitories. It’s a sweatshop of enormous abuse. The workers are cheated of about two days’ wages every single week.

AMY GOODMAN: How do you know about this? Where did you speak to these workers?

CHARLES KERNAGHAN: Well, workers were able to smuggle photographs out of the factory, so we had the photographs of the very toys, pictures of the dorms, things like that, pay stubs, contracts. So, in other words, the evidence was quite, quite solid. In fact, the research took place over the course of a year. We started in mid-2006 and went back, you know, inspected the factory again in 2007. Obviously, you know, we can’t really discuss how it’s done, because China is not a country that allows that. So anyone investigating these factories will get a ticket to prison. So everything has to be done in a clandestine manner.

AMY GOODMAN: OK. Where is this Barbie sold? Explain exactly who it’s made for. It says “Hug n Heal” Pet Doctor.

CHARLES KERNAGHAN: Yeah, this was shipped out of China. Toys, just exactly the same, were made in this Xin Yi factory in Shenzhen. The interesting part about this toy is it sells for $29.99. We purchased it at Toys “R” Us, $29.99. We have the customs shipping documents with this toy entering the United States with a landed customs value of just $9. The landed customs value is the total cost of production. So the packaging, the materials, the accessories, the direct labor — indirect labor, profit to the factory in China, the total cost of production is $9. So that means Mattel and the other companies are marking this up by $20.99. That’s a 233 percent markup.

This is astonishing, because why are they producing toxic toys when it would only cost 10 cents per toy to check all the toys, screen all the toys, for hazards or toxic chemicals? They could screen every toy for 10 cents. So why aren’t they doing it, when the markup is $20.99? Why are they paying the workers such pitifully low wages and then cheating them of their wages, cheating them two days of wages every single week. It doesn’t have to be this way. This toy is marked up 233 percent. As a matter of fact, Mattel has spent about $200 — about $2 billion over the last three years in advertising. So we know that Mattel spent $3.45 to advertise this toy. You know what they paid the workers to make it? Less than 19 cents. So Mattel spends 18 times more to advertise the toy than it pays the workers to make it. The system’s out of control.

AMY GOODMAN: What has been the response of Mattel?

CHARLES KERNAGHAN: Actually, they were quite confused. They said they didn’t make these toys in a factory, and they just went on, as far as I know, like denying things. But I think they’re now beginning to come around and saying, well, they didn’t directly manufacture these toys in a factory; it was done through a contract.

Mattel — you know, it’s a funny thing. I actually thought Mattel was a pretty good company, because they repeat it over and over again. I mean, if you listen to them, you think they’re the Jesuits, you know, and they’re traveling around the world, they’re going to help develop poor countries. And then I started looking at some of their own audits. They read like a nightmare, horrifying. Mattel won’t even give you the names and addresses of the factories they use in China. They’ve got 40 to 50 contractors in China. They will not give you the name and/or address of those factories. They don’t want the American people to know.

But they do their own audits, and they number the factories: 15, 16, 18. I looked at the audit for factory number 18: seven-day workweeks, 80 hours a week, shifts up to 17 hours, excessive noise in the factory, hearing loss on the part of the workers, filthy water, disgusting bathrooms. I mean, it was like — it read like a nightmare. And this is Mattel’s own audits.

Turns out, you know, when Mattel — the vice president of Mattel apologized to China in this incredible scene: the vice president of Mattel in China, sitting across from a Chinese official, and the Chinese official lectures Mattel and says to them, “Don’t you realize that a very large portion of your profits come from our manufacturers in China? Don’t you realize that your cooperation with us, with the government of China, is critical?” And Mattel apologized to China for the recall, saying that it was too excessive, it shouldn’t have been that big, and it gave, you know, a bad image to China.

You know what the cooperation they were talking about? Mattel was getting waivers from the government of China to pay below the legal minimum wage in China, as pitiful as it is. Mattel got waivers right through 2005 to pay less than the minimum wage. And even today, Mattel has waivers so that they can foster workers to work 72 hours a week, including 32 hours of overtime, which exceeds China’s legal limit by about 285 percent. In other words, it’s a scam from beginning to end.

And, again, it doesn’t have to be this way. There’s enough money, there’s enough markup in these toys that the workers could be treated like human beings and not stripped of their rights. And the audits were completely ridiculous. The very first day when the workers go in, they sign a blank contract, so no one knows what’s in the contract. They sign a — and the first day, they’re trained in how to lie to the gullible auditors from Mattel and from the other companies: “Oh, we work 40 hours a week. Oh, we never work overtime. We’re treated with respect.” The thing is a scam from beginning to end.

