During the week of July 4, 2016, the FLA conducted a comprehensive assessment of working conditions at the factory complex Hansae Vietnam Co. Ltd, located in Ho Chi Minh City. The factories in the Hansae complex produce a range of apparel products for the international market. At the time of the assessment, Hansae employed approximately 9,000 workers in 12 manufacturing factories or workshops. Nike, a Participating Company of the FLA, is among Hansae’s buyers.
The assessment was conducted in response to a Third Party Complaint filed with the FLA on June 2, 2016, by the University of Washington raising allegations of violations of worker rights and poor working conditions at Hansae, including those identified in a report issued by the Worker Rights Consortium (WRC) in May 2016.
Earlier in 2016, in response to a Third Party Complaint filed by Cornell University, the FLA had commissioned an independent investigation at Hansae’s Factory #5 regarding the payment of productivity bonuses and other labor issues that resulted in a strike. That investigation, carried out by a local, accredited third-party assessor, found several issues at the factory related to communication around productivity bonuses as well as very high production quotas, ineffective grievance procedures, and restrictions on workers exiting the factory during lunch periods. Hansae, in collaboration with Nike, developed a remediation plan to address these issues.
In addition to the July 2016 assessment, on October 13-14, 2016, at the request of the University of Washington, an FLA team returned to Hansae accompanied by a team from the WRC to conduct a joint visit. During this visit, the FLA team ascertained the extent to which remediation had progressed on actions requiring immediate attention after the July 2016 SCI assessment. The WRC team identified a number of findings of noncompliance in the area of safety and health that the FLA has added to the initial SCI assessment findings.
The SCI assessment and the joint FLA-WRC visit to Hansae found a range of violations of domestic labor law and of all nine elements of the FLA Workplace Code of Conduct. Hansae, with guidance from Nike, has developed a comprehensive remediation plan to address the many issues described in the SCI report.
The goal of a comprehensive, systems- focused assessment like the FLA’s Sustainable Compliance Initiative (SCI) is to address root causes of chronic issues within a factory, and devise lasting, sustainable improvements. For this process to be a success, each actor along the supply chain must share the goal of improving conditions for workers, and must take responsibility for taking steps to meet that goal.
It is Hansae’s responsibility to implement each of the improvements committed to in the remediation plan, and it is Nike’s responsibility to monitor the implementation of the remediation plan and ensure that Hansae meets the labor standards required by the FLA Workplace Code of Conduct. In addition, as an FLA affiliate, Nike agrees to transparently report on progress at Hansae, by providing regular updates to the FLA, until each element of the remediation plan has been completed. These updates will appear in the SCI assessment report posted in the “Workplace Monitoring” section of the FLA website.
UPDATE, February 21: This third party complaint has been resolved, with the final report appearing below.