Saipan: Is This USA??Gap’s Labor Problems

Dimas Renaldi G.

Dini Prayita

Reguler 23

GAP’S HISTORY

Founded in 1969 by Donald Fisher and Doris Fisher, a small clothing store near San Francisco State University

By 1971, Fisher operating six Gap stores In 1983, Millard Drexler taking over as the new

president of the Gap while Fisher became Chief Executive Officer

In 1995, Fisher retired as CEO and Drexler took over as CEO, which by then had 1,348 stores

September 2002, Drexler retired and replaced by Pressler, the company operated over 4,000 stores

GAP’S COMPANY PROFILE

Gap, Inc. Is a chain of retail stores, including : Gap Banana Republic Old Navy Gap International GapKids BabyGap

In January 2004 Gap reported fiscal year profits of $1.03 billion on sales of $15.85 billion

Almost all Gap Merchandise is made under contract for Gap by some 3,000 supplier factories that owned and operated by foreigners in 50 countries

GAP’S LABOR PROBLEMS IN SAIPAN

Since 1995 Gap had faced labor problems in the factories that supplied its clothes

In 1999, Global Exchange, Sweatshop Watch, and the AFL-CIO Union of Needletrades Industrial and Textile Employees filed a class action lawsuit against Gap ad 17 other retailers on 50,000 workers in factories in Saipan

Saipan is the largest of 14 island that together make up the Commontwealth of the Northen Mariana Island (CNMI).

In 1975, the CNMI became a U.S. Territory and its 15,000 inhabitants became U.S. citizens

GAP’S LABOR PROBLEMS IN SAIPAN

In 1996, the population of CNMI exploded to 70,000. over half were foreign workers on temporary visas who had migrated to Saipan to work in one of the many factories that foreign companies had built on Saipan to make clothes and other products for U.S. Companies

The garments and other products that made in Saipan could be advertised as being “Made in the USA”

GAP’S LABOR PROBLEMS IN SAIPAN

Workers condition in the Saipan’s factory : Mostly Women, were recruited by private agencies

in China, Bangladesh, Korea Paid $3 an hour Workers had to sign contracts promising to pay the

recruiting agency an average “fee” of $5,000 that would be deducted from their weekly paychecks

Promising not to participate in political or religious activities, not to marry, not to ask salary increases, not to look for alternative employment, not to participate in any union activity

GAP’S LABOR PROBLEMS IN SAIPAN

Some violation conditions of U.S. Labor laws in Saipan : Workes should pay $200 per month for poor

food and housing in factory-owned shantylike barracks that were dirty, lacked clean drinking water and hot water, had exposed electrical wiring, and had filthy and inoperable toilets.

Violating U.S health and safety laws : Blocked exits, fire hazards, unsanitary restroom, and exposed electrical wiring

GAP’S LABOR PROBLEMS IN SAIPAN

GAP inc factories violation in Human Rights:

– “off the Clock” hours,– not paid when overtime,– unsaved work condition,– exorbitant  job-recruitment fees,– illegal threats of deportation and,– rules prohibiting  having children or

marrying.

GAP RESPONSE OF LABOR CASE IN SAIPAN:

In 2001, GAP implemented guidelines to better protect foreign contract workers in the approximately five percent of Gap Inc approved factories that employ them worldwide.

employment contracts be written in the workers' native languages and that workers must be paid at least the local minimum wage.

Factory management must allow workers to control their own travel documents and wages.

Workers must be free to leave the factory and return home at any time. management must agree to assume a proportionate amount of the

returning workers' debt. GAP Inc vendor Compliance Officers (VCOs) regularly monitor

compliance with these standards in garment factories that employ foreign contract workers.

GAP agreed to contribute a certain amount to a fund of $20 million to be used to compensate workers and to pay an independent third parties.

CONCLUSION & SOLUTION

GAP could use the label “Made in USA” or “Made Northern Mariana Island (USA)”.

Gap should be responsible morally for the way its suppliers treated their workers.

In this case, GAP must give responsibility to the treatment of factories to their workers.

GAP should controlling & monitoring the supplier factories.

Gap should give a warning or punishment to the sweatshop factory, for preventing the sweatshop cases would happen again in the future.