Can Corporate Codes of Conduct Promote Labor Standards?
Evidence from the Thai Footwear and Apparel Industries

The apparel industry has seen increased subcontracting to sweatshop, reduction of employment of regular workers, and moves to crush union organizing. The experience of workers at Par Garment Apparel Manufacturer illustrates this trend. Par Garment Co. Ltd is a medium size manufacturer, based in Phatumthani. It produces shirts and sportswear for nearly 20 transnational companies, including Nike, Adidas, the Gap, Old Navy, Champion, Karet Francisca, Chicago, Brittania, London Fog, Fila, and Gymboree. Mr. Apiwat Rattanamangkla, the nephew of textile magnate Mr. Sukree, established the company in 1987, with capital of 14 million baht, and employed over 800 workers. [1] Par Garment's property alone is valued at over 288 million baht (US$ 8.2 million). [2]

Over the last ten years, the company has expanded its business to another three subsidiaries, the Par M Co. Ltd. in 1991, the Par Consortium Co. Ltd. in 1992, and the Monthinee Co. Ltd. in 1992. However, the growing prosperity of the business is not reflected in the welfare and security of the employees. A large number of workers have been laid-off since 1995 from Par Garment manufacturers as the company is subcontracting orders to small sweatshops. The number of regular workers has declined as business has grown. In 1995, there were 500 regular workers, but as of October 1998, when an additional batch of 70 workers were laid-off, there were only 200 workers remaining at Par Garment Co. Ltd. As an APWSL document makes clear:

The Par Garment owner has long and much exploited its workers by giving underpayment, denying… pay[ment of] overtime wages, [requiring] forced overtime [work], providing none of the working welfare necessary under laws. Employees were made to work in shifts, which each lasted for straight 12 hours with strict permission time to use the toilet. Women workers were also sexually harassed and violated. [3]

In 1990, the employees united to form a workers union, lead by Sripai Nontri. The management opposed the formation of the union. [4] Nearly all of the workers went on a 9-day strike to mobilize workers to form a union and press the management to recognize it. The 9 days strike concluded with the successful formation of a trade union on 11 June 1990. While ten years has passed, workers still receive only the minimum wage and work under very poor conditions.

In 1995, the four main Par Garment union committee, Sripai Nontri, the chairwoman of the union, Nora Putuchon, Saneh Hongtong, and Vacharee Sangsuk, were fired. Each of these four workers filed lawsuits against the employer and won their cases in the Labor court. Sripai and Saneh lost subsequent cases in the court, while Nora and Vacharee settled their case with a 60,000 baht (US$ 1,714) settlements out of the court.

On 27 October 1997, the negotiation day between the union representatives and management, the management handed the union representatives a letter announcing the closure of manufacturing, commencing on 29 October 1997. The management claimed that the factory needed to be closed because an agreement could not be reached with the union.

"The management thought that the workers would not be able to continue the strike for so long and would give up in the end," but the management was wrong. [5] Four hundred and forty nine of the 500 remaining workers of the Par Garment workers called a sit-in protest in front of the factory. A few months passed, but the employers would not come to meet with the union committee at the negotiation table. In March 1998, in the fifth month of their protest, the union committee met with the Prime Minister to seek his help. The Prime Minister ordered the Minister of Labor and Social Welfare to help urgently settle the case. Then on 13 March 1998, the employer attended a meeting with the union for the first time and the case was settled; the manufacturer agreed to re-open operations on 22 April 1998, and not to take any action against the demonstration workers. During the six month protest, workers received much support from both local labor unions and international labor institutions. Asia Pacific Workers' Solidarity Links assisted in a letter writing campaign to the Thai Prime Minister and publicized the problem throughout its network. However, when the manufacture re-opened on 22 April 1998, only 318 workers returned to work.

Although the agreement was written in the labor office and an officer of the Ministry had signed as a witness, only one month after the operation of the manufacture, on 25 May 1998, the personal manager posted two announcements. The first announced the dismissal of the 24 workers who had organized the demonstration and disrupted production. The workers, accused of inciting other workers to strike, were dismissed without any compensation. The second notice announced that the manufacturer had filed a law suit in the labor court asking for the dismissal of the six union committee members. The manufacturer agreed to pay wages to the six, on the condition that they did not come to the factory premises until the day of their dismissal. After the announcement from the management, the Par Garment Workers Union Committee sent a letter to the director of the Department for the Workers' Welfare and the Protection of Worker, the Ministry of Labor and Social Welfare requesting help.

With the help of Mr. Chat Jittipong, a lawyer from the Union for Civil Liberty, a legal aid non-governmental organization, these 24 workers and the six union committee members filed a counter suit against the employer, demanding compensation and the return of their guarantee deposit money and unpaid bonuses. The total claim was approximately 53,000 baht (US$ 1,514 dollar) per worker. In the first trial of the 24 workers on 17 December 1998, the judge tried to persuade the workers to settle the case out of court and accept 50% of their claim. The workers rejected the judge's advice, and the cases are still pending.