AMY GOODMAN: We called Mattel, and we did not get a response. So you have Mattel, the maker of these products. Where does the stores that sell them fit in? What kind of responsibility do you feel — for example, Toys “R” Us — where does Wal-Mart fit into this?

CHARLES KERNAGHAN: Sure. I mean, they’re part of the whole process. So they’re equally responsible. I mean, Mattel is primarily responsible, because it’s their Barbie. But the odd thing that the American people find hard to believe is that Barbie is protected by laws. I mean the Barbie dolls, the Barbie toys. Mattel has demanded enforceable laws backed up by sanctions to defend Barbie. In fact, Mattel sues on the average of once a month. They’re the craziest company in the world for suing and suing and suing to protect Barbie. So they fiercely protect the Barbie. And if you imitate it or use Barbie in a way they don’t want you to, they’re going to sue you.

AMY GOODMAN: The Barbie doll itself is not in this.

CHARLES KERNAGHAN: No, but, I mean, they’ll sue for anything that’s related to Barbie, because they want to protect that. So if someone’s using it in an artistic manner, they’re going to come in and sue you. They sued this rock group in Denmark for making up a song about Barbie: “I’m a blonde bimbo,” you know, “I’m plastic,” you know, “Dress me up tight,” you know. It goes on and on. It’s hilarious. And they were sued by Mattel.

But — so Mattel has legal protections for Barbie. But when you say to Mattel, “Can’t we have similar laws to protect the rights of the 16-year-old girl in China who made this toy?” they say, “No, that would be an impediment to free trade.” So the system is so skewed that you have the doll is protected, the Pet Doctor is protected, but not the human being who made it, because Mattel and the other companies and Wal-Mart say, “No, you’re not going to do that.”

So this is essentially what happened with Gap, too, with the 10-year-old kids working 16 hours a day. They have 90 monitors to monitor 2,700 factories. You know, they’re not going to be able to do it. And those factories are hidden. Gap doesn’t give the names of those factories, either. So it really is a scam. I’d say the situation is so deplorable that these codes of conduct, voluntary codes of conduct, and private monitoring schemes, it’s like putting lipstick on a pig. I mean, the reality is so unpalatable they have to come up with some ridiculous facade to try to make it seem palatable to the American people. But I think the American people — parents should be shocked to know the markup on these toys and shocked to know the dismal conditions the workers live in.

AMY GOODMAN: What is your response to this report that came out, The Guardian — the London Observer revealing that the kids, as young as 10 years old, subjected to working these very long hours, also being beaten? Charlie Kernaghan, you’re the one who first exposed Gap. Now Gap’s saying they’re going to cut their ties with this subcontractor. Talk about your history with the Gap.

CHARLES KERNAGHAN: Well, we had found the Gap in 1985 in a factory in El Salvador called Mandarin, where there was children working, young teenage girls who were sexually harassed and abused, cheated of their wages, forced to work sometimes all night. I mean, a miserable place. And when we confronted the Gap about this, they waved a code of conduct at us, and they said, “We have a corporate code of conduct that protects the rights of these workers. How dare you say that to us?”

And I got my hands on the code of conduct, and I looked at it, and it was beautiful, like a little pamphlet. It was printed on treeless paper, because Gap wouldn’t hurt a tree; it was printed with soya-based ink, because there’s something wrong with ink. So I said to the Gap, I said, “You know, this thing is remarkable. It reads like the Bible. You could eat it, it’s so good for you. It reads well. It’s perfect.” But Gap had never translated it into a foreign language. It was completely PR. They told me, the vice president said, “Oh, we had inadvertently forgotten to translate the code of conduct into foreign languages.” So it started out as a scam, and it ended up as a scam.

Not long ago, in 2006, we found Gap clothing being made in Jordan by slaves, by people who were indentured servants who came from — guest workers who came from Bangladesh and China, India or Sri Lanka. When they got to the country, there were stripped of their passports. They were people without a country. They were locked in factories to work 16 to 20 hours a day. They were cheated of their wages. They were beaten, and they were raped, and there were 14-year-old girls working in that factory. So, you know, in other words, it continues.

People think that child labor ended with the Kathie Lee Gifford. It didn’t. I mean, it diminished greatly, but there are children working in Guatemala in the fields picking broccoli for the United States. It goes on and on.

