December 17, 2003  |  Share

Hanchang Textiles/Oriental Tex

El Salvador

This new NLC report documents harsh sweatshop conditions, union busting and apparent tax fraud with the complicity of the Salvadoran Ministry of Labor - in a South Korean maquila factory sewing clothing for Osh Kosh B'Gosh and Wal-Mart.

Hanchang Textiles/Oriental Tex

El Salvador

This case study carried out over the course of two years documents the systematic violation of worker rights, union busting and apparent tax fraud—all carried out in plain view in front of the Salvadoran Ministry of Labor, which has refused to intervene.

The case of Hanchang concretely demonstrates that the Salvadoran government has no intention of implementing its own labor laws, for which reason, El Salvador should not qualify for inclusion in CAFTA without major reforms.

The United States Trade Representative's office points to WRAP—the U.S. apparel industry's factory monitoring and and compliance program—as one of the positive assurances that worker rights will be protected under CAFTA. But, as this report will show, in the midst of mass firings, union busting and the return of serious labor rights abuses, WRAP certified the Hanchang factory as complying with all of the U.S. apparel industry's worker rights standards.

Hanchang is a remarkable story of young women who, despite repression and constant threats, went on to organize a union in May of 2001. They wanted to end the violations and maltreatment they faced in the factory. Within a matter of days, 15 founding members and newly-elected union leaders were fired. However, in a rare victory, under pressure from the Phillips Van Heusen company and the National Labor Committee, the fired workers were quickly reinstated to their former positions and paid back wages.

Maquila companies in El Salvador enjoy 100 percent tax-exempt status—paying no corporate, state, city or even local sales taxes, as well as no tariffs on imports or exports. The only catch is that this tax exemption runs out after 10 years. So Hanchang management came up with a scheme. They would simply change the name of their company to Oriental Tex, but they would remain in the exact same factory, with the same machinery, the same workers, producing the same labels. With this slight of hand, they could slip out of their obligation to pay taxes. Moreover, management realized that they had the opportunity to kill two birds with one stone. In the process of creating their "new company," they would fire and rehire everyone except the union leaders and most active members. In this way they could kill the legal union, which they did, and avoid paying taxes all in one shot.

Hanchang has now come full circle and is once again a sweatshop, producing clothing for Wal-Mart. Mandatory overtime has returned, as has abusive treatment on the part of the supervisors, and workers once again must ask permission and receive a toilet pass in order to use the bathroom. As in the past, management threatens the workers explaining that if they try to organize they will be immediately fired. The company only wants "these workers to have better luck than the Hanchang workers had!"

Again, this was all done in plain view, right in front of the Ministry of Labor. Hanchang, sadly, is what labor rights—or the lack thereof—will look like under CAFTA. Without enforceable labor rights standards, El Salvador will never implement its own laws, especially freedom of association or the right to organize.


Hanchang Textiles, S.A. de C.V.

Plant #2
San Marcos Free Trade Zone
San Salvador, El Salvador

Phone: (503) 220-1271 / 72 / 73 / 74
Fax: (503) 220-1275
Email: Luis/[email protected]

- Owner: South Korean Hanchang Corporation

Hanchang Textiles S.A. de C.V. Management:

-President and General Manager:   Young Sup Kim
-Administrative Manager:   Jong Hak Kim
-Chief of Human Resources:   Rene Gutierrez
-Company Attorney:   Julio Rene Fuentes Rivera






(It is interesting to note that Mr. Gutierrez is a former Ministry of Labor Inspector.) 

Number of workers: 1,300 in May 2001; 400 in July 2003

The San Marcos Free Trade Zone, located just three miles from downtown San Salvador on the road to the airport, was built in 1990 with U.S. taxpayers' money. Between 1984 and 1992, the U.S. Agency For International Development (USAID) spent some $103 million on such projects in El Salvador. A former Salvadoran Army colonel, Mario Guerrero, just happened to have acquired enough money (a Colonel's salary at the time was $800 a month, and $9,600 a year) during the U.S.-funded civil war to buy the Zone, which has 56,000 square meters of factory space housing 12, mostly South Korean companies, with 8,500 workers. The San Marcos Zone is surrounded by barbed wire, locked metal gates and heavily armed security guards.

Colonel Guerrero also owns the International Free Trade Zone, which he lets his son Jaime run, which houses 5,000 workers in three Taiwanese plants, and one plant each from Korea and Singapore. Factory space in the zone is scheduled to nearly triple over the next few years, from the current 60,000 square meters to 170,000 square meters. The Colonel also has investments in banks, bus companies, and a marble factory, among others.

The Hanchang Corporation is a transnational in its own right. In addition to its Hanchang factory in El Salvador, the company also has factories in the Dominican Republic, Sri Lanka and China. Hanchang's Qindao Hansing Textile Co. Ct. China, located in the Qinda Industrial Free Trade Zone in Laixi, has 700 sewing operators who produce 300,000 men's suits and blazers a year. Hanchang Lanka (Put) LTD, located in the Rannapnra Industrial Zone in Sri Lanka, has 1,000 workers producing 600,000 garments a year including pants, shorts, and 3 jackets. Hanchang Textile, S.A., in the Bonao Free Trade Zone in the Dominican Republic, has 750 workers who produce 350,000 garments per year, primarily for Liz Claiborne and Calvin Klein.

The Hanchang Textiles, S.A. de C.V. plant in El Salvador produces over five million shirts a year.

So the Hanchang Corporation is a transnational which produces over 6.29 million garments a year, including 650,000 suits, five million shirts, and 600,000 pants, shorts, and other items.

Hanchang Textiles, S.A. de C.V. initiated operations on September 2, 1992, occupying two buildings together known as Plant #2, with 73,184 square feet of shop floor space. In the early 1990s there were 12 production lines, 960 sewing machines, and a total of 1,500 workers who sewed 420,000 dozens of shirts per year, or 5,040,000 garments.


Men's and boy's dress, casual and sport shirts along with women's and girl's blouses.

Labels (2000 -2003):

Wal-Mart (Bobbie Brooks Puritan); Target (Cherokee); Meijers (Emergency Exit); K-Mart (Route 66, Basic Editions); OshKosh; Phillips Van Heusen; Saks (Von Furstenberg); Oleg Cassini; Milo International; and Etienne Algner.


These are a few of the labels that workers smuggled from the Hanchang Textile plant in El Salvador:



1) Interview with a board member of SITEHSA

Name of worker: Delmi Regina Hernandez Melendez
Position on the board: Secretary of Education
Age: 45 years
Marital Status: Single
Residence: Sonsante, Colonia San Genaro, Nahuizalco


I worked at the San Marcos Free Zone at the Hanchang factory where I produced dress shirts for men, t-shirts, and shorts for children. The production was for different labels like Van Heusen, Arrow, Puritan, OshKosh, and other labels. I worked as an operator making collars for dress shirts.

