Global Policy Forum

By Leslie Kaufman and David Gonzalez

Six years ago, Abigail Martí­nez earned 55 cents an hour sewing cotton tops and khaki pants. Back then, she says, workers were made to spend 18-hour days in an unventilated factory with undrinkable water. Employees who displeased the bosses were denied bathroom breaks or occasionally made to sweep outside all morning in the broiling sun. Today, she and other workers have coffee breaks and lunch on an outdoor terrace cafeteria. Bathrooms are unlocked, the factory is breezy and clean, and employees can complain to a board of independent monitors if they feel abused.

The changes are the result of efforts by Gap, the big clothing chain, to improve working conditions at this independent factory, one of many that supply its clothes. Yet Ms. Martí­nez today earns 60 cents an hour, only 5 cents more an hour than six years ago.

In some ways, the factory, called Charter, shows what Western companies can do to discourage abuse by suppliers. But Gap's experience also demonstrates the limits to good intentions when first-world appetites collide with third-world realities. Ms. Martí­nez's hours are still long, production quotas are high, and her earnings are still not enough to live on. She shares a two- room concrete home with a sister, two brothers, her parents and a grandmother.

Yet the real alternative in this impoverished nation is no work. And government officials won't raise the minimum wage or even enforce labor laws too rigorously for fear that employers would simply move many jobs to another poor country.

The lesson from Gap's experience in El Salvador is that competing interests among factory owners, government officials, American managers and middle-class consumers — all with their eyes on the lowest possible cost — make it difficult to achieve even basic standards, and even harder to maintain them.

"Some have suggested that there are simple or magic solutions to ensure that labor standards are applied globally," said Aron Cramer, director of human rights at Business for Social Responsibility, a nonprofit advocacy group that receives support from business. "In fact, it takes a great deal of work."

Fed up with abusive conditions, Ms. Martí­nez and a small group of other workers organized and began to hold strikes at the factory, then called Mandarin International, in 1995. As tension rose, workers took over the factory and shut down power to the plant. Security guards forcibly ejected strikers; union members said the guards dragged women out by their hair and clubbed them with guns. The factory's owners fired hundreds, including Ms. Martí­nez.

It might have ended that way, except that it occurred just as concern about sweatshops was rising in the United States. Groups like the National Labor Committee, a union-backed, workers advocacy group based in New York, had formed to oppose sweatshops. Mandarin offered a media- ready case of abuse, and the revolt was widely publicized.

Still, two of the four retailers using Mandarin left after the protests — J. C. Penney and Dayton Hudson (now Target). Eddie Bauer, a unit of Spiegel Inc., suspended its contract. Gap Inc., which is based in San Francisco, intended to quit, too, but a group of Mandarin workers pleaded with the company to save their jobs. Some blamed union organizers for the trouble. "Problems were made to look worse by the union," said one employee, Lucí­a Alvarado, who has worked at the factory for eight years.

Gap executives chose to stay after deciding that all the groups involved — workers, labor activists and factory owners — were willing to make changes. The workers were expected to stop disrupting the plant, and managers had to agree to more humane practices and to accept outside monitors.

To make sure the changes stuck and to arbitrate disputes, Gap decided to try the then innovative idea of hiring local union, religious and academic leaders as independent monitors who would meet regularly with workers to hear complaints, investigate problems and look over the books.

"It's not a paradise," said Carolina Quinteros, co-director of the Independent Monitoring Group of El Salvador, as the monitors call themselves. "But at least it works better than others down here. They don't have labor or human rights violations."

The push for change ranges far beyond the Charter factory, or El Salvador. Today, activists on college campuses are calling for an end to sweatshops everywhere. [As recently as this past weekend in Quebec, world trade officials debated how to clean up those operations, and the United States has pushed developing countries to raise pay and working conditions in thousands of plants from Bangladesh to Brazil.]

Results, however, have been negligible. The basic problem is that jobs and capital can move fast these days, as the president of El Salvador, Francisco Flores, is keenly aware. "The difficulty in this region is that there is labor that is more competitively priced than El Salvador," he said.

Here, as in many other countries, labor advocates say the problem is made worse by the government's cozy ties with factory owners. When a Labor Ministry committee issued a report critical of forced overtime, poor safety and threats against labor organizers, factory owners complained. The government swiftly withdrew and disowned it.

