Please find below the report on Kuk Dong by the independent monitor that Nike agreed to at the advice of the International Labor Rights Fund. Arturo Alcalde is well respected among independent unions and non-profits in Mexico. This document is public, thanks to the ILRF. USAS had made the public issuance of this report a demand of Nike. http://www.usleap.org - This report posted on Academics Studying Nike web site on February 22, 2001 http://business.nmsu.edu/~dboje/nike.html
January
30, 2001, Report by LIC. ARTURO ALCALDE JUSTINIANI.
OBJECTIVE OF THE REPORT- To do a thorough
evaluation of the conflict using the methods of observation, direct
interviews, and analysis of the labor law and practices. It will
describe the most important elements of the conflict; it will identify
its causes and will present possible solutions.
METHOD- We met personally on the 15th of
January with the representatives of KUKDONG INTERNATIONAL in
their residence at “Retorno Continentes No. 38,
Rancho “los Soles”, Atlixco, Puebla.
There were different meetings with various management staff of the
company. The representatives of the company we met with included
Y.H. Kim, Managing Director of Kukdong Corporation, Park Hoon,
Representative, Hugo de la Peña Riveros, Human Resource Manager, and
Fernando A. Treviño, legal representative from the “Rivareneyra and
Treviño” firm. We had a lengthy meeting with these
representatives, in which they identified the origin of the conflict
and its current status.
Subsequently, we proceeded to interview different
workers as well as people who supported them, including those who had
functioned as representatives of the workers. We were able to
obtained confidential information from the labor authorities and local
observance of the conflict.
We analyzed the different documents such as, the
collective agreement between Kukdong and “Sindicato de Trabajadores
de Odicios Varios en General de la Industria y el Campo “Gral.
Manuel Avila Camacho” from the state of Puebla. FROC-CROC was
represented by Jaime Sánchez Juárez (General Secretary) and
Constantino Sánchez Juárez (General Advisor). We also analyzed
the salaries records and other documents, among them the document
titled “paraprocesal” 1/2001, in which appeared the names of RAUL
HERNÁNDEZ ARGÜELLES and a worker name GERARDO XOCHICALE GARCIA who
presented themselves as representatives of a group of workers.
We also sent the lawyer, Eugenio Narcia Tovar, of
our office to informally observe the way in which the workers who were
returning to the factory were treated and to see the behavior of the
factory representatives who met the workers at the door of the
factory. We also made contact with the representatives from the
“Unión Nacional de Trabajadores (UNT).
We had a lengthy meeting on the 25th of January
with the following representatives:
Mr. S.K. Byun, President of Kukdong Corporation
Mr. Jorge Jiménez Alonzo, government
representative from the State of Puebla
Mr. Jaime Sánchez Juárez, General Secretary of
the union
Mr. Constantino Sánchez Juárez, General Advisor
of the union
Tara Holeman, Manager of the Human Rights Program
of Reebok International,
BACKGROUND OF THE CONFLICT- The factory
started with a plant of 890 employees, 60 “confidential employees,”
and 23 managers of Korean nationality. It has been in operation for a
year and 2 months. It produces sports clothing specially but not
exclusively for “NIKE”. The plant is in a location of 6.5
hectares, and it is constantly growing. The company signed
The contract abides by the minimal requirements
of the law without any additions. Its text corresponds to a
format and has a fundamental deficiency that invalidates it, in that
it lacks a salary tabulator in violation of article 393 of the Federal
Labor Law. In the chapter about tabulating salaries, it states
that it will enforce the most minimum salaries valid in the local
region. This is an uncommon deficiency, but it explains the absence of
negotiations during the signing of this document.
Essentially, the role of this contract is more
for the protection of the business to impede the entrance of another
union, instead of the betterment of the workers.
The conflict originates from a series of
accumulated complaints that were linked to the food service. It
became a serious concern in the last days of the past year, before the
holidays. Five workers that have exercised the leadership
position based on their coordination of the line of work as
supervisors, but also members of the union and workers in the factory,
were dismissed on January 3, 2001. These 5 workers are: SANTIAGO
PEREZ, JOSEFINA HERNÁNDEZ PONCE, MARIO NICANOR ZETINA, MARCELA MUÑOS
AND EDUARDO “N.” This dismissal was a result of the workers’
refusal to eat the factory food on December 15, 2000. The
workers came to work on January 2 and were dismissed on January 3,
2001. Of these five workers only one signed a letter of
resignation and received severance payment, while the others were
verbally dismissed without being informed in writing the reasons for
their dismissal as the law requires (stated at the end of article 47
of the Federal Labor Law).
