Guatemala: maquila stole $6 million from workers

Over the course of 12 years management at the Alianza Fashion apparel factory in the central Guatemalan department of Chimaltenango cheated employees out of some $6 million dollars in back wages and benefits, according to a report released Jan. 23 by Pittsburgh-based Institute for Global Labor and Human Rights (IGLHR, formerly the National Labor Committee). The maquiladora—a tax-exempt assembly plant producing for export—stitched items like suits and jackets for at least 60 US retailers, including Macy's, JCPenney, Kohl's and Wal-Mart. The owner, South Korean national Boon Chong Park, shut the factory down in March 2013.

The report is based on more than 200 documents–including pay stubs, invoices and manufacturing specifications—that were smuggled out of the plant last spring. According to the IGLHR, the documents show that while the plant usually employed from 1,050 to 1,500 workers, the company only made the legally required contributions for pensions and healthcare for 65 workers from 2001 to 2013. The total lost benefits came to more than $4.7 million. When Alianza closed down, the company failed to pay the 548 workers still employed there the $1.2 million it owed them in back wages and benefits. Base pay at the plant was $1.05 an hour, about the same as the minimum wage for the maquiladora sector in 2013, 65.63 quetzales (US$8.36) a day. In 2010 the company fired 60 workers without severance pay after they formed an independent union and registered it with the government.

The North American companies that had their goods produced at Alianza have tried to play down their connection to the plant; spokespeople said the companies hadn't placed orders recently, or they insisted that the orders were placed through third parties. The Phillips-Van Heusen company has donated $100,000 to a fund for the 548 workers left out of work when the plant closed, but as of Jan. 23 other North American companies had failed to respond to requests that they make similar contributions. (Prensa Libre, Guatemala, Dec. 26; ABC News, Jan. 23; The Nation, Dec. 23; Univision, Jan. 24)

Shortly after the company closed last March, some 800 of the former workers occupied the plant to demand payment of back wages, apparently without success. They also complained that they had been underpaid during the year leading up to the closure, and that managers routinely subjected them to racist insults. (Prensa Libre, April 1, 2013)

From Weekly News Update on the Americas, January 26.