Salvadoran officials and business leaders have also objected to monitors Gap has hired to police working conditions. They contend that the group is a tool of unions that want to keep jobs from leaving the United States — or a leftist anti-government front, a suspicion left over from El Salvador's long civil war, which ended in 1992.

Then there is practicality. Gap spends $10,000 a year for the independent monitors at Charter, which is owned by Taiwanese investors, and thousands more for management time to arbitrate disputes and for its own company monitors to recheck the facts on the ground. For the company to duplicate these intensive efforts at each of the 4,000 independent factories it contracts with would have taken about 4.5 percent of its annual profit of $877 million last year.

In a world where costs are measured in pennies, that percentage would be a significant burden. Wal-Mart and Kmart are praised by investors for relentlessly driving down costs, but they have much less comprehensive monitoring programs.

Gap says that expense and staff time are not even its main concerns. The experiment in El Salvador has only reinforced the company's conviction that companies cannot substitute for governments indifferent to enforcing laws. Also, it said, retailers have limited power over their independent contractors. Either they pull out, which would punish innocent workers, or they must accede to a slow process where they must cajole and bully for every bit of progress.

"We are not the all-powerful Oz that rules over what happens in every factory," said Elliot Schrage, Gap's senior vice president for global affairs. "Do we have leverage? Yes. Is it as great as our critics believe? Not by a long shot."

Sitting Down: Monitoring Effort Enlists Outsiders

Still, monitoring is the sweatshop opponents' great hope. Watchdog groups say that only people outside of the company can win the trust of workers and evaluate complaints. "That is where you get problems that won't show up in paper records and interviews with management," said Sam Brown, executive director of the Fair Labor Association, a labor advocacy group in Washington.

At the time, however, no one had ever done it, said Mr. Brown, who is a former Ambassador to the Organization for Security and Cooperation in Europe and past director of Action, federal domestic volunteer agency.

Gap's efforts are still in many ways a blueprint for the international labor advocacy movement — since 1995 other companies like Liz Claiborne and Reebok have attempted to start similar programs. But what has actually happened in El Salvador is a process that lasted longer, cost more and achieved less than what many people had hoped for. "We knew it would be hard," Mr. Schrage said. "But it's been harder than we ever imagined."

The company has found that no aspect of its efforts escapes local politics. On the recommendation of Charles Kernaghan, the director of the National Labor Council, Gap turned to the legal aid office of the Archdiocese of San Salvador and to the Jesuit University here. Earlier, both institutions had helped uncover abuses in the plant, which to Gap demonstrated their experience and independence from management. But both also had a history of sympathy for the Farabundo Martí­ National Liberation Front, a coalition of rebel groups and political parties during the civil war. The coalition is known as the F.M.L.N., its initials in Spanish.

"When companies see me, they see someone to the left of the F.M.L.N.," said Benjamí­n Cuéllar, the director of the Institute for Human Rights at the University of Central America here who is also on the board of independent monitors. That view manifests itself in mistrust and resistance by managers, he said.

Beyond politics, Gap says it is not easy to impose its will on contractors simply because it is a major customer. Pedro Mancí­a, the factory's manager, indicated that he looks on the monitors as an annoyance, not a threat. In his view, the only meaningful role they played was in easing tensions among the workers themselves after the 1995 strike. That event "was not between management and workers," Mr. Mancí­a argued. "We had two warring factions of unions and they could not sit down together."

Factory managers agreed to accept monitors mostly to avoid losing Gap and going out of business. Still, trust is tenuous and the managers have found ways — subtle and not so subtle — to resist, monitors say.

It took about a year to rehire all of the workers fired during the 1995 strike, for example. And 30 of those rehired in 1997 were fired again recently, not because they were strikers but because the company said they were not productive enough. "They are playing by the rules of the game," said one member of the monitoring group. "But I'm not much in agreement with the rules of the game."

Gap says that this project has taught it the limit of its own influence. "We can't be the whole solution," Mr. Schrage said. "The solution has to be labor laws that are adequate, respected and enforced. One of the problems in El Salvador is that that was not happening and is not happening."

Moving On: Economic Obstacles Impede Reforms

Before dawn each day, Flor de Marí­a Hernández leaves her three children in the tent where they have lived since an earthquake leveled her home earlier this year and begins her two-hour commute to the Charter clothing factory. She and the others, like Ms. Martí­nez, must be at work before 7 a.m. Managers close the gate precisely on the hour and dock the pay of anyone who is late.