To get work at this factory I had difficulties - the Koreans did not want to hire me because I was 36 years old and they were only hiring women from 18 to 30 years of age, but one Korean told me that they needed workers and that if I wanted to work the age did not matter, and I began to work for Hanchang.

I began to work at the factory on the 12th of April 1994, and they fired me on the 20th of April 2003 because the factory closed its operations.

In this factory there existed a union formed by the workers, founded on May of 2001, I belonged to the board of the union as the secretary of education.

I joined the union as a result of being mistreated physically and verbally by the supervisors and Koreans - they yelled at us and overworked us, they forced us to work extra hours and they constantly pressured us to meet the production goals.

The management, when it realized that the union had been formed, fired the founding members of the union. About a week after the firing, the management reinstated us as a result of the national and international denunciations. The National Labor Committee helped us communicate with the owners of the Van Heusen label and due to the pressure that the National Labor Committee was making we were reinstated and compensated for the days that we had not worked.

Upon being reinstated the bad conditions improved and the other workers placed their trust in the union. Due to the improvements, the union gained 200 affiliates.
In the middle of the year 2002 the management began to fire approximately 800 workers, leaving only two lines of production and began to take away incentives, to pressure the workers and force overtime, and suspended our break.

In the month of April, the management announced that it would close the factory due to a shortage of contracts, but it was a strategy that they used to end the union because in actuality they had opened up another factory with another name and are hiring more personnel.

My earnings at this factory were the minimum wage of 1260 colones ($144) per month. Every two weeks I was able to earn between 700 and 800 colones ($80 and $91.43) and they gave me as an incentive 100 colones ($11.43) and I worked between 15 and 20 hours extra overtime each two weeks.

I lived with my brother and paid him 100 colones every two weeks to live at his house. To go to work I would wake up at 5:30 a.m., I cleaned the house and left at 6:10 from the house and arrived at the factory at 6:30 a.m. I would board two buses, paying on transport 3.5 colones ($0.40) on the way to work and on the return 3.5 colones ($0.40) — in total I spent 7 colones ($0.80) on a daily basis. I would arrive to buy my breakfast at the street market that is outside the factory — I ate 2 pieces of bread with refried beans and a coffee, spending 5 colones($0.57). For lunch I would buy chicken or beef soup, stuffed peppers with rice and two tortillas, spending 10 colones ($1.14).

2) Interview with a board member of SITEHSA, Hanchang

Name of the Worker: Delmi Noemi Sanchez
Age: 27 Years
Marital Status: Single mother with two daughters, 6 years old and 8 months old.
Residence: Colonia Los Naranjos Apopa


I worked in the Hanchang factory as an assistant to the supervisor on line 7. This line produced dress shirts for men, women, and children for the label Van Heusen, Arrow, RBM and other labels.

My work schedule was from 7:00 a.m. to 4:00 p.m. from Monday to Friday, and Saturdays from 7:00 a.m. to 11:00 a.m., also, because of my assistant position, I was obligated to work from two to three hours extra every day from Monday to Friday and when there was too much work I was to stay Saturdays from 11:00 a.m. to 4:00 p.m. and on occasion we worked on Sundays. They would give us a recess of fifteen minutes in the afternoon and 55 minutes for lunch. The factory is located in the San Marcos Free Zone, so I have to wake up at 5:15 a.m. to make breakfast for my two daughters and my mother; I go to my job at 5:40 a.m.; it takes me 40 minutes to get to the factory. I board two buses and the daily cost of transportation on the way over is 5.00 colones ($0.57) and on the return 5.00 colones — in total 10 colones ($1.14) daily.

I would arrive at the San Marcos Free Zone at 6:30 for a breakfast of two pupusas and a coffee and would spend 6 colones ($0.69), I would also buy my lunch and spend between 10 and 12 colones ($1.14 - $1.37), eating rellenos of vegetables, chicken or meat, two tortillas and a drink.

I return to my house between 7:15 p.m. when I get out at 6 p.m. and when I get out at 7:00 p.m. I arrive at 8.15 p.m. I arrive to have dinner - dinner is made by my mother since she spends her time at home and she takes care of the girls and helps me with house chores. Normally what we eat is varied — refried beans with eggs, coffee and tortillas or refried beans with banana, coffee and tortillas. Later I help my daughters with their homework, shortly thereafter I go wash the dirty clothing for the day - I go to bed at 10 pm.

I was dismissed from Hanchang on the 30th of April due to the closure of the factory. In Hanchang, there existed a union formed by the workers, which was founded on May 2001 — I was part of the board of directors, in the position of Secretary of Acts and Agreements.

I got involved in this union because the Koreans pressured us too much and other workers were assaulted physically and verbally, and they forced us to work overtime. Upon realizing that a union had been formed, the employers dismissed us and in 10 days we were reinstated.

The management began to improve the conditions for a while, later it began to suspend the break and took away the incentives that were given to us. They began to fire workers — among them those affiliated, and those not affiliated until only two lines of production were left.

The union board of directors made denunciations at the national and international level over the rights that were being violated at Hanchang.

On April of 2003, the administration announced that the factory would close on the 30th of April of 2003 due to a lack of work.

I began to work on May of 1998 and was laid off on the 30th of April 2003. They gave me a severance, but as a board member I had the right to my fuero sindical (one more year of security). For my compensation they gave me $743 (6501.25 colones) and two months of fuero sindical, $288 (2520 colones), because the management did not want to pay us fuero sindicales (one year guarantee) completely.

I was put to work as an assistant to the supervisor because I had graduated high school. This work is difficult because one has to be aware of every type of style that will be produced on the line and give the necessary instructions. I had to keep track of the worker production quotas each hour and in addition the supervisor loaded me with a part of her work.

I earned the minimum wage, which was 1260 colones ($144) a month. Every two weeks I was able to make between 900 and 1000 colones ($102.86 to $140.29) working the obligatory 20 to 30 overtime hours, receiving an incentive of 200 ($22.86) every two weeks.

In February I got pregnant and the supervisor took away my position as assistant, leaving me as a manual worker - cutting thread, giving work to the operators, ironing — during my whole pregnancy the supervisor was changing my position*. Upon returning from my three months of maternity leave, the supervisor took away all of my previous responsibilities and left me on a machine for attaching buttons.

* Note: This is a common tactic used by the maquila owners to harrass pregnant women into quitting. The constant switching to new operations not only lowers the worker's output and wages, but also creates enormous pressure since she is constantly struggling to master these new jobs.

