The International Networking Experience in Labour Resistance Cases from Taiwan-invested Factories

Youth Labor Union 95, Taiwan
Written by: Chia-Wei Liang
Reviewed by: Ray Cheng
Editor: May Tam

 

Foreword

This research report records and analyses four labour resistance cases occurring in Taiwan-invested factories in developing countries.  International networking was involved in these cases and its effectiveness in labour movements is particularly examined in the report, so as to provide significant experience sharing and important reference for future labour campaigns.  

The four labour cases will be elaborated in detail, with an emphasis on the international networking experience in each case.  Then five campaign strategies for labour resistance and their efficacy in labour movements will be discussed.

The four cases emerged respectively in Nien Hsing Textiles’ jeans and garment factory in Nicaragua (2000), Tainan Enterprises’ textile factory in Salvador (2001), Foxconn’s high-tech product factory in Mainland China (2010, 2015), and Formosa Plastics Group’s iron and steel factory in Vietnam (2015-).

 

I  Four cases of international networking experience in labour resistance campaigns in Taiwan-invested factories

1. The case in Nien Hsing Textiles

Nien Hsing Textiles invests mainly in the OEM (Original Equipment Manufacturer) production of denim and jeans.  It has a production site in Nicaragua.  The clients include Levi's and department store garment brands like Target, Kohl's and Wal-Mart.

In 2000, two labour unions emerged in Nien Hsing’s Nicaragua factory, namely the rightist CNT and the leftist CST.  During the year, CNT members got pay increase whereas CST members did not, which had aroused CST members to go on strike.  The management dismissed all CST’s executive members and demanded workers to sign an agreement to withdraw from CST and join CNT.  Those refused to do so were fired on the spot, which led to a total of 500 CST members getting sacked.

 

The resistance campaign

  • Activities outside Taiwan
  • Organisations like Campaign for Labor Right mobilised the US social movement groups to protest against Kohl's, which was the major client of Nien Hsing, was demanded to avail its influence to prompt Nien Hsing to compromise with the labour union CST.
  • When the then Taiwan President Chen Shui-bian visited Central America, the union protested at the spot.
  • The US Congress members sent letters to Chen Shui-bian and the then US President Bill Clinton, asking them respectively for looking into and intervention in the case.  Later the US Trade Representative Charlene Barshefsky sent a letter to the Nicaragua Government, saying that if the dispute could not be settled, the trade preferences for Nicaragua might be revoked.
  • The International Textile, Garment and Leather Workers’ Federation and CST joined hands to initiate a lawsuit at the International Labour Organization (ILO), alleging the Nicaragua Government’s infringement of workers’ freedom and right to association.  The allegations were substantiated but such a ruling did not carry any binding force.  The ILO only urged the Nicaragua Government to encourage negotiations between the workers and the employer.
  • The United Steelworkers in the US supported CST to sue Nien Hsing in the California court for damages under the Alien Tort Claims Act, but CST later withdrew the claim.
  • Social movement groups and labour rights organisations in the US and Canada launched petitions to the Taipei economic and cultural offices situated in the protestors’ local cities.
  • Activities inside Taiwan
  • Taiwan’s concerned groups joined hands to form a Support Group which launched petitions at the Nien Hsing’s headquarters.
  • When Nien Hsing held the investor conference, the Support Group attended, distributed leaflets at the venue and made a speech doubting the enterprise concealed the labour dispute.  Afterwards Nien Hsing’s share price had plummeted for a week.      
  • The Support Group petitioned Taiwan’s Ministry of Foreign Affairs, accusing the Ministry of siding with Nien Hsing.  The group particularly suspected that Nien Hsing’s General Manager took advantage of his relations previously built with the Nicaragua Government when s/he worked for the Ministry, that might facilitate him/her to gain political benefits afterwards.  This is doubted as violating the “revolving door” provisions of Taiwan’s Civil Service Retirement Act. 
  • The Legislative Yuan organised (a) public hearing session(s) on the matter.  All the government officials from relevant departments attended the session(s) and demanded Nien Hsing to reach an agreement with CST as soon as possible.  There was/were Labor Funds Supervisory Committee member(s) requesting the Labor Funds Bureau to sell Nien Hsing’s shares at hand.   

 

Results of the resistance campaign

CST won a lawsuit in 2001.  The Appeal Court of Nicaragua’s city of Managua made a final appeal ruling that Nien Hsing had to reinstate all the sacked CST members.  However, the management rejected the demand.  After numerous rounds of negotiations, the management finally followed an agreement to reinstate four CST’s executive members and 17 of its members who had been illegally dismissed.  The remaining sacked CST executive members were to receive a double amount of the statutory severance payment and the wage entitled to them during the dispute period.   

