Mulan's sisters

Working for Disney is no fairy tale

By Hong Kong Christian Industrial Committee and CAFOD
Hong Kong, February 1999

For Correspondence,
Hong Kong Christian Industrial Committee
Add: 704-5, 57 Peking Road,
Kowloon, Hong Kong
Tel: (852) 2366 5860
Fax: (852) 2724 5098
E-mail:hkcic@hknet.com
Mulan is an ancient Chinese legend which tells the story of a young woman taking her father's place when he is called up to join the army. In order to protect her father, she dresses up as a man, fights bravely and wins a great victory for China.

In the Summer of 1998, the animated film "Mulan" was released by the Walt Disney Company. It is the first Disney picture set in China. It is the perfect vehicle for Walt Disney Company's strategic incursion into the Chinese film market. *1) A 1.2 billion population is an attractive market to any Transnational Corporation. The Western market alone can no longer satisfy Disney's appetite for new markets. So, "Mulan" is a new step forward in developing the potential of the Asian market.

"Mulan" was banned in China because Disney had made the Chinese Government angry by sponsoring the film "Seven Days in Tibet".

But the Government has relented and the film was premiered on 23 February, 1999. Although many people in Mainland China may not see the film "Mulan", they see and live the story everyday. Millions of women workers in China are doing just what Mulan did. Over 90% of them are under 28. They leave their homes to work in distant cities (sacrifice themselves) in order to earn money for their parents and younger siblings (save their families), especially so that their younger brothers can go to school. But one thing is different. They cannot expect the happy ending that awaited Mulan.

Mulan was born in troubled times when her country was being harassed by a foreign invader. Workers in China are now facing a similar situation. Because of the Asian financial crisis, everyone in the region is suffering. Employers find it difficult to run their businesses under such grim circumstances. It is harder for workers to survive. Workers' lives in factories are hard. They are the first group to suffer in the financial crisis.

*1)Kathi Maio, "Disney's Dolls", The New Internationlist, Issue 308 (December 1998)

Disney in China

There are many Disney licensees in China producing Disney toys, garments, and footwear. Most of the goods are exported. It is a prime example of globalization. Like other Transnational Corporations, the Walt Disney Co. has issued a Code of Conduct which is modified to conform quite closely to the Workplace Code of Conduct which resulted from the White House Apparel Industry Partnerships in 1997. Disney claims that they are seriously concerned about the implementation and monitoring of the code by all subcontractors. *2) However, people working for Disney licensees in China do not benefit from it. Their hard lives still continue. The stories of suffering are illustrated clearly from the following fieldwork studies made by the Hong Kong Christian Industrial Committee from July 1998 - February 1999.

Case 1: Sheng Li *3)

*2) In a letter addressed to the Clean Clothes Campaign by Mr. Didier Vanneste, the managing director of The Walt Disney Company Benelux (September 23, 1997)
*3) This translation is made by the author

Sheng Li produces clothes with Mickey Mouse charter. The products are for export. It is a small factory with 60 - 80 workers. 80% are women aged 18 - 26, responsible for sewing.

Legal protection

Most workers claimed that they had signed two-year contracts but they got no copies of their contracts. Illegally, RMB *4) 20 was deducted each month from workers' wages as "deposit". No money would be refunded if workers worked for less than two years.

Workers did not enjoy medical insurance, although the factory is obliged to do so according to the Chinese Labour Law.

*4) RMB is the currency in China. US$ 1.00 equals approximately RMB 8.3

Wages and Working hours

Before working for the factory, workers were charged RMB 22 (RMB 2 for an identity card and RMB 20 for tools). Workers were told that the tool deposit would be returned if the tools were not damaged.

Workers were paid on a standard piece rate. Even for overtime work, only RMB 0.8 was paid extra for each night above the piece rate. According to the Chinese Labour Law, however, workers should be paid 1.5 times normal payment for working overtime on weekdays and double time on Saturdays and Sundays. Workers said that they usually worked for more than 12 hours a day in the peak season, 0830 - 1200, 1330 - 1730, and 1830 - 2330. Generally, they worked six days a week even in the low season but they had no holidays in the high season. They earned only RMB 500 - 700 a month.

Accommodation and Food

All of the workers lived in dormitories. Each dormitory building was guarded by a security guard. The regulations were written on a notice board at the gate. Workers were charged about RMB 30 a month for accommodation. Some lived in a four-storey building where the lower two storeys and a half of the third floor were used as a warehouse and the other floors were used as dormitories. This violated the Chinese fire regulations. 14 - 16 workers lived in a flat and about five workers shared a room measuring around 10 square meters in which several bunk beds were placed.