Since the manufacturer produces for many transnational corporations which have codes of conduct, in particular The Gap and Nike, the manufacturer should respect workers' right to form a union. Instead, workers have not been apprised of the codes of the transnational corporations. The workers have never been interviewed or questioned by any of the transnational corporations representatives, about their working conditions. Indeed, it is very difficult for the workers to talk to the transnational corporations representatives. The manufacturer informs workers the day before the arrival of the transnational corporation representatives that

[t]he workers should not look in the eye or speak with the customers because this is an important customer, and we are to receive a big order. The management also clean up the factory and had told the workers not to leave anything on the ground the day of the visit, though it is not a practice in the daily situation.[6]

Apparel products are increasingly produced under the subcontract system, employing workers in Bangkok sweatshops and in rural areas, especially from Isan, the poorest region of Thailand. According to Asia Pacific Workers' Solidarity Links, over 20 sweatshops in the Bangkok area have been contracted to produce for Par Garment. [7]

Many of the laid-off workers have to turn to sub-contracting of these products, although they know that they will be exploited and the wage they receive from subcontract is lower than what they received when working for the manufacturer. The sub-contract system payment is made on the amount of pieces produced. As the price is set at a very low rate, the workers receive less than the minimum wage. They have to work longer hours, and without labor laws for protection. They live each day of their lives in uncertainty.

Many manufacturers are attempting to work a loophole in labor law number 75 to close their manufacturing and pay only 50% of their wages. The law was passed in 1997 in response to the economic crisis, which began in 1997. Labor law number 75 states that

[i]n the event that any employer has to stop its operation, either permanently or temporary, [for] an [un]expected reason, the employer is allowed to pay the employee not less than 50 % of their wage and at the rate the employee received before the date of notice of closure and for the whole period that the employee is not working.… The employer must inform the employees and the labor officer before the day of closure. [8]

Many manufacturers have been abusing this gap in the law by announcing the temporary closing of the manufacture when orders are low and paying only 50% of the wages to their workers. The Par Garment Manufacture have also been abusing this law. The management made an announcement on 13 September 1998 that they were going to stop operation from 26 until 29 September and then again from every Saturday until Tuesday during October and November [26 days in total]. Since the normal working wage is already low, it has been very hard for the workers to survive.

"The workers are feeling so desperate, especially the workers with children. Their lifes are so suffering. Many women workers who have been laid-off also are facing the situation that the husband had left them to handle the children and all the household's bills alone…. Due to the economic suppression, they are facing many kinds of family violence." - Par Garment union worker [9]

The Par Garment workers receive only the minimum wage of 162 baht per day. Workers face a very serious situation if they receive only 50% of that minimum wage. Statement by Par Garment Workers helps to illustrate their plight.

Now my elder brother has to bring rice from our field and some money to give to me because I haven't been working since May 1998. I can not even afford 200 baht for a bus to go home for this coming new year holiday. I was very strong before I came to work in this industry, and could handle hard work in the field. Since I have been working for Par Garment for almost ten years, I can no longer work in the field. Not because I do not try to working in the field. I have tried, but I have no energy left for this hard work any more. My health is getting much weaker now.

We have been eating very poor food now…only eating salted fish and som-tum [papaya salad]. Since the pre-cooked food is so expensive for us - a plate of rice and curry costs 25 baht - we have to share the price of the food with friends and cook at home. But sharing with friends still costs us about 12 baht for each person….For these 12 years of working in the Par Garment, I remember there was only one time when I allow myself to see a movie in the cinema and paid 90 baht for the ticket. Though it was only 90 baht, after the movie I was regretted going because that 90 baht could enable me to buy food for 3 days.

Before 1997, we called for the strike because we were forced to work overtime with no opportunity to take a holiday, we wanted to go home for the holiday. But now we have so many holidays, and we have no money to go home. There is nothing in balance…I have no question why people commit suicide. [10]

The employers have been applying many strategies to divide and weaken the unions. Many of the union committee members have been sued by the employers. They are also prevented from going into the factory and from working.

Footnotes:

1. Pasuk Phongpaichit and Chris Baker, Thailand's Boom!, Chiang Mai: Silkworm Books, 1996, 18.
   
2. The Par Garment financial report to the Pathumthani Chamber of Commerce, 25 April 1998. This does not include the property of Par Garment's four subsidiaries.
   
3. Asia Pacific Workers Solidarity Links, Bangkok, "The Closure of "Par Garment," mimeograph, (24 December 1997).
   
4. The Par Garment workers union members, who are mostly women, were one of the leading union in the Rungsit Industrial Area. The union has joined the Young Christian Workers activities and share its offices. Sripar Nonsri and Saneh Hongtong are now working for the Young Christian Workers - Thailand.
   
5. Par Garment Workers' Union Committee member, interview, 24 December 1998.
   
6. Committee member of Par Garment workers' union, interview, 11 December 1998.
   
7. Asia Pacific Workers' Solidarity Links, "The Closure of Par Garment Company," mimeograph, (December 1997), 3.
   
8. Ministry of Labor and Social Welfare, Government Gazette, 1997.
   
9. Committee member of Par Garment workers' union, interview, 11 December 1998
10. All quotes from the interview of a Committee member of Par Garment workers' union, 11 December 1998

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