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Twin Reports: Haiti’s Labor Practice Most Exploitive in the World

Ever since Bangladesh drew international scrutiny for its woeful factory safety and labor conditions, there has been a global search for viable sourcing alternatives to it. Haiti has been benefiting from those roving eyes, garnering attention from major Western retailers like H&M and Uniqlo. However, two new reports issued this month, highlighting the nation’s own struggles to meet the demands of social compliance, undercut the hypothesis that it can serve as an ethically responsible substitute to other politically risky, developing nations.

One study, issued by the “Workers’ Rights Consortium,” (WRC) paints a  sullen picture of the exploitation of labor that has apparently become all too routine. Even the title of the report is a powerful indictment: “Stealing from the Poor: Wage Theft in the Haitian Apparel Industry,’ issued on October 15.

The report begins thunderously, condemning the Haitian apparel industry for taking further advantage of workers already compensated at the lowest rates in the world.

“Haiti is the poorest country in the Western Hemisphere. Its expanding garment industry pays wages to workers that are among the lowest in any of the world’s leading apparel-exporting nations. Yet despite benefiting from rock-bottom labor costs ‒ as well as trade preferences under the HOPE II program ‒ garment factory owners in Haiti routinely, and illegally, cheat workers of substantial portions of their pay, depriving them of any chance to free their families from lives of grueling poverty and frequent hunger.”

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And Haiti is proven stubbornly resistant to reform, despite massive infusions of humanitarian aid and highly trumpeted programs designed to usher in better practices as well as a new system of checks and balances. According to the report, the activity of these programs have had a negligible effect, accomplishing little more than to preside over worsening conditions:

“Despite the presence in Haiti, since 2009, of a factory monitoring program operated by International Labor Organization (ILO) and the International Finance Corporation (IFC), and funded by both the U.S. and Canadian governments and major brands and retailers, themselves, the extent of wage theft in the country’s garment industry has only increased over the past few years. Earlier this year, this ILO-IFC monitoring program, termed “Better Work Haiti,” reported that every single one of the country’s 24 export garment factories was illegally cheating workers of pay by failing to comply with the country’s legal minimum wage.”

But not all the blame is left at the feet of the Haitian government or active NGO’s. The study brazenly lists Western retailers it considers “tacitly complicit in the theft of wages,” largely responsible by dint of practiced neglect.The report accuses these companies of turning a blind eye to conspicuous abuse for the sake of securing cheap labor. Listed among the worst offenders are Gap, Gildan, Hanes, Kohl’s, Levi’s, Russell, Target, VF and Walmart.

The extent of the labor violations is allegedly vast. The WRC claims that a majority of workers are being arbitrarily denied as much as a third of their wages. On the basis of interviews conducted with workers in Port-au-Prince, where over 90 percent of all garment factories are located, workers make an average 32 percent below the government mandated minimum wage.

Factory owners generally have recourse to three techniques to artificially deflate wages with legal impunity. First, they can either raise “piece rates” so low (the number of actual production processes completed) or production quotas so high (how many garment pieces they have to sow in a work day) that workers consistently fail to reach the conditions that must maintain for the minimum wage to take effect.

Also, owners compel workers to perform significant amount of overtime “off the clock,” either paying them far less than their normal wages or not at all.

Finally, the owners simply bully the workers into accepting wages below the minimum wage for fear of losing their jobs. The workers lack any effective organization, and a combination of governmental incompetence and corruption has precluded any reliable oversight.

And the WRC report isn’t the only one that exposed systemic labor exploitation in Haiti. Jointly published by the International Labor Organization and the International Finance Corporation, a bi-annual review of Haitian corporations the number of factories in violation of existing compliance regulation is on the rise. It also found that only 25 percent of workers were being paid a legal wage for full-time work.

Some industry experts believe Haiti has the potential, however currently uncultivated, to become a major destination for textile and apparel manufacturing. In 2012, Haitian apparel exports to the US totaled 270 million square meter equivalents (SME).  In terms of value, Haiti exported $730 million in apparel goods to the US, up 4 percent from last year’s $701 million and up 42 percent from 2009’s $513 million.

Still these two new reports make it clear that Haiti’s hurdles to respectability are high and many. Last March, McKinsey & Company issued a study assessing alternatives to Bangladesh and China and, on the basis of its current level of sophistication, said that any prediction Haiti would soon become a major player is borne of “desperation and hope” rather than sober calculation.