Although workers complained that the meals supplied by the factory were bad, they had to pay RMB 50 a month for food, even though some workers would rather cook for themselves. They were fined RMB 12 if they took three days or more off a month.

Management

Some workers complained that it was unfair that their supervisors often offered well-paid jobs to their own villagers, but workers without connections were given low-paid jobs.

Code of Conduct

According to the Walt Disney Company's "Code of Conduct for Manufacturers":?

Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times.

There was no publication of the Code of Conduct to workers.

Interviews in the dormitory

The researchers came across five women workers on the ground floor of their dormitory building which was next to the factory and which was not guarded by any security staff. They invited us to chat in their room.

The room, in which three bunk beds were placed, was in a flat on the third floor. A small fan without safety protection was the only equipment for ventilation in the sweltering heat. Fortunately, there was a big window in the room. Workers could enjoy fresh air and a good view.

Two of the workers came from Guangxi whilst the others were from Guangdong. They had worked in town for six - seven years since they were 16 years old and had worked in different factories in different areas, such as Shenzhen, Zhongshan, Guangzhou and so on.

These young women did not have any dreams for themselves. Frequent changes from one factory to another make it difficult for workers to develop skills. Workers always do unskilled work and are forced to stay in the lowest rank. When they reach 30, they will be replaced by younger women.

Their future is very uncertain. Most workers would prefer staying at home with their families, to working in a factory. Most of them had primary education. They wish to create more chances for their younger siblings to pursue higher education. As elder sisters, they wanted to lessen the burden of their families. However, their wages were too low for them to send money home. In fact, they found it more and more difficult to afford their own livelihoods because of increasing inflation in the urban areas.

Furthermore, they were not aware of their labour rights although the Chinese Labour Law was passed in July 1994. They did not know about legal protection.

The workers said: "We are used to being deprived. We have suffered for a long time. It is common for employers to exploit us."

Case 2: Midway Daily Products Ltd.

Interviews took place during the low season, but one worker said that they had worked 30 hours overtime in the previous month.

Besides clothes, the factory makes shoes and dolls with charters of Disney figures. According to the workers interviewed, about 600 people work in the factory - half are men and half are women. Most of the workers are aged 20 - 30 and come from other provinces, such as Sichuan, Hubei and Hunan. Interviewees were chosen at random but all of the workers had been in the factories less than six months.

Working hours/wages

The normal working hours are 08:00 - 11:30 and 13:15 - 17:00 for five and a half days a week. Workers were forced to work overtime which was usually from 18:00 to 20:00. But in the high season, overtime would be extended to 22:00 and it was common to work on Sundays. Hours worked on Saturday afternoons and on Sundays were considered overtime. However, according to the Chinese Labour Law, the normal working time should be five days a week, not five and a half. So work on Saturday morning is also overtime work and payment should be double the normal rate. Workers could not refuse to do overtime, but only RMB 0.8 per overtime hour was paid on top of the piece rate. This is lower than the minimum wage for overtime according to the Chinese Labour Law.

Wages were mainly calculated on a piece rate basis except for clerical and managerial staff. One woman worker complained that she had been promised RMB 800 a month in her contract but her pay was calculated on a piece rate basis. Piece rate is a system which makes workers' income unstable. Their wages vary from season to season. One worker said she usually earned RMB300 - 400, but RMB 1,000 in the high season. On average, most workers could earn RMB 600 a month in the low season (including overtime) RMB 1,000 in the high season.

Workers' welfare

Free accommodation and food were provided by management. However, a sewing worker said that according to her contract, she should receive RMB 350 as food allowance every month. However, the money was deducted from her wages.

Nine - ten workers shared one room, measuring around 10 - 15 sq. meters.

Some activities were organized for workers, such as musical activities and sports, but there was no trade union and nobody would stand up for workers' rights.

Some workers did not sign contracts with the factory but some did. By law, however, enterprises must sign contracts with all workers. According to law, enterprises should join health and safety insurance and medical insurance for workers, but the factory did not. Workers had to pay for their own medical care. However, the factory would provide medical care for victims of industrial accidents.

In the first three months the workers paid RMB 30 per month residential tax, which should be paid by factory owners.

Management

If workers arrived a minute late, they would be penalized RMB 2; if 5 minutes late, RMB 10. Those workers who arrived more than 15 minutes late were regarded as absent and fined RMB 30. Anyone who was absent for three days was fired. Workers were also fined if the products they made were sub-standard.

