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September 17, 2010  |  Download PDF  |  Share

Alianza Fashion: A Test Case for the Guatemalan Government & the Office of the United States Trade Representative


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Click here to go to the Alianza Fashion campaign page.

 

Table of Contents

 

Executive Summary

About CEADEL

Preface

Profile of Alianza Fashions and its U.S. Customers

Factory Conditions at Alianza Fashion

Illegal Firings, Denial of the Right to Organize, Blacklisting

Death Threats Against CEADEL's Leaders end, but hatred persists

Illegal Firings at Alianza Fashion Expose Social Security Fraud

The Workers' Demands

 

ADDENDA

Three examples of workers letters of dismissal and IGSS records, translated into English

Letters of dismissal and IGSS records of 20 fired workers, original documents

Alianza's U.S. Buyers

 

 

Executive Summary
 

  • On July 30, 2010, the United States Trade Representative filed a case against Guatemala for the systematic violation of workers’ legal rights—the first such case brought under a U.S. free trade agreement.
     
  • Alianza Fashion in Guatemala, with 1,350 workers, sews garments for Briggs New York, Sag Harbor, Fashion Bug, Alfani and JM Collection.
     
  • Forced overtime, 10 2/3 to 12 1/5 hour shifts—7:30 a.m. to 6:10 or 7:40 p.m., six days a week are the norm.  Workers are at the factory up to 71 ½ hours a week.  Workers who can’t stay for overtime are told they “have the opportunity to resign immediately.”
     
  • Workers are allowed 20 minutes to sew each pair of pants.  Supervisors yell and curse at the women, “Hurry up, you shit!”
     
  • Workers are paid 95 cents an hour--$1.21 an hour counting bonuses—which does not come even close to meeting basic subsistence needs.
     
  • Workers exercising their legal right to organize are immediately fired and blacklisted.  The Guatemalan Government has done nothing to protect worker rights.
     
  • Leaders of the Center for Studies and Support for Local Development, CEADEL—a local human rights NGO—have received death threats for assisting Alianza workers.
     
  • Alianza Fashion management appears to be systematically robbing workers of their Social Security deductions, leaving them and their children without health care, or their pensions.
     
  • The Alianza workers must be made whole again and an independent investigation of the Social Security Institute must be undertaken.
     
  • The Alianza Fashion case provides one more example of the continued failure of corporate factory monitoring.
     
  • The U.S. labels should not cut and run from the Alianza factory.  That would only punish the workers further.  The U.S. companies should work with management to finally bring the Alianza factory into compliance with Guatemalan labor law and U.S. CAFTA labor provisions.
     

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About CEADEL

 Center of Studies and Support to Local Development

CEADEL

The Center for Studies and Support for Local Development, based in Chimaltenango, is a non-profit organization dedicated to assisting and accompanying garment ¨maquila¨ and agro-export workers, eradicating child labor and supporting workers´ right to organize. 

CEADEL offers worker training in human and labor rights and labor law as well as courses to allow workers to complete their primary education and build vocational skills (including computers, baking, electrical work).

CEADEL also offers legal assistance and support for worker efforts to organize. 

CEADEL and the National Labor Committee have collaborated in a number of successful joint campaigns to improve conditions and end violations in factories.  These include campaigns on the Legumex frozen fruit and vegetable processing plant and Fribo apparel factory in 2007, and the Sam Bridge and Nicotex apparel maquila factories in 2008 and 2009, respectively.

 

CEADEL/ Centro de Estudios y Apoyo al Desarrollo Local

Colonia El Esfuerzo, Parcela 182, zona 1
Chimaltenango, Guatemala

Telephone: (502) 41476985 and (502) 55676439
E-mail: [email protected] , [email protected]
Website: www.ceadel.org.gt

Gabriel Zelada : Director
Gladis Marroquín:  Project Coordinator

 

Phones: (502) 78393349 and (502) 41476985
E-mails: [email protected], [email protected]
Website: www.ceadel.org.gt

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PREFACE
What is at Stake?

By
Charles Kernaghan

It is almost impossible to overstate the potential impact that the United States Trade Representative's case against Guatemala-for the systematic violation of legal workers' rights standards-can have across Central America.

What we know is that from January 1, 2004 through July 2010, Guatemala exported $10.5 billion worth of garments to the U.S., which entered duty free.  If we take the general tariff on trousers, which is 28.2 percent, we can estimate that garment factories in Guatemala have been the beneficiaries of nearly $3 billion in tariff breaks.  What have the American people or the workers in Guatemala gained?  Absolutely nothing.  For the last six and a half years, despite billions in tariff breaks, there have been zero improvements in respect for fundamental worker rights.

We also know that "Sag Harbor Stretch Woman" pants with "The Slimming Solution" design made in Guatemala enter the U.S. with a landed Customs value of $10.54.  This $10.54 accounts for the total cost of production of the pants including fabric, thread, assembly and shipping costs.  Retailers sell the pants for $36.00, which represents a hefty mark-up of $25.46.  Surely there is enough money here to make at least modest improvements in respect for worker rights.  But nothing changes.

There are also other players involved.  Sag Harbor pants are sold at Kohl's, Sears, Meijers, even U.S. military exchanges.  One would think that such an impressive group could get it right and insist on worker rights improvements.  No such thing is happening.

We also know that Sag Harbor and Briggs New York have been monitoring the Alianza factory for years now.  In fact, at the end of August auditors from Briggs New York paid another visit to Alianza.  The monitors could speak with any worker they chose to.  But it's all a game and the workers know what they must do.  Management advises the workers:  "Remember, if things go well with the monitors we will have plenty of work until at least December."  Some supervisors are more direct, instructing the workers not to talk about what goes on in the factory... "You have to say everything is okay."  The same game is played over and over again, with no gain for the workers.