Abusive Conditions at Hanchang in 2001

Hours:   Mandatory overtime; 12-hour daily shifts, Monday through Friday, 7:00 a.m. to 7:00 p.m.; 8-hour shift on Saturday; 14 hours of overtime required each week; workers at the factory 68 hours a week.

The regular shift at Hanchang was 9 hours a day, from 7:00 a.m. to 4:00 p.m., Monday through Friday, and from 8:00 a.m. to noon on Saturday, or a 4-hour shift. With an hour off for lunch, this schedule would conform with the regular legal workweek in El Salvador of 44 hours.

However, Hanchang management demanded three hours of obligatory overtime each day, extending the shift from 7:00 a.m. to 7:00 p.m. Monday through Friday, and from 8:00 a.m. to 4:00 p.m. on Saturday. Under this schedule, the workers were at the factory 68 hours a week and required to work 14 hours of overtime.

The workers reported that Korean managers would shout at anyone who asked for permission to be excused from overtime this one time due to a family emergency, telling them they would be fired if they did not stay. Of course, this is illegal under Salvadoran law, since overtime should only occur under "extraordinary circumstances" and on a voluntary basis, only after a "pact between the workers and the employer" has been reached. The company was not stupid. To cover their backs, workers were forced to sign a list saying they "voluntarily agreed" to work
overtime. This was for the benefit of the gullible U.S. companies. If the workers did not sign, they would be fired. Moreover, the workers were required to be in the factory and at their workstations ten minutes early, by 6:50 a.m., for "efficiency talks" given each day by management. Not only were they not paid for this time, but if they showed up late, the workers would be fined two hours' wages.

Wages:   Below subsistence level wages; base wage of 60 cents an hour; with attendance and production bonuses plus overtime workers could earn 83 cents an hour, and $171 a month; this $171 a month falls more than $100 short of what the Salvadoran government itself says is necessary for a family to climb out of abject poverty and into relative poverty; no wage increase between 1997 and 2002, while a 13.5 percent inflation rate ate away at the real purchasing power of the workers' wages.

The base wage at Hanchang was 42 colones a day, or $4.80, and 60 cents an hour. This wage had not been increased since August of 1998. (It is important to note that the August 1998 minimum wage increase in El Salvador did not add a single cent to the workers' take home pay. The government had just privatized the national pension fund, and the 1998 wage increase was completely absorbed by increased deductions to the private pension fund. The workers' take home pay actually remained flat between 1997 and 2002.) The Hanchang workers were actually going backwards, as a compounded inflation rate of 13.5 percent between 1997 and 2002 seriously eroded the real purchasing power of the worker's base wage.

With the attendance bonus — known as the 7th Day's Pay in Latin American — a Hanchang worker could earn 1,260 colones a month, or $143.84, and 75 cents an hour.

Hanchang Worker's Wage
including the attendance bonus
(1,260 colones)
75 cents an hour
$6.03 a day (8 hours)
$33.19 a week (44 hours)
$143.84 a month
$1,726.03 a year

Hanchang also paid a production bonus of 57 cents a day if the worker reached her daily production goal or target, or $3.42 for the week. This could add another 8 cents an hour to the worker's wage, bringing it up to 83 cents an hour. Of course, not all workers could reach the excessively high production goals management set, so real wages in the factory ranged from 75 to 83 cents an hour.

Top Sewer's Wage at Hanchang
(includes attendance and production bonuses)

82 cents an hour
$6.56 a day (8 hours)
$36.61 a week (44 hours)
$158.64 a month
$1,903.72 a year

With overtime included, the workers reported earning on average approximately $171 a month. Even this wage of $171 a month, including all production and attendance bonuses in addition to overtime, still falls more than $100 short of what the Salvadoran government itself says is necessary for the average sized family of 4.3 members to climb out of "abject poverty" and into "relative poverty." According to the government, a worker would need to earn $288 a month in order to lift their family into "relative poverty."

Excessively high production goals:

Each worker had to sew 34 pairs of OshKosh children's pants a day, while being paid just 19 cents for each pair they sewed. Workers' wages come to less than 9/10ths of one percent of the retail price.

Every assembly line in the plant, composed of 64 workers each, was given a production goal by management — which was not negotiable — of completing 2,200 pairs of OshKosh children's pants in the regular eight-hour shift. In effect, this means each worker had to sew 34 pairs of pants a day (34.375) and a little over four pairs an hour (4.3). Even if we take the highest production wage in the factory of 83 cents an hour, this means the workers are being paid just 19 cents for each pair of OshKosh pants they sew. (83 cents an hour ÷ 4.3 pairs of pants = $0.1930)

Given that the OshKosh children's pants retail for $22.50 each, this means that the workers' wages amount to a little less than 9/10ths of one percent of the garment's retail price. ($0.19 ÷ $22.50 = $0.00857)

Abusive treatment:

Supervisors scream and curse at the workers; women not working fast enough are made to stand in the corner.

Supervisors constantly pressured the women to work harder and faster to reach their production goal. They would curse at them, yelling, "Damn you." Supervisors would loudly clap their hands near the workers' ears as they yelled at them. Top-level managers even used the factory's public address system to exhort and pressure the sewers to work harder.

To punish "slow" workers who were falling behind on their production goals, and to set an example for others, management would choose a few of these workers each day and make them stand in the corner, humiliating them in front of their co-workers, treating them as if they were bad school children.

Workers needed permission to drink water or go to the bathroom:

Workers needed permission to use the bathrooms, and were encouraged to go only when it was extremely urgent. Moreover, the bathrooms were filthy, lacking toilet paper, soap or towels. Only before announced visits by U.S. buyers were the workers forced to clean the bathrooms, and toilet paper was made available, even in abundance.

Factory temperatures could reach 97 to 100 degrees Fahrenheit in the hottest months, yet workers still needed permission to drink water. And the water was dangerously filthy, with bacteria levels in excess of 1,200 percent above international standards. The factory's drinking water also was contaminated with fecal matter. The water caused dysentery and infections.

Forced pregnancy tests:

Women had to submit to two mandatory urine analysis pregnancy tests, one upon entering the factory and another three months later. Anyone testing positive was immediately fired.

Limited access to health care:

A worker attending an appointment at the Social Security Hospital for medical care could be docked two days' wages.

U.S. Corporate Codes of Conduct meaningless:

Some codes were posted near the bathrooms (which the workers need permission to use) and by the drinking water (which is unsafe to drink). But those notices meant absolutely nothing to the workers. No explanation had ever been provided. However, the workers knew very well and first-hand the abuses they suffered each day.

Factory atmosphere thick with fear and intimidation; Blatant repression of the legal rights to freedom of association and to organize:

Management constantly threatened the workers against organizing, or daring to even think of it. Anyone suspected of harboring such intentions or thoughts would be fired immediately. The workers report that women were fired for merely being seen speaking with "outsiders," whom the management suspected could be connected to a union.