Workers were requested to pay RMB 50 as entrance fee and RMB 100 as deposit. All such charges are prohibited by The Chinese Labour Law. Their deposits would be confiscated if workers left the factory within the first three months.

General evaluation

Workers were very unhappy with the fines system. "It is so harsh". Our researchers also found the penalty regulations posted outside the canteen. Employees in this factory could earn more than average income in Guangzhou in the high season, but their wages were very low in the low season. Moreover, income was unstable because of the piece rate system. The deposit and entrance fees were clear violations of the Chinese Labour Law.

Work on Saturday afternoons and Sundays is paid at the overtime rate. It is better than many factories, especially those in Dongguan. However, it still violates the law as workers are not paid overtime for Saturday mornings. Moreover, workers said that they worked 30 hours overtime from late June to mid July, 1998. If this had included Saturday morning as overtime, the total would exceed the legal limit of 36 hours a month.

Case 3: Guo Nian Garment Factory *5)

There are about 200 workers in the factory. The factory mostly produces children wear with charters of Disney figures. All but about a dozen are women, most of them are between 20 and 30 years old. Most of the employees come from rural villages in Sichuan, Hunan, Guangxi, Hainan, and Jiangxi.

*5) This translation is made by the author

Working hours/ Wages

The daily working hours were 0800 - 1200 and 1330 - 1830. However, workers could seldom take a short break. They often worked overtime until 0200 - 0300, especially in the high season. As a result, they were working for more than 16 hours a day. It is clear that the factory seriously violated the Chinese Labour Law on working hours. The Chinese Labour Law clearly states that for overtime work, employees should be paid 1.5 times the normal working rate Monday to Friday, and double time on rest days (Saturday and Sunday). However, they were only paid an extra 10% of the normal rate for working overtime. They usually worked seven days a week. However, most of them just earned about RMB 500 - 600 a month (including overtime). Sewing workers could earn up to RMB 700-800, on a piece rate basis.

Workers had to pay a month and a half wages as deposit when they started working in the factory. The deposit would not be refunded if they stayed in the factory less than a year. Although it is absolutely prohibited by the Chinese Labour Law, it is a common way for employers to keep their workers.

Accommodation and Catering

Free accommodation was provided. 10 - 12 workers lived in a room with five - six bunk beds. A fan was installed. Hot water was only available on the ground floor of each dormitory building. It was dangerous for workers to carry hot water up to rooms.

Workers were charged RMB 60 for catering. Meal permits would be issued when workers started working. The total charge of catering, water and electricity was RMB 75, and was deducted from workers' wages every month.

Welfare

Workers received no welfare or social security at all. As the Chinese Labour Law states, labour contracts should be signed by both management and workers. But, Guo Nian workers claimed that they had signed no contracts and had never enjoyed social insurance. All of these violated the Chinese Labour Law.

There was no trade union or workers' organization in the factory. Workers knew nothing about labour law, trade unions, or collective bargaining.

Penalties

Workers were fined RMB 50 if they were absent for a day without prior permission. The management never actively dismissed workers but tried to force out workers who wanted to leave. One method was withholding workers' wages.

Strikes

As interviewed workers claimed, the factory often did not pay wages on time and most payments were delayed for about two months. On 16 June 1998, workers decided that they would not stand any more and organized a strike to fight back for their salaries. The protests, however, were unsuccessful. Worse, their wages were calculated by piece rates. There would be no work done and hence no wage if they joined strikes.

In February this year, workers complained that they had received no payment for three months. As the Chinese New Year was approaching, many workers planned to return home for holidays. Management promised to deliver their wages on 9 February 1999. Several workers who could show their confirmed train tickets for travelling back home were given their wages but most workers could not get any money. As the price of train tickets was increasing daily, they wanted to buy the tickets as early as possible. The employer, however, failed to keep his promise. They were deprived of the right to meet their families. New Year is the most important festival in the Chinese calendar.

Case 4: Chi Li An Footwear Factory
Fei Fan Footwear (Panyu) Ltd Co. *6)

The Chi Li An Footwear Factory and the Fei Fan Footwear (Panyu) Ltd. Co., which had manufactured children shoes with Disney charters, were closed when our researchers visited the factory. The building was occupied by another garment company. Two legal statements were posted explaining why the factory was closed.

*6) The factory has two different names. The names are author's translation.

