Labor groups take aim at the expanding discount chain for labor practices in American controlled Saipan.
By Michelle Chihara
JULY 26, 1999: On July 2 the billboard appeared. The message THE WAIT IS OVER IN 23 DAYS was printed next to a white bull's-eye on a red background. That was it. No explanation. Towering over Cambridge Street -- or plastered, guerrilla-style, on posters in the subway -- the mysterious little red-and-white target popped up all over Boston.
The logo, if you don't already know, belongs to discount-retail giant Target. Its Minneapolis-based parent company, Dayton Hudson Corporation (DHC), is trying very hard to turn the "upscale discounter" into a strong national brand, and this week it's bringing 380,000 square feet of that effort to the Boston area. Three major Target stores are opening July 25: one in Danvers, one in North Attleboro, and one in Taunton. With clever publicity stunts and flashy ad campaigns, Target seems to be setting up its concentric red circles to have the same kind of ubiquitous recognition enjoyed by the Nike swoosh.
When you see those circles, DHC executives want you to make a number of associations. They want you to think, "Hip but affordable." They want you to think, "Wow, capri pants for less, coming my way!" They want you to think, "Urban Outfitters meets Pottery Barn meets CVS." They want you to think, "Ooh, Target" (which is pronounced, à la French, "Tar-zhay" by those who mock its cheap chic).
They very much do not want you to think: "Target -- isn't that one of the stores being sued for using sweatshops on US soil?" But DHC is one of a group of retailers named in a series of federal lawsuits that allege sweatshop conditions ranging from threats to abuse to prison-like living conditions in factories on Saipan, one of the western Pacific's Northern Mariana Islands. Saipan, as an American territory, enjoys a special status: it's something more than a colony, but it's not quite a state. The plaintiffs are seeking more than $1 billion in damages through the groundbreaking lawsuits which would hold retailers responsible for conditions in foreign-owned factories that manufacture the goods they sell. In response to the increasing public pressure, the Senate Energy and Natural Resources Committee is holding hearings about immigration and labor issues in Saipan on July 27, two days after Target opens its stores in the Boston area. Further hearings will be held in the House in September.
So far, the press has dragged the bigger names in the suit -- such as the Gap and Tommy Hilfiger -- through the most mud. Because DHC has a lower profile, it hasn't made many headlines. A recent Boston Globe business feature on the arrival of Target in Massachusetts didn't mention Saipan at all. But Target, which accounts for 75 percent of DHC's revenue, is a growing presence on the national radar. Few people are aware of the connection between Target and DHC, and that's a good thing for Target. The specter of abusive conditions and human-rights violations is diametrically opposed to the image that the clean, friendly Target -- where customers are "guests" and employees are "team members" -- is working so hard to establish.
Target's practice, when breaking into new metropolitan markets, is to establish itself with clever promotional stunts. In New York, billboards with the target symbol read simply, CALL IF YOU KNOW WHAT THIS MEANS. The 800 number was so flooded with calls that the company had to close it down. In Chicago, the company created "radio roadblocks": at specific times during rush hour, every local radio station ran simultaneous ads for Target. And here in Boston, on Cambridge Street, Target put up a vaguely millennial billboard: an unexplained countdown ticking off days next to the signature red bull's-eye. (The countdown, of course, turned out to refer to the number of days until the stores would open.) In the guerrilla style that's characteristic of Target's New York advertising firm, Kirshenbaum Bond & Partners, posters in the T say BEEN WAITING LONG? or THE WAIT IS OVER above the Target logo.
In 1997, DHC hired Kirshenbaum Bond to help transform Target from a Midwestern discount giant into a hip East Coast discount giant. At the time, Target's VP of marketing told the New York Times, "We are not just opening a store, we are launching a brand." The chain sold its Midwestern "nice" to jaded New Yorkers with just enough irony to make the hokiness palatable. Since then, its print and billboard campaigns have mixed the down-to-earth and the hip -- funky enough to be cool, but self-deprecating enough to seem honest. For example, just after the Oscars, Target ran an ad with a Cate Blanchett look-alike dressed in what appeared to be an Elizabethan costume. But on second glance, the starched white collar turned out to be an air filter ($9.99), and the stately black garb was a sweater, priced at $16.99.
Target's goal is to be the nation's premier "upscale discounter" -- the Pottery Barn of discount chains. Among its competitors -- giants such as Wal-Mart and Kmart-- Target is the only one to employ "trendspotters," teams of people who keep up with the cutting edge and then design Target-brand versions of the coming season's "it" items.
"We shop domestically and internationally, the West Coast and the East Coast, London, Paris, Amsterdam. Sometimes Rome, sometimes Milan . . . we do a lot of research," boasts Rachel Matteson, the trend and design manager for Target's children's wear. Even in quicksilver markets like juniors' clothing, Matteson says, Target has "most of the trend issues covered -- cargo pockets, khakis of all kinds, capris and short pants, casual plaid, the washed-out, worn looks, tank tops..."
And Target's "trend-right" ambitions (to use the trendspotter jargon for, well, trendy) extend to home goods, too. Well-known architect Michael Graves just launched a full line of kitchenware to follow the success of the much-publicized teapot that he designed earlier this year. Calphalon and Target have teamed up to sell an exclusive line of pots and pans. A brief tour of the Danvers store two weeks before it opened reveals phalanxes of deodorant, 10-tiered racks of shoes, and, at a key intersection, a "trend area" aimed at college students, where the standard shelves give way to curved display cases with picture frames rimmed in bright blue and in yellow fur.
So far, Target's approach seems to be working. DHC's revenues were up 12 percent in 1998 alone, to $30.1 billion, with $935 million in profit. When the Massachusetts stores open this coming Sunday, the Target chain will have 884 stores in 44 states. Including its other holdings (Dayton's, Mervyn's, and Marshall Field's among them), DHC is the fourth-largest retailer in the country.