It is an open secret that corporate monitoring does not work.  Mr. John Ruggie, the special representative to the United Nations Secretary General for human rights and transnational corporations told Women's Wear Daily (June 4, 2009) that, "Just about everybody, at least off the record, will tell you that monitoring doesn't work and auditing of supplier factories doesn't work, because people cheat." (Women's Wear Daily Article)

These are the reasons that the USTR's case against Guatemala could be a turning point, where we can finally call a spade a spade.  If Guatemalan factories continue violating fundamental workers rights standards, they may now have to pay a price.  The joy ride for these sweatshops is over.

 

Workers meeting at CEADEL

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Alianza Fashion, S.A.

Kilometer 52 ½ Carretera Interamericana
Chimaltenango, Guatemala

Owner/Legal Representative: Mr. Bong Choon Park Seo
General Manager: Mr. Rubén Enrique Rosales Ovalle
Ownership: South Korean

 

 

 

Phone: 502-772-02100
Fax: 502-772-02121
Email: [email protected]

 

 

 



Number of workers: Approximately 1,350, of whom 80 percent are women.

Production/Labels:  Briggs New York (Kellwood, sold at J.C. Penney and Sears), Sag Harbor (Kellwood, sold at Kohl's, Sears, U.S. Military Exchanges, Meijer and others), Fashion Bug (Charming Shoppes), Alfani (sold at Macy's and Bloomingdales) and JM Collection (a private label sold exclusively at Macy's).

Alianza also regularly subcontracts to another Korean-owned factory, Avandia, which is located in El Zapote, Guatemala.  It is possible that Alianza Fashion owns the Avandia plant, as their listed email address is ([email protected]).

In the month of August 2010, Alianza Fashion shipped 665,992 garments to the United States, the overwhelming majority of which were "ladies woven pants."  The Briggs New York and Sag Harbor labels accounted for over 40 percent of total imports.  Along with the pants, Alianza shipped a much smaller number of women's skirts and jackets.  As of September, the Fashion Bug label appears to account for the majority of production.

Label being produced at Alianza Factory in September 2010

 

In the last year to date, the September 1, 2009 to August 31, 2010, Alianza Fashions exported well over 6 million garments to the U.S.

South Korean factories like Alianza Fashion and Avandia dominate Guatemalan garment exports to the U.S.  Of a total of 155 garment export factories, 88-or 57 percent-are South Korean-owned.

In 2009, Guatemala exported $1.1 billion worth of garments to the U.S.  Since being awarded duty-free access under the Central American Free Trade Agreement (CAFTA) in 2004, Guatemala has shipped $10.53 billion worth of garments to the U.S. (January 1, 2004 through July 31, 2010).

Guatemala is the 13th largest apparel exporter to the U.S. in the world.  However, taken together, the CAFTA countries exported $6.14 billion of garments to the U.S. in 2009, making them the world's second largest supplier of apparel to the U.S. after China.

On July 1, 2006, Guatemala ratified the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), which allowed the regions apparel export to enter the U.S. duty free as long as the yarns and fabrics used in sewing the garments were made in the U.S.   The United States then back-dated CAFTA to January 1, 2004, meaning that Guatemala and other beneficiary countries were granted tariff credits equal to the duties being paid from January 1, 2004 on.  In the case of Guatemala, the garment factories received tariff credits from January 1, 2004 to June 30, 2006.

Duty-free access to the U.S. market under the CAFTA-DR Free Trade Agreement was supposed to be conditioned upon beneficiary countries guaranteeing respect for national and internationally recognized worker rights standards.

"A party shall not fail to effectively enforce its labor laws, through a sustained or recurring course of action or inaction, in a manner affecting trade between the parties, after the date of entry into force of this agreement."  (CAFTA-DR Article 16.2 / Enforcement of Labor Laws)

As the Alianza Fashion case will clearly demonstrate, the Guatemalan Government has failed miserably in its commitment to protect the legal rights of Guatemala's workers.  Over the past five years, the Guatemalan Government and garment factories have blatantly violated every labor law in Guatemala.


Labels smuggled out of the Alianza Fashion Factory in February 2010

 

           


Sag Harbor has been produced for years in Alianza. This "Sag Harbor Stretch Woman" label was smuggled from the factory in February 2010.           Briggs New York label smuggled from Alianza Fashion

          

 

Workers recognized this style of "Sag Harbor Stretch Woman" pants, purchased in Kohl's.                                  
              Briggs New York women's pants purchased at a Sears Store in Massachusetts, which the workers recognized in photos as one they had worked on.     

 

           

This Alfani label, smuggled out of the Alianza factory in August 2010 was sewn into women's black pants.

 

 

 

        

"Alfani" "curvy fit" "ebony black" pants purchased in a Macy's store in Massachusetts. This Fashion Bug label (above) smuggled from the Alianza factory perfectly matches the label on pants purchased recently in a Fashion Bug store in Pittsburgh (below).

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Factory Conditions at Alianza Fashion

Long Hours and Forced Overtime

The regular legal work week in Guatemala is 44 hours.  At Alianza the official shift is from 7:30 a.m. to 4:10 p.m.-8 2/3rds hours-Monday through Friday, with a 40-minute break for lunch.  On Saturday, the regular shift is four hours, from 7:30 a.m. to 11:30 a.m., bringing the work week to 44 hours.

However, at Alianza, actual working hours Monday through Friday are from 7:30 a.m. to 6:10 or 7:40 p.m. -10 2/3rds to 12 1/5th hours a day-with a 10 ½ hour shift on Saturday from 7:30 a.m. to 6:10 p.m.  All overtime is mandatory and the workers cannot leave the factory until their daily production goals are complete. 

One woman sewing operator recently explained: 

"Our working time is from 7:30 a.m. to 4:10 p.m., but that is a lie, because we get out at 6:10 p.m. or 7:40 p.m., as it's impossible to reach the goal by 4:10 p.m.  We can't do it.  So we have to stay working until we reach the target of 1,200 pants [per module or line].