As a result of the dismissal of the five workers,
all the workers conducted a work stoppage and made a list of demands,
which included the reinstatement of the dismissed workers, a change of
union, and better working conditions including salary and food
service.
On Tuesday the 9th of January 2001 the
negotiations were broken off, and as a consequence the workers began a
series of protests that resulted in an evacuation by the police, which
resulted in violence. Some workers were hurt and sent to the
nearest hospital. We were unable to confirm the damaged received
by those who were hospitalized.
The company pressed criminal charges for damage
caused to the factory and for illegal deprivation of freedom of
movement on the morning of the 9th of
January 2001. The negotiations broke off at
4pm on that same day.
After the police evacuation took place, a series
of mobilization protests were generated. At the same time, the
legal representatives of the company, with the support of local labor
officials, proceeded to encourage workers to agree to a voluntary
dismissal, in return for which they would receive salary, which
include payments for benefits they are entitled to. The total
amount that workers would receive is approximately $1,500.00 pesos
(about $150 in US dollars), which does not provide the same level of
compensation that a worker would receive if dismissed since this is
considered a voluntary dismissal.
CENTRAL POINTS OF THE CONFLICT-
Our observation is that the conflict
originates from various elements. The first one has to do with the low
salaries in contrast with the labor market. In addition, their low
salaries are inadequate to provide the workers’ basic needs.
It is sufficient to look at the text of the collective agreement,
which confirms that it tries to maintain the minimal salary required
by the law without any additional benefits. The contract states
that the minimum salary should only be $38 pesos a day (approximately
$3.80 US dollars). The salary structure of the plant consists of
400 employees who work as general helpers and receive the minimum
salary, 400 who work as “operators” and earn $43 pesos a day
(equivalent to $4.30 US dollars), 50 who work as supervisors and
earn $53 pesos a day (about $5.30 US dollars), and an additional
20 who are head managers and earn $53 pesos a day (about
$5.3 US dollars). The salary structure already creates an
unsettled environment and even more so with the fact that the union
from the very beginning operates with a very minimal democratic
process as if it is running a personal business. One of the most
important services is that of the cafeteria with prices that generate
important benefits. All indicated that the food in the cafeteria
is not to the satisfaction of the employees and this discontent has
generated other discontents, such as periodical promotions that were
promised, and a nursery, which appears in the propaganda distributed
by the company in order to get employees through their recruitment
campaign. The most obvious difficulty in this situation is that
of an inability to count on a legitimate union; therefore, it creates
a bad situation and it can stir extreme and spontaneous actions.
We receive different versions regarding the
origin of the conflict and that the workers' actions were provoked by
external agents, such as workers from other factories, citizens,
foreign organizations including political parties. Undoubtedly in a
factory this large, the most important of the Atlixco zone, there
exist various external forces which can act on the Korean personnel in
this situation.
Regarding the hours of work, they are from
8am to 6pm from Monday to
Regarding the age of the workers, according to
the documents that we reviewed, currently there does not seem to be
any employees under the age of 16. This is a controversial issue
because some workers point out that at some point there were underage
workers, although we did not find any evidence.
Regarding the treatment of workers by the Korean
employees, some of the workers I had the opportunity to talk with
during my second visit to the factory informed me that there is a
harsh treatment towards the local workers by the Koreans. The
treatment is so severe that it has caused some serious incidents, for
which some of the Koreans had to be sent back to Korea. We were
unable to find proof about these assertions.
RECOMMENDATIONS-
We divided our recommendations in three priority
aspects, in seeking to reconcile the preservation of jobs and the
contracts of maquila with respect to the rights of the workers in a
long-term strategy.
1. A RETURN TO THE JOB WITHOUT ANY
DISCRIMINATION.
