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U.S. Probe Of Chinese Factory Earns Workers Sundays Off

McClatchy  |  August 7, 2008  |  Share  |  Source article

Thu, Aug. 07, 2008

By: Kat Glass

WASHINGTON — When Susan Perry goes toy-shopping for 2-year-old granddaughter Georgia, three little words send up red flags: "Made in China." Sweatshop labor is one of those flags. But knowing what's going on in Chinese factories is hard for consumers, even though wages and working conditions are often among their top concerns about globalization.

The watchdog organization that made the accusation, the National Labor Committee, which has roots in the American labor movement, is widely quoted on global labor conditions. But the New York-based group has little direct knowledge of what goes on in the Chinese factories where 80-85 percent of U.S. toys are made.

Its allegations were based on interviews with workers by phone and e-mail from New York, director Charlie Kernaghan said. To make matters worse, his Chinese interviewers spoke Mandarin — not the workers' dialect — and the workers' Mandarin, he said, was "crummy."

At the same time, when Kernaghan leveled his charges last month, Sesame Workshop — the nonprofit educational organization behind "Sesame Street" — and its U.S. licensee, K'NEX, showed ignorance of their Chinese partners' practices and no interest in filling in American consumers.

Knowing about the working conditions under which their products are produced isn't easy for U.S companies, several independent experts said.

"Hard as you might try, it is very hard to control your supply chain," said Jim McGregor, the head of JL McGregor & Co., a China-focused independent research firm. "You may contract to factory A, but they might subcontract to factory B and C."

Kernaghan declined to explain how he found K'NEX's Chinese partner's workers, fearing reprisals against them. He also didn't ask managers at the Chinese factory or its American partners for comment before he released his findings to the news media.

"I see no reason to alert them beforehand. Zero," he said. "The workers have been cheated so much that, frankly, the more you can expose the company, the better it is, because then they won't do it again."

With that in mind, the group targeted Wal-Mart in mid-December of last year for selling Christmas tree ornaments allegedly produced in a Chinese sweatshop. In the Sesame Workshop case, the group struck a day before K'NEX's new Ernie toy went on sale online.

By not seeking comment, however, Kernaghan guaranteed that any errors or confusion would go public before being set straight. Three issues proved persistent and left large questions:

* Which U.S. companies were involved?

Hasbro, a leading toy maker, did business with the same factory on "Sesame Street" products, according to Kernaghan's report. Not so, Hasbro said. Without retracting its claim, the labor group reported 10 days later that new workers contacted at the Chinese factory weren't making any Hasbro products.

Underpaying Chinese workers isn't unusual. "It's pretty much typical," Kernaghan said in an interview. What riles authorities is child labor. According to the report's summary, "young workers, including several children" worked at the factory. Inside, the report says only that some children were "seen in the factory in April."

 * Which Chinese factory was it?

The report targeted a factory called Kai Da, while Sesame Workshop and K'NEX, based in Hatfield, Pa., said their partner was Hoida. Was it merely a translation error or was the offending factory a renegade making knockoff K'NEX toys? That remained unclear for weeks.

When the labor group released its report July 14, K'NEX President Michael Araten said he was "shocked, very dismayed," and dispatched a vice president to China to check out the claims. Sesame Workshop also promised to investigate.

In a separate interview, Araten assured a McClatchy reporter that his Chinese partner had always met safety and labor standards set by the International Council of Toy Industries, based in New York.

However, Frank Clarke, a consultant for the council's ethical standards program, said the Chinese factory was cited last October for inaccurately recording workers' wages and hours.

Araten didn't respond to multiple requests for a follow-up interview.

The epilogue, which is just now being written, suggests what's really been going on.

In a letter last Friday to a British-based nonprofit agency that tracks labor rights disputes worldwide, Araten said that K'NEX was working with the toy industries council "to ensure that any issues at the factory are rectified." He added that K'NEX had hired an independent auditor "to ensure and monitor ongoing factory compliance."

A spokeswoman, Beatrice Chow, said Sesame Workshop had reviewed K'NEX's findings about conditions at the factory and would conduct an unannounced audit.

Neither K'NEX nor Sesame Workshop would share what they'd learned about how the workers were treated.

On Tuesday, Kernaghan, without naming his sources, e-mailed a McClatchy reporter to say that some workers at the factory had just received substantial raises to 74 cents an hour. They'd even get Sundays off.

"I love to find things that aren't Chinese," toy shopper Perry said.

(Tim Johnson and McClatchy special correspondent Hua Li in Beijing contributed to this article.)

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