At the low end, Alianza workers are at the factory 64 hours a week, putting in 10 2/3 hour shifts, six days a week.  Not counting the 40 minute lunch break, the workers are actually working 60 hours a week including 16 hours of mandatory overtime.  At the high end, workers are at the factory 71 ½ hours a week, putting in 12 hour and 10 minute shifts Monday through Friday, from 7:30 a.m. to 7:40 p.m., while working a 10 2/3rds hour shift on Saturday, from 7:30 a.m. to 6:10 p.m.  Not counting their lunch breaks, the workers are actually toiling 67 ½ hours a week, including 23 ½ hours of overtime, all of it obligatory.

There are also shifts from 7:30 a.m. to 9:10 p.m. -13 2/3rds hours-once or twice a month before shipments must leave.

Workers report that the factory is "full of work" and that "workers in the cutting and packing departments are working to 11:00 p.m. almost every night," putting in 15 ½ hour shifts.  Even if the cutting and packing departments worked just three 15 ½ hour shifts each week, this would put the workers at the factory for a grueling 81 ½ hours a week.

Without warning on July 12 and 13, almost half the workers-600 or so out of the 1,350 total-were forced to stay until 11:00 p.m., putting in back-to-back 15 ½ hour shifts.  The chief of personnel told the workers:  "Those of you who do not want to work overtime have the opportunity to resign immediately."  Such last minute overtime is a very serious problem for many workers, who either live far from the factory or live in neighborhoods too dangerous to be returning home at such a late hour.

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"Hurry Up, You Shit!": 

Women in Guatemala abused sewing clothing for women in the United States

There are 17 assembly lines (also called modules) at the Alianza factory, with 50 workers on each line.  Women's pants make up 88 percent of total production-15 out of 17 lines-with just two lines making jackets for Sag Harbor and Fashion Bug.

Management arbitrarily sets the production goal at 1,200 pants per eight-hour shift, or 150 per hour.  This means the sewing operators have just 20 minutes to complete each pair of pants.  For pants without pockets-which require less sewing-the goal is raised to 1,500 pants per shift.

It is impossible for the workers to reach this goal.  "They demand high quality and that we reach the target," one sewer told us, "but the synthetic cloth is difficult to handle."  "It also takes more time," another worker explained, "when the cloth has squares or stripes which have to be perfectly aligned at the waist and at the front and back."

 

Pin stripes on these Sag Harbor pants make sewing difficult.

 

As we have seen, workers are routinely kept for two or more hours of mandatory overtime each day, unable to leave until they reach their goals.

Supervisors and the Chief of Production are constantly walking the shop floor shouting "Hurry up.  Hurry up or we are going to have to get rid of you!" and "Hurry up!  Make those fucking 100 pieces you shit!"... "Go to hell.  You're good for nothing. Hurry up!"

Moreover, the workers explain, "The supervisors and the inspection department are very strict.  They want 100 percent quality.  If we make a mistake in the sewing, they take us to the office.  They started a new policy in August.  If we get a written warning for poor quality, we have to pay 100 Quetzales [$2.40], which of course we can't pay it, because we haven't any money, so the factory deducts it from our wages."

There are several very abusive supervisors, the workers tell us, especially one called Victor.   He shouts, "You old whore, why don't you work faster!"

It is not uncommon for the women sewers to cry.  "Supervisors shout at us and scold us...and we, as women, are humiliated."

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Ninety-five Cent-an-Hour Minimum Wage

The base wage for garment workers in Guatemala is 95 cents an hour and $7.60 for an eight-hour shift.  However, in Central America, they pay what is called the "Seventh Day's Pay," which acts as a sort of attendance bonus.   If workers do not miss any days, they will be paid for all seven days, not just the six days they work.  So garment workers can earn $1.21 an hour.  (95¢ x 8 hours x 7 days = $53.20;  $53.20 ÷ 44 hours work/week = $1.21 per hour.)

Workers appear to be paid more or less correctly at the Alianza Fashion factory.

Wage with 7th Day Attendance Bonus

$1.21 per hour
$9.67 a day (8 hours)

$53.20 a week

$230.53 a month
$2,766.40 a year


The $1.21 an hour wage does not come even close to providing basic subsistence level needs.  Alianza workers live from hand to mouth, trapped in poverty.

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Illegal Firings, Denial of Right to Organize, Blacklisting

There is not a single functioning union with a collective contract in any of the 155 garment export factories across Guatemala.  The companies refuse to recognize unions and routinely resort to threats of reprisals and firings to block organizing drives.  The Guatemalan Government is completely passive and does nothing to protect the workers' legal right to organize.  The Ministry of Labor is dysfunctional.

  • On February 2, 2010, a group of 20 workers at Alianza Fashion with the help of CEADEL, organized an "Ad Hoc Committee," which is the first step toward organizing a union.  They were immediately fired.  Under Guatemalan labor law, the founding members of an ad hoc committee/union are legally protected and cannot be demoted, transferred, fired or retaliated against in any way.  As the country's labor laws are not enforced by the Guatemalan Government, Alianza factory management did not hesitate, even for a second, before illegally firing the founding Ad Hoc Committee members.

List of Alianza Workers Illegally Fired on February 2, 2010
For Daring to Exercise Their Legal Right to Organize

No.

First Name

Last Name

1

Pedro

Buch Iboy

2

Lucia

Riquiac Mendez

3

Juan José

Marroquin Vasquez

4

Pedro

Sen Mejia

5

Malaquias        

Yol Cheroque

6

Norma Judith

Buch Thic

7

Maria Eufemia

Pichiya Cana

8

Diana Lily

Chacal Subuyuc

9

Rumualdo

Ambrocio Agustín

10

Ledy Marilú

Lémus Ris

11

Roxana Elizabeth

Gónzalez Salazar         

12

Aida María

Gónzalez Salazar

13

Carmen Angelica

 Salazar

14

Isaias Ajquill

Velásquez

Note:  Six of the 20 fired workers fled the factory in fear and have not maintain contact with CEADEL.