The Korean management was not shy and constantly told the workers: "If a union comes into the factory, it is going to die." "If a union is ever organized here, we are going to leave the country and shut down the factory."

The workers were told they would be thrown out on the street with nothing. The Hanchang workers had no voice and no rights.

Something Remarkable Happens

— The workers dare to fight for their rights —

Despite constant threats, and knowing that they would be fired immediately, blacklisted and thrown out of the factory without a cent if Hanchang management even suspected they were attempting to organize, a group of workers at Hanchang chose to do just that. They took a leap. They were sick of the constant abuse, threats, the humiliation of being yelled and cursed at, forced to work overtime under a threat of being fired, forced to endure mandatory pregnancy tests, struggling to meet excessively high production goals while being paid below subsistence wages, which in real terms were actually falling each year due to inflation, and needing permission to use the bathrooms and to drink water despite factory temperatures reaching 100 degrees Fahrenheit. It was too much. So in April of 2001, some of the workers started to meet secretly. Every one of them knew they would be fired if management found out.

Soon there was a group of over 40 workers meeting. But there were spies, and Hanchang management quickly found out that something was up. Management immediately targeted the most outspoken workers, those who in the past had dared to question the abuses and maltreatment on the part of the supervisors. The Korean manager, Jong Hak Kim, had the "suspects" brought to his office, where he tried to intimidate them. If they would give him "the names of the people behind the attempt to organize a union" he would "love them very much" and they "would have lots of work."

The workers refused to talk, but they knew they had to now move quickly, to go public and secure legal recognition of their union, so as to gain legal protection prohibiting the firing of the union's founding members and leaders.

On Sunday, May 13, 2001 at 9:00 a.m., the workers held an assembly at the Salvadoran Workers Central's (CTS) headquarters in San Salvador and formed their union — The Workers Union of the Hanchang Company (SITEHSA). The Salvadoran Labor Code allows a union 10 days to present the Ministry of Labor documentation on their "Constitutional Union Assembly," which includes notarized copies of the new union's statutes and a list of all the workers who attended and participated. The union presented the necessary documents to the Ministry on May 17. This is important since the Salvadoran Labor Code clearly states that founding union members have legal protection ("fuero sindical") prohibiting their firings for at least two months starting from the date of their assembly. Theoretically these workers were legally protected, and could now go about building their union without fear of reprisals.

Still, this took a lot of guts. The labor rights protections included in the Salvadoran Constitution and Labor Code were, after all, just pieces of paper. And to date, every single attempt to organize a union in El Salvador's booming maquila sector had been crushed through illegal mass firings. The maquila companies enjoyed — and still do — complete de facto impunity from the Ministry of Labor. These workers also knew that they were surrounded by massive poverty — 48 percent of El Salvador's people live in poverty — and huge un- and under-employment. If they were fired, the company could easily find a hundred, or even a thousand, of the desperately unemployed who would be anxious to take each of their jobs.

Despite the legal protections, on May 15, just two days after the workers held their union assembly, the firings started. That week 15 workers were fired, all of them founding members and newly elected union leaders.

These workers were called to the administration office and told to immediately leave the factory. Some of the union leaders were even escorted out of the Free Trade Zone by security guards. The firings were carried out by Mr. Victor Alas, Hanchang's Chief of Personnel at the time, who—like the current chief of personnel—was a former Labor Ministry official. Management also refused to pay the two weeks' base wages owed to five of the union leaders. This was illegal. The company withheld the desperately needed wages in an attempt to force the workers to say that they had voluntarily resigned, and had not been fired. Those illegally fired were:

Six fired union leaders:

Easy Noemi Mendez Ramirez   Secretary of Organization
Rafael Ulises Mendez Martinez   First Grievance Officer
Antonio Vazquez Reyes   Second Grievance Officer
Mayra Elisex Renderos Alvarado   Secretary of Health
Dora Alicia Martinez Sauchez   Secretary of Records and Agreements
Reina Guadalupe Cabrera Flores   Secretary of National and International Relations



Nine fired founding union members:

-Gregoria Julia de Lourdes
-Ana Maricela Orellana de Rivera
-Maribel del Carmen Hernandez Benitez
-Furgencia Isolina LÌ£ópez de Aguilar
-Eva Marisol Perez Vasquez
-Ana Josefina Campos de Aparicio
-Delmi Carolina Calderon Lopez
-Blanca Estela Villalta Arias
-Gloria Alicia Peralta

Sadly, there was nothing new about these firings; this was run-of-the-mill business as usual for the maquila companies. So too was the lack of response on the part of the Ministry of Labor.

A Second Remarkable Occurrence:

-A North American Company Does The Right Thing-

The day of the firings, the SITEHSA union sought help from the National Labor Committee's El Salvador office, which in turn immediately passed on this appeal to New York. A confidential alert was sent to the Phillips Van Heusen (PVH) Company. To our surprise, PVH responded immediately and seriously, sending a delegation of PVH representatives to El Salvador within nine days of the first firings. The delegation met with Hanchang factory managers, but also with the workers and the SITEHSA union. Hanchang managers claimed the firings were due to a necessary reduction in personnel and had nothing whatsoever to do with violating any right to freedom of association. (It must have been by sheer coincidence that all 15 workers fired were founding members and elected leaders of the new union they had formed just two days before the firings began.)

The PVH delegation asked Hanchang's directors to respect all of El Salvador's labor laws, including the workers' right to organize. We will never know exactly what was said, or just how forcibly it was put, but within days of the meeting all 15 fired workers were reinstated to their former jobs with back pay for the week they had been illegally fired.

Hanchang's manager, Jong Hak Kim, signed a reinstatement agreement with the SITEHSA union, in which the company committed that there would be no further reprisals against the reinstated workers. More good news came when the Ministry of Labor granted legal recognition to the SITEHSA union on July 13, 2001.

Over the next eight months things began to slowly change for the better in the factory. By March 2002, the SITEHSA union had grown to 250 members, and now represented 22 percent of the workforce of 1,112 workers.

Beginning in July 2001, the union held regularly scheduled meetings with management to resolve serious problems. For the first time in the nine years since the factory had opened, the workers now had a voice. They were sitting down and negotiating face to face with management. The new union won several concrete improvements. Mandatory pregnancy tests were ended. Several of the most abusive Korean supervisors were sent packing and relocated out of the factory. All physical punishment and humiliations ended, while verbal threats and harassment were drastically reduced. Management actually gave orders to the supervisors to improve their behavior toward the workers. The workers were now free to use the bathrooms and drink water whenever they needed to, and the bathrooms were regularly cleaned and supplied with toilet paper, soap and towels. Union members were no longer forced to work overtime; it was now a strictly voluntary decision for the worker.