Based on the characteristics of the conflict, we
consider it fundamental that all the workers, without any exception,
be rehired in order to bring about the possibility of correcting the
practices and conditions in the workplace which caused the current
situation. There should not be any use of discrimination in the
process of rehiring, neither through salary, conditions of work or
seniority, etc. Also, the rehired workers should include the
five workers who were originally fired, taking into account the
agreement that the company made on the 13th of January 2001 before the
Local
Conciliation and Arbitration Board of the State
of Puebla, in which the company committed to the rehiring, in order to
bring a climate of stability and respect to the conditions in the
workplace. It is important to set such conditions taking into
account that there are legal cases pending, which has spread fear
among the workers. It is fundamental that these legal charges be
dropped and that the authorities make a commitment that they will not
take any action or regulations that will make it difficult for
employees in the workplace. It has come to our attention that
arrest orders have been made against 4 or 5 people to teach the
employees a lesson. It should be recognized that the CROC union
will try in some way, direct or indirect, to generate an environment
of fear against those workers who wanted to remove them. In
order for any recommendation to be implemented, it is important that
the company comply efficiently with its commitments, including having
a legal representative that has the ability and is committed to the
intention of finding a solution. This person should not succumb
to local influences such as the obvious links that exist between the
CROC union and some local labor authorities and government
representatives who for many years have worked under common
practices. The experience in the last few days was that some
workers were admitted back to the company and others were rejected
based on a list that the representatives of the company and CROC had
with them at the doorway entrance to the factory. This action
clearly demonstrates that in order to have an efficient
recommendation, it is necessary the CROC union not be allowed to
intervene in the distribution of job assignments or hiring and
dismissals. Otherwise it would not be possible to carry out the
recommendations and it will be unclear who is the responsible for not
fulfilling the commitments. I get the impression that the
company is committed to reinstate the workers; however, their lack of
firmness toward the representatives of the CROC impedes the
fulfillment of their commitments. I recommend that a legal
representative be hired who is equipped with the capacity to make
decisions without any interests created in the local environment and
obviously this representative of the company should be bilingual.
2.- RESPECT FOR THE RIGHT OF ASSOCIATION
AND FREE ELECTION.
Taking into consideration that the conflict
originated out of the discontent of an important sector of workers
toward the CROC union because it did not represent their interests, I
propose as a solution that an honest meeting be made in which the
workers choose their future union, where they choose in an open and
safe environment whether they want the CROC to continue representing
them or if they wish another organization, either another existing
union or a new one of their own. Before such meeting takes
place, it is important that all the workers dismissed be rehired
including the first five who were dismissed.
This meeting should take place under a framework
of respect for the physical integrity and security of the
workers. The company, the CROC and the local labor authorities
should commit to this framework and respect the results and be
instrumental in its compliance. Also, they should commit not to
pressure the workers before, during, or after the election. To
assure that there is no pressure put upon the workers, I recommend the
presence of observers and the participation of all the workers
including those who were dismissed. The voting process should be
free, universal and by secret ballot.
All parties involved should commit to respect the
results of the election to make sure that is implemented. For
example, if the majority of the workers vote for a new union, the CROC
union should respect this decision and accept it in a peaceful and
immediate fashion. The company should also recognize the new
union as the direct representative of the workers' collective
bargaining committee. If the workers vote to continue have the
CROC as their representative, the union should agree that it will not
take any reprisals against the workers who voted against them.
It is also important that the execution of the
election results have the commitment of local labor authorities and
government representatives of the state and that they will not place
any obstacles against the decisions made by the workers. Having
this commitment will obligate the company to make sure that the
election results are carried out. It is important that high
level negotiations with state government take place so that they can
understand the dimension of the conflict and can assure that the work
situation will get back to normal using a long-term scheme directed
toward the growth of employment. This can be possible based on
the importance of the company in the region and the interest of the
local government in granting demands to companies. As of now the
conflict has not led in this direction not only due to the lack of a
company representative that has professional autonomy and authority to
make decision but also due to the fact that meetings have been held
with low level government officials that do not understand the
complexity of the problem and are usually connected and dependent on
the leaders of the region.
3.- REVISION OF THE SALARY STRUCTURE,
CONDITIONS OF WORK AND TREATMENT OF PERSONNEL
Every time that the salaries of a business are
very low in comparison to the market, a revision with possible
improvements is necessary, which provides, without threatening the
source of employment, a salary that can allow the workers to fulfill
their basic needs.
It is fundamental that the promises that the
company has expressed to the workers ("guarderías" and
promotions) be kept; otherwise it will be considered a lack of
compliance by the company.
Regarding the conditions of work, specifically
that of the cafeteria, a change of "concession" is necessary
to a provider that has greater approval and that provides a diet in
agreement with the local culture.
Regarding to the treatment of the personnel, is
fundamental to develop a revision of rules that favor the growth of
mutual respect. It might be necessary to conduct an introductory
training for the Korean employees so that they can learn the customs
from one country to another.
These recommendations without a doubt should be
accompanied with a process of normalizing the labor relations in which
the workers and the community understand the importance of promoting
employment growth and assure their collaboration. I also
recommend monitors to oversee the enforcement of these
recommendations. These monitors must be independent observers
who are overseeing and certifying the execution of the
recommendations.
LIC. ARTURO ALCALDE JUSTINIANI.