 

  • In early March 2010, another group of 32 Alianza workers tried again to exercise their legal right to organize an ad hoc committee.  All 32 workers were illegally fired by Alianza factory management on March 25 and 26, 2010.

Once again, the Ministry of Labor did not lift a finger to protect or enforce these workers' legal right to organize.  Some of the illegally fired workers are now blacklisted.

List of 32 Alianza Workers Fired on March 25 and 26, 2010
For Exercising their Legal Right to Organize

 

 

No.

 

 

Name of the worker

 

Workers Seeking

Reinstatement

 

Years working at Alianza

1

CESAR   AUSTO  REYES COTZAJAY

X

9 years

2

MARVIN ADOLFO ZAMORA MORALES

X

6 ½ years

3

ERICK FERNANDO ACETÚN ESTRADA

X

8 years

4

ERICK AMILCAR  ACETÚN ESTRADA

X

7 ½ year

5

CARLOS ARTURO LOPEZ PABLO

X

1 ½ year

6

ANTONIO VELASQUEZ TZAMPOP

X

2 years

7

MAYRA LORENA CALLEJAS SALAZAR

X

2 ½ years

8

EDGAR BENAJAMIN BORRAYO CAMEY

X

2 years

9

JOSE MARVIN GOMEZ FARFAN

X

6 ½ years

10

VILMA MARINA SOCOP TOMA

X

9 years

11

SELVIN AMILCAR SITÁN NIMAJUAN

X

9 years

12

ELVA  SUNUC  RUIZ

X

7 ½ years

13

JOSE  HAROLDO  SOCOY   CHUP

X

7 years

14

JOAQUIN LASTOR  VELASQUEZ

X

4 ½ years

15

ELMER  RONALDO GALINDO  ITZAY

X

6 ½ years

16

EDGAR ALVA ACUTA

X

2 years

17

SARA  ABIGAIL ATZ  CALAN

X

3 years

18

MANUEL  DE  JESUS  RUMPICHI LARA

X

4 ½ years

19

HERMEJILDO CALAN CASTRO

X

6 years

20

JOSE DOMINGO RAMOS FIGUEROA

X

9 years

21

LUIS PATZAN LARIOS

X

9 years

22

PEDRO ACEYTUNO LUX

X

5 ½ years

23

HECTOR OSWALDO SAQUIL CHOC

X

4 years

24

ISABEL CHOPOX CURRUCHICHE

 

 

25

CESAR OBDULIO MORALES TAGUAL

 

 

26

MARTALIZOLIVIA AMBROSIO TZIRIN

 

 

27

EDWIN BERNARDO CHIROY TATAGUIN

 

 

28

PEDRO PICHOL AZURDIA

 

 

29

VICTOR MACZUL XEP

 

 

30

EDWIN GIOVANNI XOYON SUY

 

 

31

JAIME OVIDIO XICON SIRIN

 

 

32

JORGE MARIO MENDEZ VALLE

 

 

 

As can be seen from the list above, the majority of these illegally fired workers were senior employees, with six to nine years experience working at Alianza.  It is obvious there was no problem with their work.  Their "crime" was to organize a union.

Twenty-three of the fired workers have refused to accept severance pay-which would make their firing legal-and continue to struggle for reinstatement and their right to organize.  With CEADEL's assistance these 23 workers have also filed a legal suit against Alianza Fashion management demanding reinstatement, but this could take months, if not years, to resolve.  Nine other founding members of the second ad hoc committee, feeling their legal rights would never be protected, have taken their severance and left.

 

  • Illegally Fired Workers Are Targeted with Blacklisting

The illegally fired union leaders-who have refused to take their severance pay and continue to struggle for reinstatement-still have to find work in order to feed and house themselves and their families.

It is now feared that Alianza Fashion's general manager, Mr. Ruben Enrique Rosales, is circulating a list of the fired union leaders among other South Korean-owned factories in the Chimaltenango area.

Joaquin Lastón Vásquez, who was illegally fired in March for organizing a union at Alianza was able to find work at another South Korean-owned garment factory, Sewon, S.A., but was fired within a matter of days, on June 8, 2010.  No explanation was given for his sudden firing.

Erick Fernando Acetun Estrada was also illegally fired from Alianza in March for being a member of the ad hoc committee.  He had worked for just a few days at the same factory as Joaquin Lastón Vásquez and was fired on the same day, June 8.

Manuel de Jesus Rompich Lara-also illegally fired in March-worked for just two weeks at a South Korean garment factory called Sam Sol S.A., but was suddenly fired without any explanation.

Maria Eufemia Pichiya Cana-who was illegally fired by Alianza management on February 2, 2010 for union organizing-found employment at another South Korean factory called Beltlan, S.A., but was fired without any reason given after just four days.  After Maria Eufemia was fired, a supervisor at the Beltlan S.A. factory told the workers that she was let go because "she was a problem" and "was involved in organizing with CEADEL and these people are troublemakers."

  • Twenty Alianza workers were fired on January 4, 2010 for having missed one day of work, on January 2, the day after New Years Day.  All those fired worked in the ironing department.  These firings were also illegal, as missing one day's work is not just cause for termination.  (It was only through CEADEL's intervention that the fired workers received their severance pay.)

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Alianza Fashion - Run Like a Minimum Security Prison

Death threats against CEADEL's leaders end, but Alianza management's hatred of CEADEL persists

Serious death threats against CEADEL's leaders began in February 2010 and lasted about three months.

Early February         CEADEL's lawyer, Mr. Walter Felipe Pocop, received a phone call from a man who threatened him, "We're going to kill you."

February 10:             Alianza's general manager, Mr. Enrique Rosales, enters CEADEL's office at night, armed with a pistol, saying he is looking for Mr. Pocop.