2. The case in Tainan Enterprises

Tainan Enterprises manufactures OEM products of casual wear, serving the US brands such as Gap, Ann Taylor and Columbia Sportswear.  It has (a) factory/factories in Salvador.

In 2001, the workers in the Salvador factory formed a textile labour union, the STIT.  In 2002, the number of the union members grew to exceed half of all workers in the factory.  At this moment, Tainan Enterprises started to cease production gradually, explaining to the public that the reason was a lack of production orders.  However, STIT suspected that the management was evading the labour union’s possible collective bargaining in the future, and thus planned to close down the business.  In April of the same year, Tainan Enterprises announced closure of the factory and withdrawal of investment.

 

The resistance campaign

  • The US human rights groups imposed pressure on Tainan Enterprises’ major clients, most of which supported labour rights and expressed concerns for the matter.   
  • Labour unions and support groups across Salvador, Taiwan and the US synchronised their protests in these three places.  Groups of the first two places petitioned at their local Taiwan offices while the US groups protested against the garment retailer Footlocker which was the only Tainan Enterprises’ client had not yet put pressure on the enterprise. 
  • President of Tainan Enterprises Yang Ching-feng was an active member of the Presbyterian Church in Taiwan.  Taiwan’s labour rights groups requested the Church to investigate Yang’s acts of infringing upon labour rights.
  • Workers of Tainan Enterprises’ factories in other countries joined in supporting the resistance campaign.  The Cambodian labour union, FTUWKC, which had a branch union organised in Tainan Enterprises’ Cambodia factory, stated: “not to allow the management to use us as strikebreakers”.  This implies that Cambodian workers would not covet the production orders shifted from the Salvador factory once the factory closed down.  Another four Indonesian unions networked together for the same position.

 

Results of the resistance campaign

The union, STIT in Salvador, under the lead of the International Textile, Garment and Leather Workers’ Federation, engaged in negotiations with the management and finally reached an agreement in November 2002.  The agreement was about the creation of a new factory, which would be set up by the capital from Tainan Enterprises and jointly managed by the labour and the enterprise, was to employ those workers losing their jobs due to the closure of the previous factory.  The US big brands like GAP and Ann Taylor promised to try the best to give production orders to the new factory.

3. The cases in Foxconn

林佳禾, Coolloud, 2015

 

The Foxconn factories were under Hon Hai Technology Group which is an enterprise for high-tech services.  The Group has set up a Foxconn plant in Shenzhen of China where two major labour disputes occurred, namely the workers committing suicides in 2010 and the outbreak of leukemia among the workers in 2015.

A. The resistance campaign about workers committing suicides in 2010

There had been over 10 cases of Foxconn’s factory workers in Shenzhen plunging to their deaths within a period of less than six months.  The news media disclosed Foxconn’s abusive working conditions such as overtime work becoming a normal routine.  It was said that no chairs were placed next to the assembly lines, and the workers had to stand up working for 12 consecutive hours and were disallowed to talk.  There were people pointed out that the factory management was of brutal and half-militarised style, with managerial-level officers frequently scolding and even beating up the workers.     

 

The resistance campaign

  • China: Sociology academics co-signed an open letter, requesting the China Government to seriously address the problems of widening rich-poor gap and exploitation of migrant workers; netizens made music video(s) titled “Blood and Tears in Foxconn” for protest; a Beijing art group formed by workers mourned the deceased Foxconn workers through performing folk music drama.
  • Hong Kong: The Students and Scholars Against Corporate Misbehavior (SACOM) initiated protests at Foxconn’s Hong Kong headquarters.
  • Taiwan: Labour rights groups organised series of protests and petition activities – holding mourning sessions for the deceased workers at the headquarters of Hon Hai Technology Group (parent company of Foxconn); requesting Terry Gou (founder and president of Hon Hai Technology Group) to reveal the working conditions at the Foxconn factories; demanding to “end the murderous assembly lines” during protests at the venue where opening and closing of the Taipei international information technology exhibition took place; and pressing for disclose of “six major high-tech industry criminals” who butchered the rights of the disadvantaged such as workers, farmers and the environment, with Hon Hai being included on the list; and launching protests at Hon Hai when it held the General Meeting of shareholders.