These might seem like small steps, but to the workers they were concrete victories which clearly improved the working atmosphere within the Hanchang factory. The union proved that if the workers were willing to struggle they could win. These small victories lifted the self-esteem and dignity of the workers. They tasted just a little empowerment.

However, it was no walk in the park. Management refused to discuss wage rates, despite the fact that inflation was eating away at the real purchasing power of the workers' wages. Under Salvadoran laws, it is only when a union has 50 percent plus one of the total workforce affiliated that it has the right to negotiate a collective contract.

The same went for the production goals, which remained excessively high, and unchanged. Whether it was true or not, Mr. Kim told the union that "our main clients always demand very low costs, top quality, and on-time delivery. Every day they are pressing us on costs and fulfillment of delivery dates. And if we don't meet our clients' demands they will pull their work, switching it to another factory and taking their orders to another country."

For non-union workers, forced overtime remained the norm. And while on the one hand Hanchang management was meeting and negotiating with SITEHSA, on the other it continued an aggressive anti-union campaign to intimidate and spread fear among the non-union workers. Supervisors often told the workers, especially new hires, that the "ultimate objective of unions is to close factories" and as a result, everyone loses their jobs. Whenever it could get away with it, management warned the workers not to get involved with the union, because if too many did, they would be forced to shut the factory down.

Toward the end of 2001, and into January 2002, conditions worsened. Management decided on a policy of subtly harassing union members by repeatedly switching them around to different jobs or operations, assuring that as they struggled with new operations, their production and wages would fall. Other unionists were assigned the most difficult of jobs, and supervisors were instructed to target them for intense monitoring and harassment.

Then in March 2002, the company started firing workers without consulting the union. Management arbitrarily did away with the morning break, again without even speaking with the union.

To stop any further deterioration of conditions, the union organized a peaceful work stoppage on March 5, 2002. Even the Ministry of Labor had to confirm that the protest was "peaceful" respecting the right to work of the workers who wished to do so, without violence or coercion against anyone." The union continued to operate in good faith, seeking to reestablish regular meetings with management.

The eight-month hiatus had come to an end. By March 2002, the workforce was down to 1,112 from 1,300 the previous May. From that point forward, management shifted its attitude toward the union, almost entirely cutting off any communication with them. Conditions soon worsened. Harsh and abusive treatment on the part of the supervisors returned, including verbal threats, insults and humiliations. Now there were open attacks against the union. By June 2002, claiming a lack of orders, the company was firing an average of 100 workers a month.

It only became clear a few months later what was really going on. Hanchang had set out to accomplish two things at once, cooking up a plan to illegally avoid paying taxes in El Salvador, while at the same time getting rid of all the union leaders and activists. Hanchang did all this in broad daylight, right under the nose of the Ministry of Labor.

On September 2, 2002, Jong Hak Kim, Hanchang's Administrative Manager, announced that a new maquila company called Oriental Tex has been set up and officially inscribed in the government's Commercial Registry. Note that Oriental Tex came into existence exactly ten years to the day after Hanchang had been officially established and inscribed in the Commercial Registry on September 2, 1992. One does not have to be a rocket scientist to clearly see what Hanchang was doing. Maquila companies in El Salvador receive lavish tax breaks. They are 100 percent exempt from all corporate, municipal, and department or state taxes. They are 100 percent exempt from paying even local sales taxes. And, of course, there are no import or export tariffs on duties. The single catch is that these exemptions expire after 10 years. Hanchang was creating a "new" company, Oriental Tex, which would be housed in the exact same factory buildings, with the same administration, the same supervisors, the same legal representative, the same machinery, sewing the same labels, with the same ironing, inspection and packing departments, the same bathrooms, the same phone numbers, and the same workers. Only the workers would be fired — and then rehired by Oriental Tex to sit at the same machines doing the same exact work. The company would not rehire any of the SITEHSA union leaders or activists to work at their "new" company.

Hanchang was carrying out a blatant sham involving tax fraud and union busting, something they could never have gotten away with if the Salvadoran government officials had not first nodded approval and then turned their backs and gotten out of the way.

In the midst of the deteriorating labor rights conditions in the factory, with 100 workers being fired each month, with the union under constant attack, and with management quickly moving to set up a sham company to bust the union and avoid taxes, Hanchang proudly announced that it had been certified in June 2002 by WRAP, a monitoring system created and run by the U.S. apparel industry.

To assist the Salvadoran government in implementing its own laws, we offer the following information:

Hanchang sets up a sham company, Oriental Tex, to escape taxes and to bust the union.

Oriental Tex is a "new" company in name only.

-Oriental Tex is housed in the same buildings (Plant #2) in the San Marcos Free Trade Zone in Hanchang.

-Oriental Tex has the exact same administrators: Young Sup Kim and Jong Hak Kim.

-Oriental Tex has the same phone numbers as Hanchang: (503) 220-1271/72/73/74

-Oriental Tex has the same supervisors and the same attorney, Julio Rene Fuentes Rivera.

-Orientral Tex has the same machinery; same mechanics; same bathrooms; same boiler system; same pressing, inspections, packing, and warehouse departments; and the same workers as Hanchang, sewing the same labels for Wal-Mart and OshKosh.

Hanchang Textiles was founded on July 7, 1992 and began operations on September 2, 1992.

Oriental Tex was founded on September 2, 2002 (which is the exact date that Hanchang's 10 year 100 percent Free Trade Zone tax exemptions expired) and began operations as a "virtual" company alongside Hanchang in September 2002.

Hanchang's President, General Manager and President of the Board from 1992 - 2002, Young Sup Kim... a founding member of Oriental Tex and is Alternate Director of the Board.

Hanchang's Administrative Manager and Third Director of the Board, Jong Hak Kim... a founding member of Oriental Tex and is the Secretary Director of the "new" Board.

Hanchang's lawyer and public notary, Julio rene Fuentes Rivera...

...was the public notary for the founding of Oriental Tex.

To assist the Salvadoran government in implementing its own laws, we offer the following information:

  • Hanchang sets up a sham company, Oriental Tex, to escape taxes and to bust the union.
  • Oriental Tex is a "new" company in name only.
  • — Oriental Tex is housed in the same buildings (Plant#2) in the San Marcos Free Trade Zone as Hanchang.
  • — Oriental Tex has the exact same administrators: Young Sup Kim and Jong Hak Kim.
  • — Oriental Tex has the same phone numbers as Hanchang: (503) 220 1271/72/73/74
  • — Oriental Tex has the same supervisors and the same attorney, Julio Rene Fuentes Rivera.
  • — Oriental Tex has the same machinery;
  • same mechanics;
  • same bathrooms;
  • same boiler system;
  • same pressing, inspections, packing, and warehouse departments; and the same workers as Hanchang, sewing the same labels for Wal-Mart and OshKosh. Hanchang Textiles was founded on July 7, Oriental Tex was founded on September 2, 14 1992 and began operations on September 2, 1992.
  • 2002 (which is the exact date that Hanchang's
    10 year 100 percent Free Trade Zone tax
    exemptions expired) and began operations as a
    "virtual" company alongside Hanchang in September 2002.