March 30:                 CEADEL director, Jose Gabriel Zelada, receives a call on his cell phone.  The male caller tells him, "You are going to die, you son of a bitch."

April:                         Mr. Zelada receives a second death threat.

(See the National Labor Committee's March 10, 2010 report, "Illegal Firings and Death Threats at Alianza Fashion Garment Factory in Guatemala" for more details.)

 

Death Threats End, But Workers Are Told They Will Be Immediately Fired If They Have Any Connection to CEADEL

Alianza's general manager, Mr. Enrique Rosales, tells workers point blank: 

"If you go to CEADEL, you will be kicked out of Alianza."

"If you go to CEADEL, stay there and ask them to feed you.  You better not have any contact with CEADEL, because we are the ones who feed you."

"If we find any more traitors among us, they will be immediately fired without any severance pay."

"You should think twice before going to CEADEL because after you're fired you will come crying to me begging for your reinstatement."

"CEADEL and their friends only want to cheat you.  They don't do anything good for you.  All they want to do is shut the factory down."

"If you try to organize, you will hurt the factory and you will be without work."

Alianza management also uses the factory's loudspeaker system to threaten the workers not to cooperate or go to CEADEL's office.

A group of workers explains, "Supervisors and managers tell us that CEADEL is only out to help themselves.  They warn us not to go to CEADEL because it could be very dangerous for us if we want to keep our jobs.

Alianza workers are also threatened not to go to the Guatemalan Ministry of Labor:  "If you go to the Ministry [of Labor], we will throw you out without a cent."

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Illegal Firings at Alianza Fashion Expose Social Security Fraud

Alianza management, in broad daylight and over the course of years, has systematically robbed the workers of their Social Security payments, leaving the workers, and their children, without health care, and the workers without their pensions-despite the fact they are paying for it.

It is hard to imagine that Alianza Fashion is a unique case or that the Guatemalan Social Security Institute (IGSS) could be so lax that it would miss the fact that a large factory like Alianza, with 1,350 workers, may have been inscribing less than 100 workers into Social Security.  A full and independent investigation is necessary.  While criminally robbing its workers, Alianza management continues to be awarded duty free access to the U.S. market.

The Guatemalan Social Security Institute (IGSS) was founded in 1946 to provide health care and pensions to all Guatemalan workers.  IGSS is the only functioning pension plan in Guatemala, operating on deductions from workers pay and a portion paid by employers.

Workers must pay 4.83 percent of their monthly wages into IGSS. The workers' deduction is based on the minimum wage, the 7th Day attendance bonus, all overtime and production bonuses.  For example, a worker earning the minimum wage of 1552.50 quetzales ($192.51) a month would pay $9.30 into Social Security.  With overtime and other incentives, the workers' mandatory deductions for Social Security would be higher.

Companies must pay an additional 10.67 percent of the workers' monthly wages.  If a worker earns just the minimum wage of $192.51 per month, management must pay $20.54 into the Social Security Institute.  The combined worker deduction and management portion would total $29.84 a month if the worker is earning just the minimum wage.

In return for the worker and management payments to Social Security, the workers-and their young children up to five years old-receive free health care.  Social Security health care covers occupational accidents, maternity care and maternity leave, general illnesses, disability, hospitalization, sick leave, widow support and more.  The Social Security wage deduction also allows workers to retire, after they have reached 60 years of age and have worked a minimum of 15 years, with a pension equivalent to 60 percent of the worker's average wage including overtime and production bonuses.

It appears that Alianza factory management has systematically deducted workers Social Security payments each month and then pocketed the money rather than passing it to the Guatemalan Social Security Institute as required by law.  Moreover, Alianza management has also failed to pay the company's portion of mandatory Social Security fees-and in some cases, this has been going on nine years.  (Alianza Fashion only began operations in 2000.)

The Social Security scandal at Alianza's only came to light after management illegally fired workers attempting to exercise their right to organize a union.  It was CEADEL that advised the fired workers to ask for a certified copy of their personal files at the Guatemalan Social Security Institute.

At first, IGSS staff flat-out refused to provide copies of the workers' files.  It took the fired workers seven weeks and four trips back and forth from Chimaltenango to Guatemala City, but in the end they won--at least partially.  Of the 20 fired workers who sought their Social Security files, just two workers received their records for the full period of their employment at Alianza.  The other 18 received only partial records, from 2007 on.

Still, the documents are incredibly disturbing.  Alianza Fashion management made only partial Social Security payments on behalf of two workers, while management made no Social Security payments whatsoever for the other 18 workers-some of whom had been working with Alianza for the last nine years, since 2001!

In the best case scenario, Alianza management paid just 46 percent of the mandatory Social Security deductions, for Ms. Sara Abigail Atz Calan.  In the second case, management paid just 24 percent of the Social Security deducations legally due for Ms. Vilma Marina Socop Toma.  Vilma began working at Alianza on January 2, 2001 and was illegally fired on March 26, 2010 for attempting to organize a union.

Alianza Workers Robbed of Social Security Health and Pension Benefits

 

 

 

Name of Worker

Period of employment at Alianza

 

Months for which IGSS Provided requested records*

 

# Monthly Payments by Alianza to  IGSS during the period

 

1

Carlos Arturo López Pablo

August 18, 2008 - 26 March, 2010

 

19

 

0

 

2

Cesar Austo Reyes Cutzajay

March 16, 2001 - March 25, 2010

 

35

 

0

 

3

Edy Amilcar Acetun Chonay

July 22, 2002 - 26 Mar - 2010

 

35

 

0

 

4

Elva Sunuc Ruiz

September 30, 2002 - March 26,2010

 

35

 

0

 

5

Edwin Giovany  Xoyon Suy

April 23, 2007 - March 26, 2010

 

23

 

0

 

6

Erik Fernando Acetun Estrada

April 1, 2002 - March 25, 2010

 

35

 

0

 