 

Results of the resistance campaign

Foxconn implemented twice significant wage rise for workers and limited overtime work hours.  However, the workers enjoyed limited benefits from these measures because subsidies on housing and meal expenses, quarterly bonus and seniority allowance originally enjoyed by workers were all cancelled after wage increase.  Although the overtime work hours were reduced from 100 hours to 60 to 80 hours, the workers sometimes had to work additional hours exceeding this limit without pay. 

B. The resistance campaign about leukemia in 2015

According to news reports of the UK newspaper, Daily Mail, there had been at least 13 young workers in Foxconn factory in Shenzhen diagnosed leukemia since 2010, with five deaths.  Both the family members of these patients interviewed by the newspaper and a Hong Kong non-governmental group, Labour Action China (LAC), regarded the cause of the illness as workers contacting at work a kind of detergent containing benzene.  LAC also accused the factory of firing those workers diagnosed the illness and refusing to pay for their medical expenses. 

However, Hon Hai refuted that the sick workers did not directly contact benzene at work, and also the annual incidence of the illness at the Shenzhen Science and Technology Park where Foxconn was situated was lower than the incidence of China at large.

 

The resistance campaign

Hong Kong labour rights groups, LAC and SACOM, networked with their counterparts in Taiwan to conduct a series of protests:

  • Launched protests at the Syntrend Creative Park in Taiwan.
  • Held a press conference on the eve of the enterprise’s General Meeting of shareholders, in which videos about the patients’ situation were shown to accuse Foxconn of perennially exploiting Mainland China’s workers and evading compensations paid to them.
  • LAC urged the Taiwan public to demand their government to enact laws regulating the operation of Taiwan business sector’s overseas investments, guarding them against infringing upon labour rights and harming the environment.  The group also wrote letters to Apple Inc. and Foxconn, petitioning for better labour rights as well as compensation for workers suffering from leukemia.
  • Launched protests at Hon Hai’s General Meeting of shareholders, planning to submit to Hon Hai’s President Terry Gou an updated report on the working conditions of Foxconn workers as well as a letter written by the families of those leukemia-plagued workers, requesting Gou to intervene in the matter.

 

Results of the resistance campaign

Shortly after campaigning by the Taiwan and Hong Kong organisations, Shenzhen Foxconn contacted one of the workers suffering from leukemia for providing “humanitarian relief” to support his/her medical and living cost of a certain period.

4. The case in Formosa Plastics Group’s iron and steel factory in Vietnam

Formosa Plastics Group (FPG) owns more than a hundred companies which cover a wide range of industries such as oil refining, petrochemical, plastics, fiber, textile, electronics, energy, steelmaking, transport, machinery, medical products and biotechnology.  The investments reach a number of countries, including Vietnam.

In 2015, FPG’s iron and steel factory in the province of Tỉnh Hà Tĩnh in Vietnam started production.  Next year, an unprecedented huge number of dead fishes were found in Central Vietnam.  It was widely believed that the incident was related to the waste water discharged from the FPG iron and steel factory in Tỉnh Hà Tĩnh.  The Vietnam Government estimated that over 40,000 people were directly and 170,000 indirectly affected by the pollution.

 

The resistance campaign

  • An investigation conducted by the Vietnam Government confirmed the FPG iron and steel factory to be the main cause of the pollution.  FPG apologised and was willing to make reparation.  But the victim fishermen were not properly compensated and they continued the fight and launched an international signature campaign. 
  • The Vietnam’s public filed three lawsuits.  The first case, before any trial took place, was dismissed by the court on grounds of insufficient evidence.  The second one was instituted by postal litigation but no legal proceedings were followed after posting of pleadings.  In the third case, the plaintiffs were suppressed by the police on their way to the court.  Worse still, some plaintiff(s) were sentenced, and afterwards, almost no one dared to follow up on the case.
  • The area most affected by the pollution was the Catholic Diocese of Vinhensis.  Its bishop went to the Office of the Taiwan President to submit a petition letter co-signed by people around the world, which urged the Taiwan Government to demand FPG to offer solutions for the matter.
  • Taiwan’s green groups, human rights groups and Taiwan people with Vietnam nationality attended the FPG’s General Meeting of shareholders for protests, demanding the enterprise to shoulder corporate social responsibility.
  • Families of the Vietnamese victims appointed lawyers to launch litigation at the Taipei District Court of Taiwan to claim a reparation of 140 million Taiwan Dollars for over 7,000 Vietnamese plaintiffs.

 

Results of the resistance campaign

The legal proceedings in Taiwan are still in progress, with a legal debate on the forum of the case.  Although the District Court and the High Court both considered that it is the Vietnamese court, not the Taiwan court, to hold forum and jurisdiction over the case, the Supreme Court holds different views and has remanded the case to the High Court for retrial.

