Multinational Monitor

VOL 27 No. 3


Combating the Culture of Corruption. Or Not.
by Charlie Cray

Corruption Roll Call: The Most Corrupt Members of Congreess
by Citizens for Responsibility and Ethics in Washington

Caught in Jack's Web: The Abramoff Associates' File
by Citizens for Responsibility and Ethics in Washington

Oil and Violence in Sudan: Drilling, Poverty and Death in Upper Nile State
by Egbert Wesselink and Evelien Weller


Hostile Takeover: The Corruption of Politics in the United States
An Interview with David Sirota

Exporting Corruption: How Rich Country Export Credit Agencies Facilitate Corruption in the Global South
An Interview with The Corner House

Searching for Transparency: Corruption and the Global Economy
An Interview with David Nussbaum


Behind the Lines

Structural Corruption and Reform

The Front
Human Trafficking in Jordan -- Third World Brain Drain

The Lawrence Summers Memorial Award

Book Notes
The rise and Fall of the Republican Machine -- The Life of Chinese Peasants -- Labor, Environment, and the Global Electronics Industry

Names In the News


The Front

Human Trafficing in Jordan

The U.S.-Jordan Free Trade Agreement has led to widespread human trafficking and forced servitude of guest workers in Jordan, and several prominent U.S. companies are implicated, according to a May report released by the New York City-based National Labor Committee (NLC).

“I was completely shocked by what I saw in Jordan,” says Charles Kernaghan, director of the NLC. “Guest workers had miserable conditions — the worst I’ve seen.”

The report is the product of a year of research by the NLC, a workers’ advocacy group, and workers’ rights groups and unions based in Bangladesh and the United States. Facing the challenges of government secrecy, restricted access to industrial zones and factory boss intimidation, researchers relied heavily on interviews with workers, conducted in homes and other locations out of earshot of factory bosses, to reconstruct the experiences of guest workers in Jordan.

Their findings are chilling.

The typical narrative begins in the guest worker’s country of origin. Jordanian factories run ads in Bangladeshi newspapers announcing jobs that pay high wages, provide healthcare and dormitory board, serve food that is “like the West” and offer a chance to see the country. For a fee of $1,000 to $3,000, Bangladeshis can sign a three-year contract guaranteeing them work when they get to Jordan. Guest workers usually borrow this money, often from the black market because they cannot afford bank accounts, with the understanding that their new jobs will give them the means to pay off their debt.

These job offers prove alluring to Bangladeshis beset by poverty. Wages in the Bangladeshi textile industry average 28 cents an hour, according to a 2005 report by the Harvard Center for Textile and Apparel Research. By comparison, Jordan’s minimum-wage of 58 cents an hour seems appealing.

When Bangladeshis arrive in Jordan, they are immediately stripped of their passports and identification. This restricts their movement, for if they venture outside of their industrial cities, their undocumented status puts them at risk of being picked up by police, imprisoned and even deported.

The Bangladeshis quickly learn that Jordan’s labor standards do not apply to them. Guest workers typically do not receive the legal minimum wage and are often cheated of over half of the wages owed to them. Factory owners commonly require guest workers to labor over 100 hours a week without overtime premium, enforce seven-day workweeks and provide only one to two days off per month. Guest workers tell of being forced to work up to 72-hour shifts and being beaten for falling asleep. If they complain, guest workers are beaten or threatened with deportation. Several guest workers report that they feel like slaves.

The decent living conditions promised in the ad also ring hollow. The workers report that dormitories are cramped and dirty, food is insufficient and tasteless, and bathrooms are sanitation nightmares.

A worker at the Al Shahaed Apparel & Textile factory that sews clothes for Wal-mart and K-Mart told the NLC, “We were subjected to punishment when we wanted more food. The guards used to beat us up with broomsticks. Sometimes they used to force us to stand naked in an air-conditioned room in severe cold.”

Workers at Al Safa Factory, which sews clothes for Gloria Vanderbilt, Mossimo and Kohl’s, tell of a fellow worker who hung herself after being raped by a plant manager.