Hanchang's President, General Manager and
President of the Board from 1992 — 2002,
Young Sup Kim"

  • "is a founding member of Oriental Tex and is
    Alternate Director of the Board.
    Hanchang's Administrative Manager and Third
    Director of the Board, Jong Hak Kim"
  • "is a founding member of Oriental Tex and is
    the Secretary Director of the "new" Board.
    Hanchang's lawyer and public notary, Julio
    Rene Fuentes Rivera"
  • "was the public notary for the founding of
    Oriental Tex.


What is WRAP: Worldwide Responsible Apparel Production?

WRAP is a so-called factory monitoring and certification system created and run by the U.S. apparel industry. It is the apparel industry's attempt to blunt the growing sweatshop allegations. WRAP's treasurer, James Jacobsen, is the vice chairman of the Kellwood company. Other members of the Board of Directors include the vice presidents of the VF Corporation and Sara Lee, the CEO of Gerber Childrenswear, and the executive director of the business lobby Caribbean/Latin American Action (CLAA). (Kellwood's Jacobsen is also vice-president of CLAA.) The chairman of WRAP's Board is former Ambassador Donald Planty, who is now a senior managing director of Manatt Jones, a business consulting group that helps companies implement "strategies to penetrate global markets."

Among the "participating organizations" belonging to WRAP are every major maquiladora business association in Central America and the Caribbean. Some of those best known for their extreme anti-union positions are:

♣ Salvadoran Sewing Industry Association (ASIC)
♣ Honduran Maquiladora Association (AHM)
♣ Non-traditional Products Exporters Guild (AGEXPRONT-Guatemala)
♣ National Free Zone Commission of Nicaragua
♣ Association of Industries of Haiti
♣ Dominican Association of Free Zones

WRAP is supposed to be a nonprofit organization, but fails to appear on either the IRS Charity Database or the Guidestar database of nonprofit organizations. Despite WRAP's high level connections to the U.S. apparel industry—the American Apparel and Footwear Assocation is also a "participating organization"—it prefers to operate in secrecy and outside of any public attention. WRAP has never shown up in any major newspaper or wire service story, and has never issued a press release. However, WRAP does have the evident respect and support of the U.S. Trade Representative's office. On January 8, 2003, the USTR's office put out a "Trade Facts" bulletin to discuss "innovative new ways" the "U.S.-CAFTA negotiations"[can] foster trade and development." Under the section, "Improving the Lives of Workers and Consumers" is the following:

♣ "Worldwide Responsible Apparel Production—a global factory certification program for best practices in the apparel and sewn products industries"will expand government, manufacturers and NGO participation in its factory compliance and labor inspection training activities."

Given the fact that there are no enforceable worker rights standards included in the proposed U.S.-Central American Free Trade Agreement, the USTR's office appears to be publicly promoting WRAP as the answer and key component in the Administration's commitment to promoting and protecting worker rights.

Just how effective will WRAP be as a promoter, monitor and defender of worker rights under CAFTA? How will WRAP work with local governments and maquila owners to assure "best practices in the apparel and sewn products industries?"

Concrete examples, such as the case of the Hanchang Apparel factory in El Salvador speak volumes. El Diario de Hoy reported on June 9, 2001 that Hanchang's owner immediately approached WRAP for membership right after his employees publicly denounced serious worker rights violations at his factory. Within a year and in the midst of mass firings, union busting, the return to systematic worker rights violations and apparent tax fraud, WRAP certified the Hanchang factory as a "best practices" maquila in full compliance with WRAP's rigorous worker rights standards.

The Salvadoran Sewing Industry Association (ASIC) also sees WRAP as an invaluable tool and ally. The extreme right-wing Salvadoran Sewing Industry Association sees WRAP as, "a weapon to impair the attacks of the U.S. unions saying that the Salvadoran maquila violates the legal rights of the workers. The Association considers that [WRAP] certification will provide great credibility for the country vis a vis the U.S. Congress."

ASIC is leading the fight in El Salvador to make certain that no enforceable worker rights provisions whatsoever are included in the CAFTA agreement. Increasingly, WRAP is becoming an important public relations tool to promote that position. ASIC is also opposing any increase in El Salvador's below-subsistence minimum wages.

The head of ASIC, maquila owner Escobar Thompson, announced in May 2003 that any Salvadoran workers caught providing information on worker rights violations in the maquila to international labor or human rights organizations would be immediately investigated and subject to court action. As a further threat, meant to silence any workers, he said that the names, addresses and personal data of the offenders would be published.



As was mentioned earlier, beginning in June 2002, the WRAP certified Hanchang factory started laying off an average of 100 workers per month. Soon, the "new" Oriental Tex company was up and running in the same Hanchang plant with four production lines, consisting of approximately 60 workers each, sewing garments for OshKosh.

By December 2002, Hanchang was down to 500 workers. Of course, Hanchang used the layoffs to get rid of the union, so the SITEHSA members were the first fired. The Phillips Van Heusen label was no longer in the plant, and according to rumors circulating around the free trade zone, may have even been asked to leave the factory by Hanchang management.

By April 2003, Hanchang had just 300 workers left, sewing the Puritan label for Wal-Mart and OshKosh. Hanchang announced that it would officially shut its operations down at 6:00 p.m. on April 30, 2003 — and cease to exist.

On April 25, 2003, the SITEHSA union sought a meeting with Hanchang's Administrative Manager, Jong Hak Kim. He refused.



On April 28, 2003, at the request of the union, the National Labor Committee wrote to the Salvadoran Minister of Labor, Jorge Isidoro Nieto, asking that Hanchang's closing be blocked until a thorough investigation by the Ministry could determine the legality of the closing and to guarantee that the legal status of the SITEHSA union would be extended to the "new" Oriental Tex company. We received no response.

On April 29, 2003, Hanchang's Human Resource Manager, Rene Gutierrez, a former Ministry of Labor official, called four of the most outspoken union leaders to his office, Emma Bustillo, Natividad de Jesus Mundo, Vitalia Carcamo and Antonia Gonzalez Palacios, and orders them to resign. They refused. Rene Gutierrez then threatened the few hundred workers still left at Hanchang that if they supported the union, they would be fired with nothing, receiving not a penny of the social benefits or severance pay owed to them, and they would be blacklisted from working at the "new" Oriental Tex.