AMY GOODMAN: You just testified before the Senate Committee on Commerce, Science and Transportation yesterday. What did you say?

CHARLES KERNAGHAN: Well, basically, I just confronted Mattel, confronted Speedo, confronted Thomas & Friends, because there are about 3,000,000 toy workers in China in 8,000 factories who are being abused and exploited. It turns out Santa’s helpers are really the young women in China who are being forced to work 14-and-a-half to 16-and-a-half hours a day, cheated of their wages, fired if they’re inattentive at work. In other words, these are poor women being cheated of their wages and who are living under primitive conditions that we couldn’t believe.

For example, in the Speedo — in the factory that was producing Speedo, in this Guangdong Vanguard factory — Speedo is the best-known swim brand in the world, bestselling swim brand in the world, and an Olympic sponsor. But the workers were working seven days a week. They’re at the factory a hundred hours — over a hundred hours a week, and one worker actually broke down crying as he discussed working 23 hours on a Speedo project, had to work right through the night, 23 hours. And his job was at punch compression machine, where they molded the swim masks, and he had to do nine pieces — he had to do one piece every nine to 12 seconds. And he describes being so exhausted, and you’re putting your hands into this dangerous machine to place the goggles, and how terrified you are the machine is going to tear your hands off if you stop for one second, because the machine doesn’t stop. And he had to work 23 hours. There’s no Olympic athlete in the world, no matter how great they are, that could do what the sweatshop workers in China are doing, not one. But the Olympic athletes also won’t speak up for these workers who are making their products.

AMY GOODMAN: So what about the Olympics in China? What are you calling for?

CHARLES KERNAGHAN: Well, I — I mean, I think it would be a very excellent time to put pressure on China. If these Olympic athletes would speak up. One athlete, two athletes, three athletes.

AMY GOODMAN: Have you approached any?

CHARLES KERNAGHAN: We’re trying. They’re very difficult to reach. We found over the years athletes don’t really respond. And we’ve tried with the NBA, with football, baseball. It’s almost impossible to get a statement. But President Bush — I mean, he said he’s going to — you know, he’s going to the Olympics, because he loves sports. Let him say something about these sweatshop conditions. I mean, this is, you know — Speedo is a very popular company. So I think the Olympics are a very good time to put pressure on for the workers in China, so that, you know, they have the right to climb out of misery.

You know, they have no voice. In the Speedo factory, if a supervisor is screaming at you and yelling at you and humiliating you in front of all your friends and coworkers, if you even answer back, if you dare answer back to that supervisor, you’re attacked, you’re choked, you’re beaten, and you’re fired. The workers have no voice. And so, we’re really dealing with a system where the workers are completely stripped of their rights, paid pitiful wages, And the dormitories, you couldn’t believe: double-level bunk beds line the walls, filthy, no furniture, no chairs, nothing.

AMY GOODMAN: Should the factory — should these companies in this country, like Speedo, like Mattel, should they just shut down their factories in China?

CHARLES KERNAGHAN: No, but they should respect the laws of China. But, as a matter of fact, when there was a recent move to improve the labor law in China, guess who fought it. U.S. companies. So here’s an authoritarian regime; they were finally going to strengthen their labor laws a little bit, and guess who came in to oppose it: Wal-Mart and all the multinationals came in and said, “No, if you improve the labor laws, we’re leaving the country. You’re going to lose investments.” So they’re in China because they know they can work with an authoritarian government. They know the workers have no real unions. There’s no real human rights organizations. They can do whatever they want, and they can pay these pitifully low wages. They’re going to fight to the end to maintain that.

So, in a sense, the only way to stop this is to say to the companies, as Congress is doing now — Senator Dorgan and Congressmember Shaw in the House, they’re saying to the companies, fine, you can produce any way you want, but you’re not bringing those products into the United States if they’re not made under humane conditions, and we’re going to hold you legally accountable to respect the ILO core labor standards. This is actually the fastest-growing bill in the House. It has about 120 co-sponsors. It’s like coming out of nowhere, the Decent Working Conditions and Fair Competition Act. It’s going to sneak right up there, and the companies are going to be caught off guard, and they’re finally going to have to respect the legal rights of the workers.

AMY GOODMAN: Charlie Kernaghan, we’ll leave it there. We’ll link to your studies at democracynow.org. Charles Kernaghan is executive director of the National Labor Committee based in New York. He testified last Thursday before the Senate committee.

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