 

II  Analyses of resistance campaign strategies

This part analyses five labour resistance campaign strategies, namely (1) direct protests, international networking and imposing pressure on the brands concerned; (2) litigation; (3) imposing pressure from the Overseas Chinese and Foreign Investment Commission; (4) investments vetting by two international human rights covenants; (5) regulating investments in the public pension fund and in government procurement.

1. Direct protests, international networking and putting pressure on the brands concerned

This is the commonly used strategy which is to launch protests directly targeting the factory owners, or conduct petitions at the place where the parent enterprise is situated or at other places or where the enterprise has set up business.  Protests could also target the enterprise’s partners at its upstream and downstream operation.  The effectiveness of this strategy could vary upon different protest participants and people whom a campaign is targeted at.

This strategy was adopted in all of the four labour resistance cases.  Its effectiveness is relatively obvious in the first two cases whereas no avail for the latter two.  The most effective campaign action for the Nien Hsing case is that the Taiwan Support Group attended the enterprise’s investor conference to express doubts about the enterprise’s concealing the labour dispute, which caused the Nien Hsing’s share price to have plummeted for a week.  For the Tainan Enterprises case, the most impactful action is the workers from the enterprise’s factories in other countries joining to support the resistance campaign, such as labour unions in Cambodia and Indonesia participating in solidarity, which had finally compelled the enterprise to give in.  This shows that the greatest pressure could be imposed on an enterprise through the international networking of workers across countries working for the same enterprise.

The Foxconn case saw little avail of this strategy.  The participants of the international networking were mostly labour groups from China, Hong Kong and Taiwan but not workers of the enterprise.  Moreover, the pressure put on the brand, i.e. Apple Inc., was inadequate, so the enterprise could easily resolve the resistance. 

The labour campaign of the FPG’s Vietnam iron and steel factory case was disbanded due to Vietnam Government’s siding with the enterprise.  The protests taken place in Taiwan were initiated mainly by public groups, which could hardly create pressure.  When there is a great disparity between power of the two sides, the only campaign tool to be taken is litigation which is a part of the established institutions.

2. Litigation

This is not a commonly adopted strategy because of its time-consuming nature.  After a labour dispute has entered into legal proceedings, the determinant for victory no longer lies in organisation power and group networking, but the approaches taken by lawyers and judges, and the resistance campaign would become passive.

Among the four cases, only the Nien Hsing case and the FPG’s Vietnam iron and steel factory case employed this strategy.

The Nien Hsing case resorted to litigation at the International Labour Organization (ILO), accusing the Nicaragua Government of infringing upon workers’ right to free association.  The labour side won the lawsuit.  However the ruling has no binding power and thus of little practical significance.  In the FPG’s Vietnam iron and steel factory case, a huge power gap existed between two sides, which makes litigation almost the only means for resistance.  The legal case now handled by the Taiwan judiciary has been stuck in controversies of whether Taiwan has jurisdiction over the case, and thus the case is still in proceedings.  The court’s final decision on this will become important legal reference for future cases.    

The following three strategies were not adopted in the four labour cases, but they could be considered as future campaign tools:

3. Pressure imposed by the Overseas Chinese and Foreign Investment Commission

Taiwan’s Ministry of Economic Affairs has established the Overseas Chinese and Foreign Investment Commission which is to vet foreign investments in Taiwan as well as Taiwan investments conducted overseas when an investment amount exceeds a certain level.  There are vetting rules stipulating that if a Taiwan enterprise investing overseas has violated Taiwan’s Labour Standards Act and hence arouses serious labour disputes which has not been settled, the Commission could veto the enterprise’s another new investment.

4. Investment Vetting by two international human rights covenants

The two covenants are the International Covenant on Civil and. Political Rights and International Covenant on Economic, Social and Cultural Rights, which comprise a number of human rights items, including labour rights, to be protected.  Taiwan signed these two covenants as early as in 1967, and in recent years has implemented the covenants through local legislation.  However, as Taiwan is not a member of the United Nations (UN), it could not be examined in the UN for whether it has delivered the covenants’ responsibility locally.  Thus Taiwan takes reference from the UN’s procedures for examining human rights reports submitted by the signatory countries and invite international human rights experts to Taiwan, together with local social groups, to participate in the examination.