On April 29, 2003, the Federation of Independent Unions and Associations of El Salvador (FEASIES) asked for a meeting with the influential and powerful Salvadoran Association of Sewing Industries (ASIC), seeking their last minute intervention to guarantee that the labor rights of the Hanchang workers would be respected. ASIC refused to meet.

On Wednesday morning, April 30, 2003, the day scheduled for Hanchang's closing, Rene Gutierrez, accompanied by four heavily armed security guards, was at the gate of the plant to prohibit the union leaders from entering. At 6:00 p.m. the Hanchang factory officially closed.

A week after the closing, the General Inspector of Labor, Rolando Borjas Munguia, a high level official at the Ministry, called the FEASIES federation asking for a meeting with SITEHSA and FEASIES representatives. He explained that the Minister of Labor himself was personally interested in quickly finding a positive solution to their case, and had asked him to directly intervene. The meeting took place on Tuesday, May 6, 2003. Toward the end of the meeting, after several failed attempts, the Labor Official again phoned Hanchang / Oriental Tex, this time finally getting through to Human Resource Manager Rene Gutierrez. It was agreed to that Rene Gutierrez would meet with the union the following morning at the Ministry of Labor. However, on May 7, 2003, Rene Gutierrez failed to appear. The General Inspector of Labor called the factory again and another meeting was scheduled for Thursday, May 8, 2003. This time Hanchang / Oriental Tex sent their lawyer to represent the company. As they were being fired, the workers asked for their complete back pay and legal benefits, and to be reinstated at Oriental Tex with legal recognition of their union. After all, other than a mere name change, the workers explained there was absolutely no difference between Hanchang and Oriental Tex. It was the very same factory, with the same workers at their same sewing machines, sewing the same labels. It was only common sense that the SITEHSA union should also be the same and recognized at Oriental Tex.

NLC letter to Salvadoran Minister of Labor

National Labor Committee
Education Fund in Support of
Worker and Human Rights

275 7th Ave., 15th Floor
New York, NY 10001
Phone: 212-242-3002
Fax: 212-242-3821


April 28, 2003

Lic. Jorge Isidoro Nieto Menedez
Ministro de Trabajo y Prevision Social
Paseo General Escalon # 4122
San Salvador, El Salvador


Fax: (503) 263-5272, 263-5439

Dear Mr. Minister:

I write to urge your immediate intercession and initiation of an investigation at the Hanchang Textile Company in the San Marcos Free Trade Zone. Recent downsizing maneuvers on the part of Hanchang management appear in fact to be a cover for illegally destroying the SITHESA union at the plant—and avoidance of taxes.

The Hanchang Textile Company began operations in El Salvador on July 7, 1992 and is inscribed in the Commercial Registry under number 41 of Book 863. Mr. Yung Sup Kim is listed as the presiding director and general manager of Hanchang and Mr. Jong Hak Kim is listed as a director.

On May 13, 2001 the Hanchang Textile Workers Union was formed. In response, just two days later, Hanchang management illegally fired all the newly elected union leaders. However, through the intercession of your Ministry of Labor along with efforts on the part of the Phillips Van Heusen company, the SITHESA union leaders were reinstated on May 24, 2001. Then on July 13, 2001, the Ministry of Labor extended official legal recognition to the SITHESA union. Despite ongoing antiunion discrimination, threats and repression on the part of Hanchang management, within months the union had won approximately 250 affiliates. Through the intercession of the SITHESA union, pregnancy testing at the factory was ended, as was physical abuse. The workers won the freedom to use the bathroom as needed and to attend social security medical appointments.

However, Hanchang management continued to demand mandatory overtime while constantly pressuring workers—using verbal abuse—to work faster to meet excessively high production goals. The anti-union discrimination and repression also continued. Still, through the union, the workers at least had a vehicle to negotiate and dialogue with the company to attempt to resolve daily problems as they arose.

Then, in August 2002, Hanchang began firing workers and providing them with their severance pay only to rehire them a short while later as employees of the "new" Oriental Textile company. The "new" company was registered on September 2, 2002, in Number 27 of Book 1738 of the Commercial Registry. The same Mr. Yung Sup Kim who was general manager of Hanchang now becomes the vice director of the "new" Oriental Textile company, while the same Mr. Jong Hak Kim remains director of the "new" Oriental Textile company exactly as he was as Hanchang.

In fact, there was nothing new at all about the Oriental Textile company. As workers were fired from Hanchang, many were rehired to work for the Oriental Textile company, which remains in the very same plant—under the same roof—as Hanchang. Indeed, from September 2002 on, as Hanchang was being downsized, the remaining Hanchang sewing operators worked side by side with the "new" Oriental Textile workers, the vast majority of whom were former Hanchang workers, sharing the same administrators, the same pressing and packing departments, the same inspectors, the same loading dock and bathrooms, and so on.

Hanchang and Oriental Textiles are one and the same company, owned by the same people and operating out of the very same building in the San Marcos Free Trade Zone. Management has now announced that as of Wednesday, April 30, the Hanchang company will be terminated. Following several mass layoffs in April, only about 80 Hanchang workers remain, and now they too will be fired on Wednesday.

This slight of hand by Hanchang management, merely changing their company's name to Oriental Textile while remaining in the same plant, with the same management and owners, and with many of the same workers, clearly appears to be an illegal maneuver or cover to fire the leaders and destroy the SITHESA union. Also, as the ten-year free trade zone tax-exempt status of Hanchang expired, forming the "new" Oriental Textiles company served as a front to avoid paying taxes owed to the people of El Salvador.

These are very serious allegations which merit a full-scale investigation, especially in light of the ongoing negotiation of the Central American Free Trade Agreement. While the investigation is underway, the closure of Hanchang should be blocked. If management insists upon going ahead with the mere name change to Oriental Textile. The 12 members of the union's executive board-who enjoy "fuero sindical" through May 12, 2004-must also be given the option to transfer to Oriental Textiles and to continue with their union work free of discrimination and repression.

Thank you for your kind attention to this very serious case. I anxiously await your response.

Sincerely yours,

Charles Kernaghan

Hanchang / Oriental Tex's lawyer, Rene Fuentes, said he was very sorry, but the union leaders were mistaken to think they were being fired. Rather, they were being laid off due to the unprofitability of Hanchang and its necessary closing. Therefore, the company had no responsibility to rehire the laid off union workers at Oriental Tex, which was a "new" corporation and, of course, their union died with the closing of Hanchang. Fuentes went on to explain that he had no right to impose a union on the Oriental Tex workers (never mind that they were the same Hanchang workers who supported the union, most of them secretly so they would not be fired).