7

Hector Oswaldo Saquil Choc

March 13, 2006 - March 26, 2010

 

35

 

0

 

8

Hermenejildo Calan Castro

May 7, 2004 - March 26, 2010

 

70

 

0

 

9

Jorge Mario Mendez Valle

April 19, 2001 - March 26, 2010

 

99

 

0

 

10

José Domingo Ramos Figueroa

June 16, 2003 - March 25, 2010

 

35

 

0

 

11

José Haroldo Socoy Crup

May 13, 2002 - March 26, 2010

 

78

 

0

 

12

Joaquin Lastor Velazquez

July 11, 2005 - March 26, 2010

 

23

 

0

 

13

Kelly Evelyn Alonzo Gonzalez

September 6, 2005 - March 26, 2010

 

35

 

0

 

14

Luis Patan Larios

May 28, 2001 - March 26, 2010

 

35

 

0

 

15

Marcos Pata Cipriano

January 28, 2004 - March 26, 2010

 

35

 

0

 

16

Marvin Adolfo Zamora Morales

July, 30, 2003 - March 25, 2010

 

35

 

0

 

17

Pedro Aceytuno Lux

September 20, 2004 - March 26, 2010

 

35

 

0

 

18

Sara Abigail Atz Calan

March 5, 2007 - March 26, 2010

 

35

 

16

 

19

Selvin Amilcar Sitan Nimajuan

April 2, 2001 - March 26, 2010

 

35

 

0

 

20

Vilma Marina Socop Toma

January 2, 2001 - March 26, 2010

 

95

 

23

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The Workers' Demands

  • Alianza management must immediately reinstate the workers illegally fired in March for exercising their legal right to organize.
  • Alianza management must respect and guarantee the workers’ right to organize a union.
  • Every worker must be registered in Social Security and guaranteed the legal right to health care and a pension.  Alianza must make the workers whole again by paying all outstanding Social Security deductions and payments owed.
  • All overtime at Alianza must be voluntary and in compliance with the law.
  • Good faith negotiations must take place between Alianza workers and CEADEL, Alianza factory management, the Ministry of Labor and the Guatemalan Social Security Institute.

    (One serious suggestion to stop factory management from robbing workers of their Social Security payments is to make this a crime punishable by imprisonment.  In El Salvador, such a law has been very effective in ending Social Security violations.)
     
  • The labels must not pull their work from the Alianza factory, which is the worst thing they could do.  The workers need these jobs.  The companies must keep their production in the factory as they work together with management to finally bring Alianza into compliance with Guatemalan labor laws and U.S.-CAFTA labor rights provisions.

  • Despite the systematic and gross violation of worker rights at the Alianza Fashion and other factories across Guatemala, apparel makers were able to export--duty free--$10.5 billion worth of garments to the U.S. since January 2004.  Under CAFTA, it is likely that Guatemala's 155 garment factories have saved nearly $3 billion in tariff breaks.  In return, the workers in Guatemala and the American people received nothing.  This is not the way free trade agreements are supposed to work. 
     
  • The USTR's case against Guatemala has the potential to guarantee that respect for worker rights will become reality under the US-CAFTA free trade agreement.

 

 

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ADDENDA

Documentation of Alianza's Underpayment or Non-Payment
of IGSS Social Security Dues (Translated into English)

--3 Examples--

Of 20 workers fired from the Alianza factory in March 2010 for forming an Ad Hoc worker committee, the records of 18 show no payments at all by the company into Guatemala's pension and healthcare system on the workers behalf.  The two remaining workers were "lucky"-the company made some of the legally required payments for the months they worked.

Each fired worker received:  1.) a letter of dismissal from the company documenting their time of employment 2.) a Guatemalan Social Security Institute report of the payments received (or not received) from Alianza on their behalf.  Below are translated examples of the records received by three workers-the two for whom some payments were made and a third more typical worker for whom no payments were made.   Copies of the original documentation for all 20 workers can be found here.

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  • Vilma Marina Socop Toma

(Worked for Alianza for 9 years.  IGSS records indicate that-during 95 months for which Social Security payment data was made available, only 23 monthly payments made by Alianza on Ms. Socop's behalf.)


[Letter of Dismissal from Alianza]

Chimaltenango, March 26, 2010

Sirs

Labor Inspectorate

In the facilities of the Alianza Fashion SA Company, Km 52.5 InterAmerican Highway to Chimaltenango on the 26th day of March of this year, where the labor relationship is concluded, [with the] FIRING FOR JUST CAUSE of Mrs. VILMA MARINA SOCOP TOMA.  Her [employment] relationship began on January 2, 2001 in the cutting area [and] ends on March 26, 2010.

The employment relationship is concluded.

Sincerely

[Signed]

Ruben E. Rosales                                                         Viviana Lara                                        

Human Resources Manager                                          Secretary of Human Resources

 

Employee agrees

[Translation:  Vilma Marina Socop Toma's IGSS Payment Record]

 

            IGSS                            REPORT OF WAGES EARNED                    CA-29

CORRESPONDANCE & RECORDS DEPARTMENT

                                                                                                                        2/25/2010

                                                                                                TO DATE:       2/182010

PERIOD REQUESTED:  JAN/2002 - DEC/2009

Affiliate #: 2-83-24138 Name: Socop Toma Vilma Marina                                Report 2934

Business #: 79147   Name:  ALIANZA FASHION SOCIEDAD ANONIMA

Relationship: The interested party [the worker herself]                                    Input:  384

Date of Request:  January 1, 2010                                Date of Response: February 17, 2010

 

Year     CMonth           Month              Wage   Code  Description of Code

2002

1

January

0.00

2

Not reported

2002

2

February

0.00

2

Not reported

2002

3

March

0.00

2

Not reported

[Same through October 2004].....

