Case story

  • China

Fair Labor Association - Complaint Regarding Taiway Sports Factory in China

China 2008

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Case Status

Alleged non-compliance with several elements of the FLA Workplace Code of Conduct and compliance benchmarks, including:

  1. excessive overtime;

  2. failure to pay minimum wage;

  3. improper payment of wages;

  4. discrimination based on a worker’s provincial origin;

  5. retaliation against workers for using grievance procedures;

  6. improper contracting;

  7. poor and unsafe conditions in dormitories;

  8. (8) poor quality of food in canteen.


Story

Participating Company PUMA filed a Third Party Complaint on April 22, 2008, against Taiway Sports—a PUMA supplier factory in Dongguan Province, China. PUMA’s complaint conveyed to the FLA allegations made by China Labor Watch, a New York-based labor rights organization, regarding the factory’s non-compliance with several elements of the FLA Workplace Code of Conduct and compliance benchmarks. PUMA waived its internal assessment of the situation at Taiway and requested expedited consideration of the Third Party Complaint. Specifically, PUMA asked the FLA to carry out an assessment of the situation at the factory using either an expert or an FLA-accredited independent external monitor. The FLA commenced the Third Party Complaint process (at Step 3) on April 22 and requested further information from China Labor Watch about the allegations in order to construct the terms of reference for an independent investigation. On April 29, the FLA engaged Impactt Ltd. to conduct the said independent investigation. Impactt, Ltd., a consultancy firm specializing in supply chains founded in the UK in 1997, is accredited to monitor the full FLA Workplace Code of Conduct in China. After a two-day unannounced investigation at Taiway Sports on May 6-7, 2008 (which consisted of a site walk-around; interviews with management and workers; and document review), Impactt submitted a 23-page report to the FLA and to PUMA on June 12, 2008.


Outcome

Impactt Ltd. conducted an independent investigation at the Taiway Sports factory in Dongguan, China and identified a number of issues requiring corrective action. Impactt did not make findings to corroborate allegations regarding failure to pay minimum wage, improper payment of overtime premiums, discrimination based on workers’ provincial origin, retaliation against workers for using grievance procedures, and improper contracting; as such, those issues were excluded from the corrective action plan. Taiway Sports management, with support from PUMA, developed a CAP in order to address each of those issues. The factory agreed to provide periodic verification of the implementation of the CAP, with an independent verification of the CAP after 12 months, which will be accessible on the FLA website. In view of these developments, the FLA has decided to formally close the Third Party Complaint filed by PUMA.


References

FLA case story page: http://www.fairlabor.org/report/taiway-sports-factory-china

Contributor(s): This article was modified by Admin (6), Kyle (4), and Nicolaclayre (3).