Inside, rows of sewing machines face blackboards on which supervisors have written the daily quotas for shirts and trousers, roughly 2,000 a day for each line of 36 machines. The pace is relentless, but by local standards it is a pleasant place to work. There are lockers, tiled bathrooms, a medical clinic and an outdoor cafeteria. Large fans and high ceilings keep temperatures down.

But Ms. Martí­nez remembers just what it took to get this far. She was among the workers who protested the abusive conditions in 1995. "Workers would bring in permission slips from their doctors to go to the hospital," she recalled, "and supervisors would rip it up in their faces."

Of the 70,000 garment workers in El Salvador, 80 percent are women. Few earn enough to take care of their families. Ms. Hernández, for example, earns about $30 a week inspecting clothes. It is not enough to feed her children; to make ends meet, she relies on help from her ex-husband. She keeps her job because the most common alternative is to work as a live-in maid or a street vendor. Jobs cutting sugar cane in the searing sun, once plentiful, are difficult to find now, and wages have fallen in recent years along with commodity prices.

El Salvador, never a wealthy country, is struggling every bit as hard as its people. Roughly 75,000 people were killed and thousands wounded in the civil war. The war also drove away foreign investment, shuttered relatively high-paying electronics factories and left roads, power lines and other basic services in tatters.

Earlier this year, two powerful earthquakes compounded the difficulties by wrecking hundreds of thousands of buildings. Economists estimate that 180,000 Salvadorans are jobless. Almost half of the population lives in poverty.

The government has gone out of its way to attract investment and jobs. Government leaders pin the country's future on the optimistic hope of doubling the number of factories making clothes for the United States, to more than 400, in three years. "Maquilas have been a source of significant economic growth in recent years," President Flores said using the Spanish term for the plants that enjoy tax and trade benefits. "They are the most dynamic economic sector in the country."

That growth, however, has not been matched by the budget of the Labor Ministry, which is among the worst-financed agencies. It employs only 37 labor inspectors to enforce regulations — 1 for every 10 factories, not including coffee plantations, construction sites or other places of business in this country, which has 6.1 million people.

The limits of the government's willingness to be an advocate for labor was illustrated last summer when it suppressed the report critical of factory working conditions. The labor minister, Jorge Nieto, said that the report was technically flawed, and insists that the government intends to modernize his agency and improve inspector training. "We want investment, but only with respect and fairness," he said. "Only when workers' rights are respected can we generate more contracts with American companies."

But to get those contracts, El Salvador must compete with neighbors like Honduras and Nicaragua, where wages are lower and the population even poorer and more eager for work. Government officials and factory managers concede that El Salvador's current minimum wage is not enough to live on — by some estimates it covers less than half of the basic needs of a family of four — but they are wary of increasing it. "We cannot be satisfied with the wage, but we have to acknowledge the economic realities," Mr. Nieto said.

Since Gap pioneered the independent monitoring effort, few other American companies have followed. They cite costs, politics and questionable effectiveness. Gap executives echo those worries when they assess the experience at Charter. "We are in a very competitive marketplace," said Mr. Schrage of Gap. "Consumers make decisions on lots of factors, including price. There is no clear benefit in having invested in independent monitoring to a consumer and it is not clear if we were to make it more broad policy that consumers would get a benefit or care at all."

As she shopped at the Gap flagship store at Herald Square in Manhattan, Claire Cosslett fingered an aqua cotton T-shirt made in El Salvador to check for quality. Ms. Cosslett, a legal recruiter, said she reads labels and sometimes worries that her garments are "made by some child chained to a sewing machine."

American companies dread comments like that. Yet for all their fears, they ultimately have to balance their concern over image, and any feelings they have about third-world workers, with customers' attitudes. Then there are the competitive pressures to keep costs low. Would the cost of raising working standards in El Salvador raise the price of a T-shirt enough to drive off customers?

Among several shoppers who were interviewed at the Manhattan store, Ms. Cosslett was the only one to say that reports of sweatshop conditions had stopped her from buying a particular brand. She said she would be willing to pay more for a garment made under better working conditions. But then she paused and hedged. "It would depend how much," she said.

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