2004

11

November

0.00

5

Pay given but no Rolls [planillas]

2004

12

December

0.00

5

Pay given but no Rolls [planillas]

2005

1

January

0.00

2

Not reported

[Same through June 2006]

2006

7

July

1,309.20

1

Reported

[Same through September 2007

2007

10

October

0.00

5

Pay given but no Rolls

2007

11

November

1,374.66

1

Reported

2007

12

December

1,374.66

1

Reported

2008

1

January

1,432.50

1

Reported

[Same - IGSS payments made through July 2008

2008

8

August

0.00

5

Pay given but no Rolls

[Same-pay was given but no rolls-through December 2008]

2009

1

January

0.00

2

Not reported

[Same through June 2009 - not reported]

2009

7

July

0.00

8

Social Security Rolls in Process

[Same through December 2009-last monthly record detail made available.]

             

 

 

            Wages:             31,571.46                    Payments Made:  23

 

The herein signed Microfilm operator attests and lets it be known that s/he viewed the microfilm archives where s/he verified through the Social Security rolls that the information rendered in this report is true.

 

[Signed]

Rubi Mazin                                                                   [Signed]                                  

Operator                                                                      Reviewed

 

                                                                                                [Signed & stamped]

            Dignitizer: Maby                                                                       Marvin Gutierrez

                                                                                                Supervisor

            [Signed & stamped]

            Signature of Immediate supervisor

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-----------------------------------------------------------------------------------------------------------------

 

  • Sara Abigail Atz Calan

Worked in Alianza for three years, from March 5, 2007 - March 26, 2010.  IGSS records indicate that-during 35 months for which Social Security payment data was made available, only 16 monthly payments made on Ms. Atz Calan's behalf.)

 

[Letter of Dismissal from Alianza]

Chimaltenango, March 26, 2010

Sirs

Labor Inspectorate

In the facilities of the Alianza Fashion SA Company, Km 52.5 InterAmerican Highway to Chimaltenango on the 26th day of March of this year, where the labor relationship is concluded, [with the] FIRING FOR JUST CAUSE of Mrs. SARA ABIGAIL ATZ CALAN.  Her [employment] relationship began on March 5, 2007 as a [sewing] operator in module 02-B [and] ends on March 26, 2010.

The employment relationship is concluded.

Sincerely

[Signed]

Ruben E. Rosales                                                         Viviana Lara                                        

Human Resources Manager                                          Secretary of Human Resources

 

 

Employee agrees

[Translation:  Sara Abigail Atz Calan's IGSS Payment Record]

 

            IGSS                            REPORT OF WAGES EARNED                    CA-29

CORRESPONDANCE & RECORDS DEPARTMENT

                                                                                                                        7/12/2010

                                                                                                TO DATE:       7/92010

PERIOD REQUESTED:  MY/2007 - JN/2010

Affiliate #: 2-80-23518 Name:  ATZ CALAN SARA ABIGAIL                      Report 12920

Business #: 79147   Name:  ALIANZA FASHION SOCIEDAD ANONIMA

Relationship: The interested party [the worker herself]                                    Input:  16680

Date of Request:  July 9, 2010                          Date of Response: July 9, 2010

 

Year     CMonth           Month              Wage   Code  Description of Code

2008

1

January

1,432.50

1

REPORTED

2008

2

February

1,432.50

1

REPORTED

2008

3

March

1,432.50

1

REPORTED

2008

4

April

1,432.50

1

REPORTED

2008

5

May

1,432.50

1

REPORTED

2008

6

June

1,432.50

1

REPORTED

2008

7

July

1,432.50

1

REPORTED

2009

1

January

1,432.50

1

REPORTED

2009

2

February

1,432.50

1

REPORTED

2009

3

March

1,432.50

1

REPORTED

2009

4

April

1,432.50

1

REPORTED

2009

5

May

1,432.50

1

REPORTED

2009

6

June

1,432.50

1

REPORTED

2009

7

July

1,432.50

1

REPORTED

2009

8

August

1,432.50

1

REPORTED

2009

9

September

1,432.50

1

REPORTED

 

            Wages:             22.920.00                    Payments Made:  16

 

OBSERVATIONS:

1.-MAY TO SEPTEMBER, NOVEMBER, DECEMBER/07 IS NOT REPORTED.

2.-AUGUST TO DECEMBER/08, JANUARY TO JUNE/10 NO REGISTERED PAY

3.-OCTOBER/07, OCTOBER TO DECEMBER/09 PAYMENT WAS MADE, ROLLS HAVE NOT BEEN ENTERED TO THIS AGENCY

 

The herein signed Microfilm operator attests and lets it be known that s/he viewed the microfilm archives where s/he verified through the Social Security rolls that the information rendered in this report is true.

 

[Signed]

Rubi Mazin                                                                   [Signed]                                  

Operator                                                                      Reviewed

 

                                                                                                [Signed & stamped]

            Dignitizer: Lucrecia                                                       Marvin Gutierrez

                                                                                                Supervisor

            [Signed & stamped]

            Signature of Immediate supervisor

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-----------------------------------------------------------------------------------------------------------------

 

  • Luis Patan Larios

Worked in Alianza for nearly nine years (105 months), from May 28, 2001 to March 26, 2010.  For the 35 months for which Social Security payment data was made available to him, IGSS records indicate that 0 payments made by Alianza to IGSS on his behalf.)

 

[Letter of Dismissal from Alianza]

 

Chimaltenango, March 26, 2010

Sirs

Labor Inspectorate

In the facilities of the Alianza Fashion SA Company, Km 52.5 InterAmerican Highway to Chimaltenango on the 26th day of March of this year, where the labor relationship is concluded, [with the] FIRING FOR JUST CAUSE of Mr. JORGE MARIO MENDEZ VALLE.  His [employment] relationship began on April 19, 2001 as a [sewing] operator in module 01-B [and] ends on March 26, 2010.

The employment relationship is concluded.

