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Report Alleges Wal-Mart Supplier Factory Abuse

A Hong Kong labor-rights group is calling for Wal-Mart Stores Inc. to investigate Elec-Tech International Co.

BEIJING — A Hong Kong labor-rights group is calling for U.S. retail giant Wal-Mart Stores Inc. to investigate Elec-Tech International Co., a home electronics supplier in China, following a rash of lost limbs and other severe workplace injuries that workers say were caused by unsafe equipment and no training.

In a report slated for release this week, the labor-rights group Students and Scholars Against Corporate Misbehavior investigated a string of severed limbs and digits at the Zhuhai-based production center of Elec-Tech, a company that makes electronics, including small home appliances like toasters, coffee makers and electric skillets.

On Tuesday, a Wal-Mart spokesman said, “As soon as we learned of these allegations, we immediately launched an investigation of the factory referenced in the report. We take reports like this very seriously and we will take prompt remedial action if our investigations confirm any of the findings, including checking that factory employees had access to information posters describing how they can anonymously contact a local-language hotline to report any violations of Wal-Mart standards. We remain committed to sourcing merchandise that is produced responsibly by suppliers that adhere to Wal-Mart’s rigorous Standards for Suppliers code of conduct.”

The release of the report comes as Western companies place growing pressure on Chinese factories to improve their safety and environmental records. Meanwhile, workers are demanding higher wages and better living conditions, eager to buy the goods they make in the factories where they work. The higher wages are leading to increased costs, with brands now diversifying their sourcing to countries beyond China including Bangladesh, India, Vietnam and Pakistan.

In its report, the labor group charges the Wal-Mart supplier’s safety record is skewed and it has acted in violation of Chinese workplace standards. The report, unsubtly named “Wal-Mart’s Supplier Produces Severed Fingers and Hands,” opens with a stark photo of five young factory workers missing parts of hands, forearms and fingers.

“The amputations are not merely accidents but man-made tragedies which can be prevented,” the group said. “Within six months, from January to June 2010, 22 workers at Elec-Tech’s Zhuhai production facilities have gone through the disability assessment due to industrial injuries.

“We can hardly imagine how many fingers, hands and arms were cut by the machines over the years at Elec-Tech,” it said.

Many of the injuries this year occurred in the plastic molding department, the group said, where workers deal with what they call “the hand-eating machines.”

As with most Chinese factories, the workforce at Elec-Tech — which typically does not make its own designs but produces exports to order — is made up of young migrant workers from poorer farming provinces who strike out to China’s southern manufacturing hubs for relatively well-paid work and a chance at a better life.

“…It is heartbreaking to observe that many victims try to hide their hands, especially in the public,” said SACOM. “They either put their hands in their pockets of trousers, or wear long-sleeve shirts.”

Even though the company pays legal compensation to injured workers, it has not upgraded equipment or gone beyond the bare minimum to help those who lose limbs on the line, the group charged. SACOM targeted Wal-Mart for action in part because the American retail giant has pledged to be a leader in corporate social responsibility in China.

A worker who answered the phone at Elec-Tech’s Zhuhai marketing office responded to a query about the report by answering, “Why don’t you call Foxconn?” The woman, who refused to give her name, was referring to the troubled electronics supplier in Shenzhen that has faced global scrutiny over a string of employee suicides this year. Elec-Tech’s other offices could not be reached for comment on the report.

In a widely trumpeted initiative unveiled in October 2008, Wal-Mart outlined a series of aggressive measures to promote corporate social responsibility and environmental responsibility among its Chinese suppliers.

“I firmly believe that a company that cheats on overtime and on the age of its labor, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honor its contracts will ultimately cheat on the quality of its products,” Lee Scott, then-president and chief executive of Wal-Mart Stores Inc., said at the time. “And cheating on the quality of products is the same as cheating on customers. We will not tolerate that at Wal-Mart.”

A 22-year-old Elec-Tech factory worker from Hunan province, who requested anonymity for fear of repercussions, said in a telephone interview that he had just one day of very basic job training before going to work in the molding center last summer. Less than a month later, he lost his left hand. He was given the equivalent of $17,600 in compensation, and little else.

The worker, who said he received little support from others at the factory, eventually returned to his hometown and is unsure what he’ll do next. In the near-term, he and others are planning to stage a performance art event in southern China to show off their injuries and missing limbs.