When their contracts expire, most guest workers are denied the return ticket promised them by employers and must borrow more money to return to their homes. After three years of dismal pay, combined with exorbitant black market interest rates on loans to secure their positions, workers return to their families saddled with debt.

According to the report, this is the consistent experience for Jordan’s estimated 36,500 guest workers, mostly from Bangladesh and China. Kernaghan says that labor violations against guest workers are pervasive in Jordan’s estimated 114 garment factories and especially in the roughly half of these that are subcontracting factories. “Working conditions are completely out of control,” he says. According to Kernaghan, virtually all Jordanian factories currently do business with U.S. companies, including Wal-Mart, Kohl’s, Gloria Vanderbilt, Target, L.L. Bean, Thalia Sodi, K-mart and Victoria’s Secret.

The impetus for the rise of guest worker factories comes from the 2001 U.S.-Jordan Free Trade Agreement, which gives Jordan an advantaged trading position with the United States and has led to a vast expansion of the country’s apparel industry.

Ironically, the trade agreement is unique in its inclusion of workers’ rights statutes in the main body of its text. Tim Waters, director of rapid response for the United Steelworkers Union, says his union initially endorsed the agreement, heralding it as “a model in protecting workers’ rights.”

However, according to the report, these protections — which many worker advocates believe are chimerical in any case — do not extend to the guest worker class that comprises 67 percent of Jordan’s garment industry workforce.

Guest workers have no allies in Jordan. The report states that Jordanian trade unions refuse to help organize foreign workers, and the Bangladeshi embassy in Jordan turned a deaf ear to guest workers’ pleas for help. Language barriers also pose significant obstacles.

The report also charges that monitors hired by the brand-name apparel companies and retailers that use the subcontractors fail to uncover dismal working conditions. They give factory owners warning of their arrival and conduct most of their interviews on the factory floor, where workers are told to lie to them about their conditions or face penalties such as beatings or deportation.

Thus, a majority of Jordan’s apparel workers fall through the cracks of whatever worker protections may exist in Jordan.

While the Jordanian government is clearly at fault for its complicity, responsibility for the guest workers’ situation, says Kernaghan, rests with, “the U.S. government for overseeing the trade agreement and on the companies for their useless monitoring of factories.”

After repeated requests for an interview, Kohl’s released a short statement suggesting that the report’s charges are unsubstantiated: “To the best of our knowledge, none of these factories [cited in the report] are or have ever produced Kohl’s private or exclusive brand merchandise.”

Yet, according to Kernaghan, Kohl’s was identified by labels that were smuggled out of the guest worker factories by guest workers themselves.

Wal-Mart acknowledges using factories cited in the report, but says it properly inspects them. “Our policy is that when anything is brought to our attention, we will go in and audit and work with that supplier and factory on any issues that were raised,” says Beth Keck, director of international corporate affairs for Wal-Mart. When asked how these same auditors could have initially overlooked the severe and widespread labor violations cited in this report, she states, “There are things that you see on a visit, and other times you may not see those things.”

Kernaghan says that since the release of the report, several companies have admitted to violations and are engaging in negotiations with the NLC.

Tim Waters attributes corporate abuses to ineffective enforcement of the trade agreement’s workers’ rights statutes. “A law is only worth anything if it can be enforced. The Bush Administration has taken no effort to enforce this law. When humans are trafficked no one even looks into it,” he says.

Kernaghan echoes Waters’s criticism and is hopeful that the report will lead to better enforcement of laws protecting workers’ rights.

However, he suggests that the problem is much deeper. Kernaghan calls the U.S.-Jordan trade agreement “a test case” for free trade, stating “here is a free trade agreement that unions actually endorsed. This was supposed to be, overall, the best trade agreement for workers.”

That even this “model” trade agreement spiraled into human trafficking and indentured servitude is a warning sign about the inherent pressures of such trade agreements, Kernaghan says.