Sincerely

[Signed]

Ruben E. Rosales                                                         Viviana Lara                                        

Human Resources Manager                                          Secretary of Human Resources

 

Employee agrees

 

 

                                                                                                            LABOR MINISTRY

                                                                                                            STAMP & DATE
[Translation:  Jorge Mario Mendez Valle's IGSS Payment Record]

 

            IGSS                            REPORT OF WAGES EARNED                    CA-29

CORRESPONDANCE & RECORDS DEPARTMENT

                                                                                                                        7/12/2010

                                                                                                TO DATE:       4/2010

PERIOD REQUESTED:  SP/2001 - JN/2010

Affiliate #: 1-81-32194  Name:  MENDEZ VALLE JORGE MARIO   Report 12941

Business #: 79147   Name:  ALIANZA FASHION SOCIEDAD ANONIMA

Relationship: The interested party [the worker himself]                                    Input:  16688

Date of Request:  July 9, 2010                          Date of Response: July 9, 2010

 

Year     CMonth           Month              Wage   Code  Description of Code

 

 

 

 

 

 

 

            Wages:                                                 Payments Made:  0

 

OBSERVATIONS:

1.-SEPTEMBER/01 TO JULY, SEPTEMBER, OCTOBER/04, JANUARY/05 TO SEPTEMBER, NOVEMBER/06 TO SEPTEMBER, NOVEMBER/07 TO JULY/08, JANUARY TO SEPTEMBER/09 IS NOT REPORTED.

2.-AUGUST, NOVEMBER, DECEMBER/04, OCTOBER/06, OCTOBER/07, OCTOBER TO DECEMBER/09 PAY WAS GIVEN BUT NO [SS] ROLLS HAVE BEEN ENTERED WITH THIS AGENCY.

3.-AUGUST TO DECEMBER/08, JANUARY TO JUNE/09 THERE IS NO PAY REGISTERED.

The herein signed Microfilm operator attests and lets it be known that s/he viewed the microfilm archives where s/he verified through the Social Security rolls that the information rendered in this report is true.

[Signed]

Angel Perez                                                                  [Signed]                                  

Operator                                                                      Reviewed

 

                                                                                                [Signed & stamped]

            Dignitizer: Lucrecia                                                       Marvin Gutierrez

                                                                                                Supervisor

            [Signed & stamped]

            Signature of Immediate supervisor

 

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Documentation of Alianza's Underpayment or Non-Payment
of IGSS Social Security Dues (Original Documents)

The IGSS records of the 20 fired workers can be found here.

1. Carlos Arturo Lopez Pablo
11. Jose Haroldo Socoy Crup
2. Cesar Austo Reyes Cutzajay 12. Joaquin Lastor Velazquez
3. Edy Amilcar Acetun Chonay 13. Kelly Evelyn Alonzo Gonzalez
4. Elva Sunuc Ruiz 14. Luis Patan Larios
5. Edwin Giovany Xoyon Suy 15. Marcos Pata Cipriano
6. Erik Fernando Acetun Estrada 16. Marvin Adolfo Zamora Morales
7. Hector Oswaldo Saquil Choc 17. Pedro Aceytuno Lux
8. Hermenejildo Calan Castro
18. Sara Abigal Atz Calan
9. Jorge Mario Mendez Valle

19. Selvin Amilcar Sitan Nimajuan

10. Jose Domingo Ramos Figueroa

20. Vilma Marina Socop Toma

 

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Alianza's U.S. Buyers

Macy's, Inc.

7 West Seventh Street, Cincinnati, OH 45202
Phone: 513-579-7000; Fax: 513-579-7555
Website: http://www.macysinc.com

Stores: 810 Macy’s and 40 Bloomingdale’s in the U.S.
Operating Income: $1.063 billion (2009)
CEO: Terry J. Lundgren (Average Compensation: $7.29 million)


Sears Holdings Corporation

3333 Beverly Road , Hoffman Estates, IL 60179
Phone: 847-286-2500; Fax: 847-645-4003
Website: www.searsholdings.com

Stores: 3900 in the U.S. and Canada
Annual Revenue: $46.770 billion (2009)
CEO: W. Bruce Johnson (Total Compensation: $1.49 million)

 

Kohl’s Corporation

Kohl's Department Stores, N56 W17000 Ridgewood Drive, Menomonee Falls, WI 53051
Phone: 262-703-7000; Fax: 262-703-6353
Website: www.kohlscorporation.com

Stores: 1067 in the U.S.
Annual Net Sales: $17.178 billion (2009)
CEO: Kevin Mansell (Annual Compensation: $4.46 million)

 

Charming Shoppes, Inc. (Owner of Fashion Bug)

450 Winks Lane, Bensalem, PA 19020
Phone: 215-245-9100;
Fax: 215-633-4640
Website: www.charmingshoppes.com

Stores: 2100 stores in the U.S.
Annual Revenue: $2.474 billion (2009)
CEO: James P. Fogarty (Annual Compensation: $5.21 million)

 

Kellwood Company (Owner of Sag Harbor and Briggs New York)

600 Kellwood Pkwy., Chesterfield, MO 63017
Phone: 314-576-3100; Fax: 314-576-3460
Website:
www.kellwood.com

Where to buy: Dillard’s, Macy’s, Kohl’s, Sears, Boscov’s, Barneys, Bergdorf Goodman, Nordstrom, Neiman Marcus, Lord & Taylor, Bon-Ton, Saks Fifth Avenue, Bloomingdales
Annual Revenue: Approximately $2 billion
CEO: Michael W. Kramer

 

Belk Inc. (Owner of Kim Rogers)

2801 West Tyvola Road
Charlotte, NC 28217-4500
Phone: 704-357-1000
Websi
te: www.belk.com

Store:  306 stores in 16 states in the U.S., primarily in the southern U.S.
Revenues of FY2010 (ended Jan. 30 2010): $3.35 billion
CEO: Thomas M. Belk, Jr.

 

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