On the night of 16 July 1998, the factory boss fled to the US with all money. After checking, the factory owed workers RMB 400,000, of which RMB 300,000 was wages for workers. Workers' wages from April - July 1998, workers' entry deposits, and other money was all gone.

Fei Fan workers brought the case to the Panyu Labour Tribunal.

158 workers brought the case to court and accused their employer of running away with the money. Individual debts varied from RMB 70 to RMB 11,895. The court found that the factory owed 158 workers RMB 277,954.25.

According to the posted tribunal statement, the employer did not sign labour contracts with workers and charged each worker RMB 100 - 500 as entry deposit. Both of these violated Chinese Labour Laws. Worse still, workers' wages were three and a half months in arrears, amounting to RMB 253,125. Workers' entry deposits and other money, which amounted to RMB 24,829.25, were all withheld as well.

The committee of the Da Ping Industrial Zone could only pay RMB 131,913.85 for workers in advance. All of the factory's assets would be auctioned on 5 November 1998, according to the public announcement issued by the People Court of Panyu City Guangdong.

Conclusion

It is easy for the Walt Disney Co. to issue a code of conduct. According to our research, however, it is obvious that the code is not fully implemented by its suppliers and that workers have little idea about the code. Disney should strengthen monitoring of its suppliers and should introduce an independent monitoring system to ensure that its code is fully respected.

Disney is not an isolated case, but rather a typical example in the process of trade liberalization around the world. Transnational corporations abandon production in their home countries and instead sub-contract orders to their partners, and then those partners set up factories in developing countries, such as China and Thailand, where the independent trade union movement is weak and labour legal protection is minimal.

Many corporations claim that worker's rights can be protected by their code of conduct movement. In a certain sense, however, it is absurd to talk about labour protection in countries in which workers' rights are hardly protected, especially the freedom of association and the right to collective bargaining. That is not to say that all of codes of conduct are just public relations exercises, but corporations can keep many things under their control, and without big pressure from workers, they use their codes of conduct as public propaganda. Research shows that the business of corporations is expanding because of code of conduct propaganda.

Moreover, a multi-level subcontracting system is too complicated to monitor. Trade unions and NGOs put much effort into identifying suppliers, and corporations' publicity has made a great impact on consumers. Even though workers are proven to be exploited, corporations just shift their orders to other factories. Corporations earn a good reputation but the situation remains unchanged. The only way is for labour groups to continue working to identify new suppliers. For example, when the violation of workers' rights by Guo Nian Factory was publicized, Disney's simple answer was to discontinue orders to Guo Nian Factory. It seems that Disney is acting positively to NGOs' complaint, but nobody knows what is happening at the new supplier or other suppliers.

Workers do not know how to protect themselves. Many workers know little about the Chinese Labour Law and the codes of conduct of corporations. Moreover, when incidents happen, they do not know how to ask for help. For example, the manager of the Fei Fan Footwear (Panyu) Ltd. withdrew all the company's money and ran away. Workers could do nothing but take the case to court. However, they needed money to go back home because Spring Festival was getting closer. During the whole process, no people or organizations came to help the workers. The official trade union and local labour officers were not around, and no emergency support came from government. Workers were completely helpless. They also did not know that they could approach Disney because Fei Fan produced Disney products. Only after CIC staff visited the factory, was the issue reported to Disney and to the international community. This case shows clearly that workers should be empowered through raising consciousness and education, especially about workers' rights. Moreover, workers should be educated about social networks of assistance.

The official trade union did not side with the workers. Without independent trade unions and labour groups, Chinese workers cannot organize to safeguard their rights.

Chinese workers are in a very disadvantageous situation. In the face of exploitation by management, they can do nothing but tolerate it because they must keep a job to support their own livelihoods and those of their families. There is no social network to help them to defend their rights, and it is difficult to work with them in international solidarity. They also do not know how to request international support. Moreover, they are prohibited from organizing to protect their own rights. Without pressure from independent trade unions, corporations can greatly propagandize their respect for freedom of association in their codes of conduct, but this is just lip service.

Consumer campaigns always urge transnational corporations, like Disney, to fully implement their codes of conduct. However, their concerns focus more on working conditions and health and safety. These, of course, are very important, but more fundamental issues are the right to self-organizing and the right to collect bargaining. Without workers' organizations, any rights are easily denied. In fact, workers themselves should monitor their factories ultimately. On the one hand, we continue to fight against corporations for the right to organize workers. On the other hand, we demand that the Chinese Government permit independent trade unions.