The September 1997 report by two Hong Kong research groups--the Asia Monitor Resource Centre and the Hong Kong Christian Industrial Committee--examined working conditions in four major Chinese factories producing shoes for Nike and Reebok. Through a detailed survey of workers in those factories in the Pearl River Delta, we found that the shoe factories consistently violate Chinese Labor Laws regulating issues such as wages, overtime and child labour. We also found that the Codes of Conduct that Nike and Reebok have formulated to regulate their practices overseas are being violated in such a flagrant fashion as to make those Codes virtually meaningless. This report reveals that both the internal and external monitoring systems set up by Nike and Reebok to ensure compliance with their Codes have been completely ineffective.

The following are some examples:

• Factories producing for Nike and Reebok consistently violate minimum wage laws. The daily legal minimum wage in Dongguan Province in China is US$1.90 a day (16 Rmb for eight hours), but workers at one factory, Nority, are paid only US$1.20-$1.45 (10-12 Rmb). At the Wellco factory, the legal minimum monthly wage is US$42.17 (350 Rmb), but the workers receive US$30-$42 (250-350 Rmb).

• Factories violate local laws for payment of overtime. The legal minimum for overtime pay is US$0.36 an hour in Dongguan or 1.5 times the legal minimum wage (2.99 Rmb), but workers receive as little as US$0.27 (2.20 Rmb).

• Workers are treated as though they are in a prison labour camp. They complain of beatings by security guards. They are forced to do daily rounds of early-morning calisthenics, and are fined if they miss them. Talking during work is not allowed, with fines from US$1.20-$3.60 (10-30 Rmb) imposed on those who break the rule. Deducting disciplinary fines from wages is illegal in China.

• Workers are not allowed to organize independent unions; the only legal union is the one that is government-controlled. Wildcat strikes are common, but workers often lose out. At one factory in March 1997, the entire assembly production department went on strike over non-payment of wages. All the striking workers were fired.

• Children ages 13-15 are employed in the sewing, handwork and cutting department at the Wellco factory, which produces for Nike. The use of child labour is a clear violation of China's Labor Law and Nike's Codes of Conduct.

• While China's Labour Law calls for a 44-hour work week and the two companies have agreed to abide by that, a "normal" work schedule for Nike and Reebok shoe workers in China is actually 11-12 hours a day, six days a week, or 72 hours a week.

• On top of the regular work day (11-12 hours), workers are often required to work an additional 2-5 hours of overtime. Workers who refuse overtime can be docked an entire day's pay or even fired. This system of compulsory overtime is a gross violation of Chinese law and both companies' Codes of Conduct.

• Most workers only get 2-4 days off a month, and work seven days a week during peak season. The companies' Codes state that workers are entitled to at least one day of rest every week, and China's Labor Law calls for weekends off. If workers must work on weekends the law requires they be paid overtime. Our research found that they are not.

• Many workers are given very high quotas to fulfill which often cannot be finished in a regular day's work. If the quota is not met, the workers must stay behind and work without pay.

• Childcare, social security benefits, medical insurance and bereavement leave are benefits stipulated under Chinese Labor Law, but the shoe companies provide none of them.

• Workers complained of crowded dorms, where oftentimes 12 people live in one room and must share one bath.

• Due to poor safety conditions, workers lose fingers and even hands in the machines. There is serious dust and noise pollution, excessive heat, dangerous fumes and congestion that leave workers complaining of dizziness, skin irritations, headaches and dyspnea (difficult and painful breathing).These conditions breach the companies' pledges to guarantee a "safe and healthy working environment to prevent accidents and injury to health."

• In violation of Chinese law, managers force workers to pay one month's deposit when they are hired. To reclaim the deposit, workers must wait one year or until they leave the factory under "favorable circumstances."

• China's Labor Law grants pregnant workers maternity leave. At the shoe plants, however, pregnant workers are fired or their contacts are simply not renewed. Workers are also fired for being "too old," i.e. over 25.

• While the companies assure the public that their Codes of Conduct are translated into local languages and placed in common areas throughout the factories, this is not true. Overwhelmingly, Nike and Reebok workers are unaware of the existence of such Codes.

• The companies' Codes says that workers should have the right to freedom of association. But independent union organizing is crushed and the one legal union, the All China Federation of Trade Unions, is controlled by the factory owners.

  Finally, the companies' Codes state that employees should be treated with "respect and dignity". Unfortunately, these words are hollow for the Chinese work force making shoes for Nike and Reebok. According to workers interviewed for this report, management is not interested in their welfare, but only in "churning out more and more shoes." The conditions under which workers are forced to work reflect those priorities.