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Disney, NBCUniversal Under Fire for Stiffing Asian Garment Workers

One year after a Thomson Reuters Foundation investigation revealed a widespread underpayment of wages at Thai garment factories supplying to global brands, a group of migrant workers from neighboring Myanmar are still seeking restitution after losing their jobs following the closure of their factory in the western region of Mae Sot.

Legal action has only gone so far. Earlier this month, 26 Burmese workers from the Kanlayanee factory returned to court for the third time to seek compensation for the reported abuse and exploitation they suffered making products for four of the world’s biggest companies—Disney, NBCUniversal, Starbucks and Tesco—which have a combined wealth of more than $500 billion, the Clean Clothes Campaign (CCC) and the Migrant Assistance Programme (MAP) Foundation said Wednesday.

Although the court collectively awarded the workers 3.46 million Thai baht ($114,000) in damages a year ago, factory owner Kanlayanee Ruengrit claimed she could afford to pay only 1 million baht ($32,900) at most, or one-third of the amount. With few other options, labor campaigners said, the workers accepted the offer.

Last week, however, Tesco gave workers 736,000 baht ($24,200), the only company to make an active disbursement so far. Starbucks, meanwhile, has pledged to shell out 600,000 baht ($19,800). Just Disney and NBCUniversal have “yet to agree to pay up and fill the gap,” shirking their responsibility to “make these workers whole,” advocates said.

“We welcome Tesco’s contribution and Starbucks’s commitment to pay and call on Disney and NBCUniversal to follow their lead and take responsibility for the workers in their supply chain,” Ilona Kelly, urgent appeals coordinator for the CCC, the garment industry’s largest consortium of labor unions and nonprofits, said in a statement. “This case exemplifies the urgent need for industry reform so that companies can be held legally accountable for their due-diligence failures. Workers should not be the ones who pay the price. These brands must pay up now to ensure these workers receive the full amount owed to them.”

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Disney and NBCUniversal did not immediately respond to requests for comment.

The CCC and the MAP Foundation said the former Kanlayanee workers have received nothing for over a year, during which time they have faced “extreme hardship,” including blacklisting by nearby factories. Covid-19 has exacerbated their circumstances, with only four of the 26 in any kind of regular employment. The rest have had to rely on loans to survive, sometimes scrounging for food by the roadside because they can’t afford to buy any, they said.

“These workers were exploited while making products and profits for some of the biggest companies in the world,” said Brahm Press, director of the MAP Foundation, a nonprofit that supports migrant workers from Myanmar and their communities. “We’re pleased that Tesco has paid and Starbucks has committed to paying, now action from Disney and NBCUniversal is due. The former Kanlayanee workers deserve justice, they deserve the full amount they are owed and we expect these brands to uphold their responsibility and pay the remaining amount.”

Near the border with Myanmar and 310 miles away from the capital of Bangkok, Mae Sot is home to roughly 430 factories and more than 44,500 workers, most of them migrants looking to make money to remit home to their families. The region has been described as a “black hole” in terms of labor compliance, with many factories operating under the regulatory radar. Based on research and interviews, the MAP Foundation estimates that fewer than a dozen factories there pay the daily minimum wage of 310 baht ($10.22).

“I am sad with what has happened,” Kanlayanee, who faces a fine of up to 20,000 baht ($659) and/or a year in prison if convicted, told Reuters in September. “I am confident I have never taken advantage of [the workers] in a moral sense, but in terms of the law I admit that I was wrong. Most factories in Mae Sot are in the same situation…only the large factories can afford to [pay the minimum wage].”