Nickel-and-Dimed in Sweatshops: Australian Brands Squeeze Vietnamese Garment Workers

Phan Anh

11:21 19/03/2019

Vietnamese workers making garments for Australian brands are unable to afford basic necessities and suffer sub-standard working conditions, said Oxfam.

Nickel-and-Dimed in Sweatshops: Australian Brands Squeeze Vietnamese Garment Workers

Workers in a garment factory in Hanoi, Vietnam. Photo by Shutterstock/Jimmy Tran

Two ten-minute breaks. 

One in the morning, another in the afternoon.

Nhan says she and most of her colleagues opt not to take these two breaks that their factory allows, because it is "meaningless." 

Instead, they try to make more money, because their earnings depend on a piece rate. 

"Every worker is keen on doing this, because they can get some more money rather than 10 minutes break, which seems to be meaningless," she says. 

Nhan is a factory worker who makes garments for leading Australian brands like Big W and Kmart.

An Oxfam Australia report says long working hours in Vietnamese factories like the one Nhan works in take a toll on the workers’ health, especially new mothers, who report pain and having no space to express milk. 

One Vietnamese mother says she has to run home at lunch time to feed her baby, then work extra hours at night to make up for the wage loss. Another reports that working overtime takes a toll on her physically and mentally because she has to stay late at work even though she needs to go home to feed her child.

"I feel tired, but I still have to stay, go home late; no one listens to us. I have to feed my baby." 

Hau, a 27-year-old garment worker, spends more on food for her children than herself. She spends very little on her own food in order to help pay off the family’s debt. Even then, when she brings food into the factory to feed herself during the day, her allowance is cut. She does it anyway, because she would go hungry otherwise.

Damning indictment

These poignant anecdotes are related in the Oxfam Australia report which is a damning indictment of leading Australian brands like Target and Cotton On that pay scant attention of the plight of workers in factories even as they rake in millions of dollars in profit each year.

The report exposes the ways in which Australian companies drive wages down and impose harsh working conditions, despite "clear commitments on important fundamental rights at work in their Codes of Conduct."

The companies pressurize factories in many ways including fierce price negotiations, jumping between contracts instead of establishing long-term relationships, squeezing lead times for orders.

They operate "with a separation between their ethical and standards staff and their buying teams, who negotiate directly with factories," the report says. 

It notes: "One factory owner even reported the extensive measures a company had taken to keep their clothing safe in case of a fire, but a lack of interest from the very same company in fire safety measures for the workspaces where people sew their clothes."

‘Made in poverty’

Titled "Made in Poverty," the report is based on interviews held last April and July with 474 workers in Bangladesh and Vietnam. It seeks to examine the impact of low wages on the wellbeing of workers and their families working in the factories that supply garments to major brands in Australia.

The two countries were chosen as they were key sourcing countries for Australian clothing brands, making up almost 10 percent of the clothing imported by Down Under in 2017, and their share of the market has been growing in recent years.

Among the interviewed workers, 88 were Vietnamese, of which 13 were male and 75 were female. They were from six Vietnamese factories with a total labor force of 5,882 people and were identified as suppliers for Australian clothing brands. All workers were interviewed at locations away from the factories and none were identified by their real names to protect their employments and wellbeing.

The national average minimum wage in Vietnam is around $197 per month, which is 64 and 37 percent of the living wage compared against the Global Living Wage Coalition and the Asia Floor Wage, respectively. 74 and 99 percent of Vietnamese garment workers earn below the living wage compared against the Global Living Wage Coalition and the Asia Floor Wage, respectively, according to the report.

With such low wages, 70 percent of the workers reported that their income was not sufficient to meet their needs, 28 percent feel their wages were not sufficient to sustain their families for the whole month, while 37 percent said they had to borrow from friends, relatives or neighbors to fill in the income expenditure gap, the report added.

Moreover, 27 percent said they experienced no change to their wages, with 5 percent reporting that their wages had been reduced in the past year.

As a result, many garment workers could not afford some of the most basic necessities for their daily lives, including sufficient food, proper housing, clean water or affordable medical treatment.

23 percent reported living in semi-permanent or temporary housing, 20 percent could not afford enough food for themselves and their families, 44 percent constantly worry about having to use well or rainwater due to uncertainty about the water’s safety, and 53 percent were unable to afford medical treatment when sick or injured, the report states.

An abusive working environment also adds to their misery, with 23 percent reporting regular verbal abuse, including shouting, yelling, cursing and using rude words as aggressive tactics to speed up workflows and meet deadlines.

"Yelling is a common practice in the company. The management slap on the table, on the chair, use bad words... It happens every hour, every day, every minute," the report quotes one Vietnamese worker as saying.

Dirty tricks

The report also details wage tactics and other tricks used in Vietnam.

Almost all companies use fingerprint attendance checks. 

"Some workers told us that when they scan their fingerprints, sometimes it does not appear in the system. Even though they work a full day and get it confirmed by their supervisors, only half a working day is counted." 

By law, employers need to pay a social insurance premium based on each worker’s wage and allowances. However, the report notes that in reality, "when unions and workers representatives look at pay slips from workers, it’s clear that many workers only have their social insurance premiums paid based on the minimum wage and seniority allowance, ignoring all other allowances and supplements. This is a common trick to keep the social insurance premium low, denying workers this important safety net."

Despite such appalling working conditions, most workers decide to keep their heads down and carry on, constrained by their personal circumstances and choices. One in every four workers interviewed said they constantly feared losing their jobs.

The long hours of work for many garment workers in Vietnam also causes nutrition problems, as workers struggle to make as many pieces as possible to meet their targets and increase their pay, the report says.

Among workers in one factory in Vietnam, it was reported that there is a concept of "selling annual leave." This meant that when a team failed to complete their weekly or monthly production target, the team leader would ask the workers to work overtime and "sell" workers’ annual leave to the company, meaning that workers are "voluntarily" not taking their owed leave.

All of this adds up to a workforce that is overworked, tired, malnourished, stressed, sick, unable to afford treatment and afraid to take time off for fear of losing their already poor salaries, the report concludes.

Vietnam is an emerging giant in the global textile and apparel industry. There are around 6,000 textile and garment manufacturing firms operating in Vietnam, in which 84 percent are privately owned, 15 percent funded by Foreign Direct Investment (FDI), and 1 percent are state-owned. The industry employs around 2.5 million people, according to the report.

The report says that brands should implement, monitor and make credible commitment to living wages in their supply chains and be transparent and fair when dealing with human rights abuses, while governments should develop, legislate and implement plans to protect laborers.

It will not take much for Australian brands to do their bit.

A 2017 Oxfam showed that the cost of the average piece of clothing sold in Australia would increase by just 1 percent to ensure that workers in Australian garment supply chains earned a living wage.

Instead, the new investigation shows the poverty and reality of working conditions for those who help make clothes bound for Australia, and "the ways in which Australian brands both profit from this poverty and actively operate in ways that keep wages low."

Brands respond

"The well-being of those making our products are (sic) at the heart of our sustainability strategy. As a large, family owned company, we are value driven in the way we do business, and sustainability is a core part of all our business operations," said clothing firm H&M.

"We’re working to promote the well-being of workers within our supply chain," said Big W, adding that it was doing so partly through its Responsible Sourcing Standards, which define expectations for the treatment and safety of workers.

"Big W takes any claims of non-compliance with our standards very seriously and works with our suppliers to ensure issues are addressed appropriately," it added.

Theo VnExpress