The first three labour cases did not come under the regulations of the two covenants.  When the Nien Hsing case and the Tainan Enterprises case emerged, Taiwan had yet to pass the local legislation for implementing the two covenants.  Although the Foxconn case occurred at a time when the covenants were already implemented through local legislation, the once-in-every-four-years examination of their implementation in Taiwan only started in 2013.  When the examination took place in 2013 and 2017, the Foxconn case was not written in the parallel report of human rights situation submitted by the public social groups because the dispute at that time had already died down.  

The FPG’s Vietnam iron and steel factory case can be reviewed in the 2021 examination on the covenants’ implementation in Taiwan.  Taiwan’s public groups have put forward numerous suggestions regarding the case in their reports, such as requesting the Taiwan court to actively consider how to respond to the fact that enterprises are operating business globally, and urging the Taiwan Government to widely amend regulations about corporate governance, securities and investments so as to make enterprises fulfill human rights responsibilities.  How this case will be concluded in the covenant examination exercise may influence the future court ruling of its litigation involved. 

5. Regulating investments in the public pension fund and in government procurement

Many Western countries have created standards and mechanisms for investments in the public pension fund’s as well as in government procurement to regulate the behaviours of investee companies or suppliers for their compliance with labour rights, environmental protection and other human rights practices.  Taiwan has long been unenthusiastic about such compliance by these two said systems.  This strategy did not appear in the four labour cases for workers’ negotiations with the enterprises.  However, these tools could be very impactful, and there are already relevant measures and systems running in Taiwan.  Examples are as follows.

  • Taiwan has set up Labor Funds, which is composed of labour insurance fund, labour retirement fund and the like.  It is managed by the Bureau of Labor Funds under Taiwan’s Ministry of Labor.  The Bureau has signed on the corporate governance guidelines relating to securities trading, with provisions urging the investee companies to well fulfill corporate social responsibility.  When the Bureau chooses stocks for investment, it will take into account the evaluation of an investee’s corporate governance and its fulfillment in social responsibility
  • In 2015, Taiwan’s Ministry of Labor enacted a set of non-compulsory standards guiding business firms’ corporate social responsibility, which are employed in government procurement.  The standards includes evaluation of an enterprise’s working conditions, which could become a policy tool for promoting labour rights.

However, operation of the above two tools has encountered lots of constraints in Taiwan.  More resistance campaigns and advocacy are needed for improvement of these two tools so that they could become effective means of advancing labour rights.

 

Brief summary

This study report explores the effectiveness of international networking in four labour resistance cases occurring in factories invested by Taiwan-capital enterprises.  All of the four cases adopted the commonly used strategy in their campaigns, namely putting pressure directly on the factory owners, or organising protests at the place where the parent enterprise is situated or protests targeting the enterprise’s upstream and downstream operation.  The Nien Hsing case and the Tainan Enterprises achieved relatively better results with this approach.  The protestors of the former case went straight to the enterprise’s investor conference to reveal the labour dispute to its investors, which caused an acute plunge of the enterprise’s share price and thus brought about massive pressure to it.  For the latter case, workers from the enterprise’s factories invested in different countries joined in supporting the resistance campaign, which finally compelled the enterprise to give in.  This shows that international networking of workers across countries could create the greatest pressure for enterprises.

However, the international networking in the Foxconn case and the FPG’s iron and steel factory in Vietnam did not produce adequate pressure and thus little effectiveness was seen.  This is because the protestors were mainly public groups outside the enterprise, but not its workers.

Litigation is not a commonly used strategy because of its time-consuming nature.  Moreover, when a labour dispute has once entered into legal proceedings, the determinant for victory no longer lies in the organisation power and group networking, but the approaches taken by lawyers and judges, and the resistance campaign efforts will thus become passive.  Among the four cases, only the Nien Hsing case and the FPG’s Vietnam iron and steel factory case employed this strategy, but with bleak results .  Although the former case won the ILO’s ruling that Nicaragua Government had infringed upon workers’ right to free association, such a verdict without binding power is of limited significance.  The latter case is now being stuck in legal proceedings in Taiwan because controversies emerges in the Taiwan judiciary upon whether Taiwan has jurisdiction over the case.

Apart from direct protests and lawsuits, there are other mechanisms and important labour campaign tools which involve the incorporation of corporate social responsibility and human rights obligations into certain systems for enterprises to comply with, such as the Overseas Chinese and Foreign Investment Commission vetting business investments to ensure a concerned enterprise’s compliance with such responsibilities; examination on the fulfillment of such responsibilities laid down in two international human rights covenants; and stipulating the compliance with these responsibilities as criteria for becoming eligible investees of the public pension fund and suppliers of government procurement.