— Sarah Lazare

Third World Brain Drain

Developing countries are facing a critical shortage of health workers because so many of their doctors and nurses are leaving for the green pastures of the rich countries.

Raising the alarm, the World Health Organization says the world is short of 4.3 million medical personnel and this has a “deadly impact” on the countries’ ability to fight diseases or respond to new challenges like avian flu.

The migration of doctors and nurses is a “perverse subsidy,” says WHO, provided by poor to rich countries. The equivalent of 23 percent of doctors trained in sub-Saharan Africa are working in the rich countries. As many as 37 percent of South African doctors are in rich countries.

The shortage of health workers was picked as the theme for this year’s World Health Report, released by the WHO in April.

Southeast Asia has the greatest shortage of health workers in absolute terms, and Africa is the worst affected in relative terms.

The brain drain figures are quite staggering.

Last year, Kenya lost 2,998 graduate nurses to other countries — mostly to the United States and Britain. In Canada, New Zealand, the United Kingdom and the United States, a quarter or more of all physicians are imported from other countries.

The United States, which has more than half of all the world’s nurses, will need a further 800,000 by 2012 and will buy in nurses from abroad, according to an article in The Independent.

It doesn’t help when the rich countries embark on a deliberate policy or even campaign to poach medical personnel from poor countries. In March, the European Union justice commissioner Franco Frattini outlined proposals for recruiting highly educated professionals, including a “green card” for researchers, engineers and doctors.

The WHO report recognizes that migration of health workers generates billions of dollars in remittances.

But when doctors and nurses leave, the countries that financed their education lose a return on their investment and end up providing the wealthy countries with a kind of “perverse subsidy,” says WHO.

South African medical schools report that a third to a half of their graduates emigrate to the developed world every year, Danielle Grondin, of the International Organization for Migration, told the UN’s humanitarian news agency, IRIN.

“There are recruiting agencies that are very unethical — we have seen cases where recruiters go into an African country and recruit 100 percent of a graduating class,” Grondin said.

What can be done about the brain drain? Some advocates suggest that the subsidy paid by government to train a doctor or nurse can be calculated, and this amount should be repaid to the government if there is medical migration.

The cost can be paid by the country to which the person is migrating, as it benefit from the transfer of “human capital” trained at great cost by the country of origin.

A 2005 report by the UK groups Save the Children and Medact estimated that Britain had saved £65 million in training costs for doctors and £38 million for nurses it had taken from Ghana alone since 1999.

Britain could compensate Ghana for the cost of training the doctors and nurses whose services it now enjoys. Advocates also say that there could be codes of conduct on recruitment by the rich countries. Britain introduced an employment code six years ago which bans international recruitment from countries with the worst shortages. But hospitals in the public and private sectors have found ways around it.

Another measure could be to stop the medical personnel from leaving, or ask them to pay back the cost (or some of it) of their training.

But this is a difficult issue. It is hard to reconcile the extremes of “poaching practices by rich countries”and respecting the choice of the individual to pursue a better way of life, as Grondin pointed out.

WHO suggests that governments take measures to encourage doctors and nurses to stay, for example by improving pay and working conditions.

— Martin Khor/ Third World Network Features


The May/June Lawrence Summers Memorial Award* goes to British American Tobacco, for its expressed concerns about the potential health harms of a ban on smoking in bars.

In response to a proposal by the parliament of the Australian state of New South Wales to ban smoking ban in pubs, BAT argued that such a ban might lead to an increase in drink spiking, because drinks would be left unattended while smokers went outside for a cigarette. BAT also cautioned that a pub smoking ban would create other hazards, necessitating proper management of problems such as footpath congestion, litter, noise and security.

Source: Jonathan Pearlman, “Tobacco Firms' Fear for Our Health,” Sydney Morning Herald, May 2, 2006.

*In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?” wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration and was recently ousted as president of Harvard University. “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I’ve always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City.” Summers later said the memo was meant to be ironic.

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