The Worker Rights Consortium (WRC) has released a report naming Gildan Activewear (PPAI 250187, Platinum) – the No. 38 supplier in the inaugural PPAI 100 – and Hanesbrands (PPAI 191138, Gold), among a group of companies that have illegally withheld $2 million in compensation to 831 factory workers in the town of Ilopango, El Salvador. The Central American factory these employees worked in closed two years ago.
- In February, SanMar (PPAI 110788, Platinum) – the No. 1 supplier in the inaugural PPAI 100 – participated in a seminar with the Fair Labor Association, detailed by PPAI Media, which discussed how to properly handle potential exit strategies for a factory in an ethical and responsible manner.
- Gildan is currently amid a messy leadership dispute and its board recently stated that it is fielding acquisition offers.
‘Miniscule’ Sum of Payments Made
The WRC report cites findings from the Salvadoran Ministry of Labor that 831 workers at the APS factory in Ilopango had wages withheld. The employees manufactured clothing for Gildan, Hanes and Specialized Bicycle Components, a biking apparel brand.
- Since the WRC became involved with the matter, Gildan agreed to pay $1.34 million of what was owed to the workers, accounting for two-thirds of the outstanding balance.
- The WRC characterized the amount paid by Hanesbrands as a “miniscule” sum. Specialized has not offered anything.
“My kids and I are only able to eat rice, beans and eggs,” Ana Cecilia, a former employee of the factory says.
By not immediately paying all wages and terminal compensation upon the factory closure, Hanesbrands and Gildan violated El Salvador’s labor law.
Social impact group Green America, a member of the Clean Clothes Campaign, has gathered 10,000 signatures for a petition to pressure Hanesbrands and Specialized to pay the remaining balance owed to the workers.
“We stand in solidarity with the garment workers of El Salvador to advocate for wage justice,” says Jean Tong, Green America’s labor justice campaigns director. “By choosing where we spend our money, we can encourage businesses to adopt fair labor practices. We urge Specialized and Hanes to immediately join other companies that have committed to accountability and pay the workers for their labor.”
Check And Balances Are Crucial
In the Fair Labor Association seminar with SanMar, the panelists discussed the importance in creating polices and systems for which to ensure that worker compensation is delivered to all employees upon a factory closure.
“Transparency and communication with the factory is key,” says Prathika Kurian, senior manager of factory compliance at SanMar. “I cannot stress enough. The more the factory can trust you, the more transparent they’ll be with you. Transparency on finance is very important. There is no other way for us to know if the factory is financially stable. The trust you build is the most important.”
Key points touched on included:
- Never lose your sensitivity.
- Look for red flags.
- Form long-term partnerships.
- Transparency and communication.
- A third party can bring checks and balances.
- Work with governments or institutions.
