BUSINESSWEEK ONLINE : OCTOBER 2, 2000 ISSUE
SOCIAL ISSUES

What Are the Auditors Missing?


Wal-Mart and other U.S. companies use outside auditing firms to inspect factories abroad. Critics claim company-sponsored audits often miss labor abuses. Here are three factories in China where problems were found following a report by the National Labor Committee:

CHUN SI HANDBAG FACTORY, ZHONGSHAN
Kathie Lee handbags for Wal-Mart

-- Guards beat workers, according to employees' complaints.

-- Workers had to pay illegal up-front deposits to cover first month's food, and lodging in factory dorm.

-- Many workers still owed the factory money after several months, due to penalties and charges.


LIZHAN FOOTWEAR FACTORY, DONGGUAN
New Balance shoes

-- Payroll violations, such as fining workers late for work, says Social Accountability International.

-- Half-dozen safety violations, such as not employing a plant safety official, as required by Chinese law.

-- Several wage violations, such as not paying double-time for Saturday work, as required by Chinese law.


POU YUEN FACTORY V, ZHONGSHAN
Timberland shoes

-- After more than a year, the factory had not stopped many serious violations auditors had found in 1998, says Timberland. These include not paying overtime for 14- to 16-hour days and forcing workers to use toxic glues and solvents without gloves. Timberland is now working with the factory to address the problems.

DATA: BUSINESS WEEK


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