The Ministry of Labor official simply agreed: Oriental Tex was legally a new "society" or corporate entity and the laid off workers had no right of reinstatement and their union had no right of recognition at Oriental Tex. The case was closed.

However, the Ministry official, Rolando Borjas Monquia, had overlooked an important Ministry of Labor responsibility, namely that a labor judge must first authorize such a plant closing based on the company's providing proof that Hanchang had been unprofitable for at least the last three months. To date, the Labor Court has not authorized Hanchang's closure. If Hanchang was really losing money, where did the funds come from to set up an identical operation in the same factory, which in reality was just a name switch? Moreover, another new company has appeared, called Lico Tex, which was founded on May 6, 2003 and is now advertising to hire workers. What a surprise to see Jong Hak Kim — founder of both Hanchang and Oriental Tex, and Rene Gutierrez, Hanchang's Human Resource Manager, in charge of interviewing potential new employees for Lico Tex. What a surprise to see that the interviews were to take place at the Hanchang / Oriental Tex plant in the San Marcos Free Trade Zone. What a surprise that Lico Tex has the same address and phone numbers as Hanchang.

On May 16, the SITEHSA union was dissolved. In order to receive their back wages and benefits, the union leaders had to sign an agreement that they had not been illegally fired, but rather had been laid off with justifiable cause. Neither they nor the union had the right to make any further claims on the Hanchang Company. Finally, as a last indignity, Hanchang cheated the union leaders of 85 percent of the legal union protection fund that was owed to them. (Under Salvadoran law, elected union leaders are protected by requiring companies to pay a full year's wage in the event of firings, layoffs or demotions.) Due to a lack of any savings resulting from below-subsistence wages and the need for them and their families to survive, the fired union leaders were forced to accept whatever management had offered.

Coming Full Circle:

-Hanchang / Oriental Tex is once again a sweatshop producing for Wal-Mart-

Oriental Tex started operating in September 2002 in the Hanchang plant. By May of 2003, there were seven production lines, with approximately 50 workers in each line, sewing the Bobbie Brooks label for Wal-Mart. In total, there were about 400 workers, including administration, maintenance, and the cutting and packing departments. Working conditions at Oriental Tex have reverted back to the abusive sweatshop conditions that had prevailed at Hanchang prior to the workers forming their SITEHSA union.

Abusive Working Conditions at Oriental Tex (May 2003):

Mandatory overtime:

11 to 12 hour daily shifts / Forced to work 14 to 27 hours of overtime each week / Workers are at the factory 64 to 78 hours a week.

The regular shift at Oriental Tex is Monday through Friday from 7:00 or 7:15 a.m. to 4:00 p.m., or nine hours, with an hour off for lunch. However, it is mandatory to remain for 2 to 3 hours of overtime each day, making the standard shift 11 to 12 hours, from 7:00 a.m. to 6:00 or 7:00 p.m. Every other Saturday, there is an obligatory nine-hour shift from 7:15 a.m. to 4:00 p.m. When rush orders need to go out, there are also obligatory Sunday shifts from 7:15 a.m. to 4:00 p.m.

If a worker asks to be excused from overtime work because her children will be left alone, or she is sick, she is taken to the manager's office and either forced to sign a warning letter or fired immediately. After receiving three such warning letters, a worker can be fired without receiving a penny of the severance pay or other social benefits legally owed to her.

Under this schedule, workers could be at the factory 64 to 69 hours a week. At the extreme, when they are forced to work on Sunday, they could be at the factory up to 78 hours a week. It is not uncommon to be forced to work 14 to 27 overtime hours a week.

Workers have no voice; harsh and abusive treatment has returned: Once again, supervisors patrol the lines, loudly instructing the workers "not to be lazy;" to "keep their eyes on what they are sewing;" "not to sit there staring from side to side or looking up;" "not to stand up unless it is absolutely necessary for work;" and "not to speak with the ones sitting beside you."

Supervisors are back to openly threatening workers that if they do not reach their production goals, they can be fired. Because, "here we want people who work and who reach their goals."

Workers need permission to use the bathrooms: Workers must again ask permission to use the bathrooms and receive a "toilet pass" from their supervisor. There is just one pass or badge for each line of 50 workers, meaning there are often long waits before your turn comes. Once again, the bathrooms lack toilet paper, soap and towels.

Charging the workers to pay for first aid kits: Management is now actually charging the workers $1.00 every two weeks in order to purchase basic medicines for emergency first aid kits. For the workers, this amounts to the loss of a lunch, or more than an hour's wage. (Of course, by law, the employer must provide emergency first aid kits supplied with basic medicines.)

Wal-Mart and other Corporate Codes not posted: Not only are the Corporate Codes not posted anywhere in the factory, but the workers have no idea that such codes exist, let alone that these Corporate Codes could possibly help them. Management has never mentioned this.

Management warns that if the workers try to organize they will be fired just like the Hanchang unionists were: Management is once again openly threatening the workers, telling them that it is absolutely prohibited to organize a union at Oriental Tex. After all, they explain: "Hanchang was closed because of the union and now, if the workers want to keep their jobs, they should learn from this lesson." The company only wants these "workers to have better luck than the Hanchang workers had."

Food, Utilities, School and Clothing Examples in El Salvador (2003)




In Colones

In Dollars



2 lbs.





2 lbs.





2 lbs.





2 lbs.





3 units





3 units





4 units



Instant Soups


2 envelopes





½ bottle





10 units





1 lb.





1 ½ lb.





2 lbs.





½ lb.





½ lb.





1 can





2 ½ lbs.



String Beans


½ lb.





½ lb.



Sour Cream


½ bottle





4 envelopes





1 bundle





1 bundle





2 units





1 unit





1 unit





5 units




















Toilet Articles        
Toilet Paper   8 rolls 9.50 1.08
Toothpaste   1 tube 9.00 1.03
Laundry Soap   3 units 12.50 1.43
Body Soap   2 units 7.00 0.80
Detergent   1 bag 8.00 0.91
Shampoo   1 bottle 19.00 2.17

Education Expenses








Monthly Payment




School Materials at the beginning of the year




School Uniform











Monthly Utility Expenses      


  40.00 4.57
Water   40.00 4.57
Gas   38.00 4.34
House Payments   200.00 22.86
Taxes for the house   34.00 3.88






Cost of Clothing      
(every 6 months):      
2 outfits of shorts and blouse   87.50 10.00
for a six year old girl      
1 outfit of shorts and blouse   43.75 5.00
for an 8 month old girl      
1 dress for an 8 month old girl   35.00 4.00
1 adult blouse and pants   87.50 10.00
1 adult dress   100.00 11.43
1 pair of shoes for a girl   122.50 14.00
1 pair of women's shoes   105.00 12.00
1 pair of shoes for 8 month   150.00 5.71
old girl      

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