By and  on December 21, 2000

NEW YORK -- Charles Kernaghan, executive director of the National Labor Committee for Human Rights, has made a list and said Nike, Kohl's and Wal-Mart were among the naughty.

Kernaghan is expected to hand out the NLC's first "Golden Grinch" awards this morning at the Millennium Hotel in Manhattan, where the labor activist will spell out charges that those companies are responsible for sweatshop abuses and mistreatment of workers in foreign factories.

The aim is to make holiday shoppers think twice before they hit the stores Friday and Saturday, which should be among the busiest shopping days of the year, Kernaghan said.

No stranger to controversy, Kernaghan set off a national crossfire in 1996 by exposing Wal-Mart's use of sweatshops for its Kathie Lee Gifford Collection apparel line. This time around, the activist told WWD he is lashing out at Nike, this year's grand prize winner and the recipient of the Golden Grinch award for "gouging workers and consumers."

Kernaghan said Wednesday that he followed garbage trucks outside a contracted factory that produces Nike goods in the Dominican Republic, rummaged its trash in a Free Trade Zone and uncovered internal documents that break down the 22-step production process for Nike children's sweatshirts.

According to the documents, it takes a Dominican factory worker 6.6 minutes to produce, inspect and package the sweatshirts, which retail for $23, he said. Each worker earns about 8 cents per garment, Kernaghan said.

"If Nike wants to debate it, we'll debate it," he said.

Vada Manager, director of global issues management at Nike, said Kernaghan doesn't always get his facts straight.

As it has said in the past, Nike, is always willing to speak with Kernaghan about any charges of underpaid workers, make changes if necessary and terminate contractors when violations are proven, Manager said.

"Clearly, he's not in the business and he doesn't understand the relationship between costs of material, labor and production," Manager said.

Kernaghan will also blast Nike for charging $135 for men's sneakers that cost $14.61 per pair to make in factories in China.

Kohl's earns the Golden Grinch award for "hypocrisy."The NLC and other activists have staged at least 75 demonstrations at various Kohl's stores in recent months for the retailer's use of the Centex factory in Nicaragua, which fired workers after they requested an 8 cent raise.

Kernaghan said the chain has been ineffective in enforcing its code of conduct and its corporate vow to respect workers worldwide. Kohl's, which does not own any factories, has failed to intervene in the Centex labor issue, he said. The retailer considers it to be a third-party labor issue, Kernaghan added.

Informed of Kohl's award Wednesday, Susan Henderson, the chain's vice president of public relations, took issue with the NLC's charges. She said Kohl's continues to follow its code of conduct, and immediately investigates, when problems arise.

For example, after the Centex factory in Nicaragua came under fire, a third-party group was sent to investigate the allegations, random factory workers were interviewed, safety conditions were improved and other problems were corrected, and workers were paid more than the required rate under law.

In addition, Kohl's code of conduct was spelled out to Centex management as a mandate for doing business, Henderson said. The third party also made follow-up visits to Centex and noted improvements, she added.

"We conduct an annual inspection of the factories, which produce our private label brand," she said, stressing the attention the company pays to such issues.

Henderson also said that since Kohl's does not own their own factories she does not believe it is the company's role to get involved in third party labor disputes.

Wal-Mart will get the Golden Grinch award for "driving the race to the bottom and lowering standards all around the world and lying about it," the NLC leader said. The retail giant allegedly subjected Chun Si factory workers in China making Kathie Lee signature handbags to "abysmal conditions," Kernaghan said.

Wal-Mart is also being criticized by Kernaghan for relocating and importing from Myanmar, formerly Burma. The Clinton administration issued an executive order in 1997 blocking investments in the country, but not banning production.

A Wal-Mart spokeswoman said, "More often times than not, we find that [the NLC] claims are not only unsupported, but inaccurate. Wal-Mart has invested a lot of time and money to help insure that we do not do business with factories being run illegally and unethically."She said the company conducts "200 investigations a week" of the factories that Wal-Mart does business with to assure laws are followed.

Next on Kernaghan's list is the Army and the Air Force Exchange Service, which earned the Golden Grinch award for "defense of sweatshop conditions and starvation wages." The Pentagon's buying agency used Nicaraguan factories to produce jeans even after hundreds of workers were fired for requesting a slight wage increase, Kernaghan said. After those layoffs, the AAFES produced 64 tons of jeans from July through September, he added.

The Pentagon's buying agency will also be charged for its production in what used to be Burma. Kernaghan has already revealed shipping documents that show how the Pentagon's buying agency bought more than $14,000 worth of apparel from Rangoon, Myanmar. In total, the Army and Air Force Exchange Service reportedly imported $138,290 worth of clothing from Myanmar.

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