But, as with many other profitable mass-market companies, its success may have come at the expense of the people who work for its suppliers. It is one of 18 major retailers -- including the Gap, Tommy Hilfiger, Wal-Mart, J. Crew, the Limited, and Sears -- named in three federal lawsuits that were filed in January in Los Angeles, San Francisco, and Saipan. Human-rights groups, law firms, and a union have filed the class-action suits on behalf of workers in Saipan -- where plaintiffs say DHC has produced $91.5 million worth of garments in the past four years.
That $91.5 million may only be a small part of Dayton Hudson's total revenue, but it makes DHC the third-largest manufacturer in the Saipan lawsuit. The Department of Labor and the Department of the Interior, as well as Representative George Miller (D-California), have long held that the conditions in Saipan are unacceptable in an American commonwealth. In a 1998 report, the Department of the Interior expressed concern over Saipan's "heavy and unhealthy dependence upon an indentured alien worker program and on trade loopholes to expand its economy." It decried "worker exploitation" and "a two-tier economy, in which low-wage, indentured alien workers dominate the private sector." The loopholes that the Department of the Interior refers to exempt Saipan from standard US tariffs and wage laws. The island shipped about $1 billion in clothing to the US mainland last year, duty-free, according to the plaintiffs.
Saipan, seized from the Japanese during World War II, is officially US soil, but foreign garment workers make up more than half the population of 70,000, according to government figures. Fully 91 percent of private-sector jobs in the Northern Mariana Islands are held by temporary contract workers. Many of them come from countries such as China, Vietnam, and Bangladesh and pay large "recruiting fees" to secure jobs in Saipan, sometimes putting their families deeply into debt. Two ABC News 20/20 exposés documented "truckloads of young women who have actually paid thousands of dollars for what they are told will be good jobs in America." Once faced with the grueling conditions on Saipan, "the women are not free to change jobs because of the Saipan loophole" that allows employers to ignore US labor laws and regulations.
20/20 investigators also found evidence that at some nightclubs in Saipan, women were coming over for promised jobs as waitresses and then, once they arrived, being forced to work as prostitutes. A special report by the Minneapolis Star Tribune in June appeared to confirm worker allegations of harassment and coercion, and the 20/20 report showed the governor of Saipan admitting that he was aware of forced prostitution.
The details of what exactly goes on in Saipan are the subject of considerable controversy, but the press, the plaintiffs in the lawsuits, and several government departments have documented labor practices that would never fly on the American mainland. These include dangerous and squalid working conditions, low wages, long hours, and contracts that amount to indentured servitude. Workers often live in barbed-wire-surrounded, locked-down compounds and must obey strict curfews. They are not allowed to organize into unions, and some are asked to sign contracts that prohibit them from falling in love or getting married.
It's true that Saipan has a minimum wage of $3.05 per hour, which is less than the federal standard of $5.15 yet much higher than mainland China's norm of 23 cents an hour. And for workers used to Chinese restrictions, prohibitions and curfews may seem less stringent than they would to their American counterparts. But lawyers for the plaintiffs are also charging abusive practices -- such as inflated fees for room and board, underpayment, and embezzlement -- that have been documented by the New York Times, among others. It's hard, too, to argue with the idea that workers in an American territory, producing merchandise bearing the "Made in the USA" label, should enjoy the protection of American labor standards.
In a particularly dramatic illustration of the health risks present in Saipan, in March the Occupational Safety and Health Administration (OSHA) reported one of the largest incidents of food poisoning ever documented. Almost 1200 workers fell ill with vomiting, swelling, and even seizures, probably due to fecal coliform bacteria in the water.
Two months later, OSHA found that Saipan's industry was still plagued by sweatshops.
Target spokeswoman Carolyn Brookter confirms that products made in Saipan are sold at Target stores, but she denies the allegations in the lawsuit. "We have standards of vendor engagement. We take these complaints very seriously," she says. She adds that the company sent investigators to Saipan when the suit was filed, and that "there were no human-rights violations that we found. We did find some things that had happened, very minor things, and those were taken care of."
Yet Carmencita "Chie" Abad, a former contract worker in Saipan, says that there are serious issues, and they have not been resolved. A 39-year-old native of Manila, in the Philippines, Abad is a plaintiff in one of the lawsuits involving DHC. She worked in Saipan from 1993 to 1999 and now lives in San Francisco, where she campaigns for change in Saipan. While on the island, she tried to organize a union; eventually, she says, "they fired me for being a troublemaker." Abad is still in contact with workers in Saipan and says that since the suit was filed, factories "have put down the barbed wires, maybe just to eliminate bad publicity." And, she adds, since the food-poisoning incident, "they buy sealed bottled water. Before that, we were drinking rain water." To her knowledge, Chinese workers are still signing unfair contracts, and most of the problems remain.
Part of the problem in Saipan is that it is hard to get a clear picture of what's really going on. Reporters who visit the island often can't get into factories unless they are on guided tours with factory officials who have had time to prepare for their visits. Workers interviewed in secret often give vastly different accounts of conditions than those observed on the tours.
The lawsuits probably won't be resolved for years. In the meantime, they're receiving widespread national coverage. The anti-sweatshop crusade is one that's gathering momentum on college campuses nationwide, and the public is becoming more aware of the issues. Among the attorneys for the plaintiffs is high-profile law firm Milberg Weiss Bershad Hynes & Lerach, which successfully reclaimed stolen assets from Swiss banks for survivors of the Holocaust.
By demonstrating that the implicated companies were aware of what was going on in Saipan, attorneys hope to charge the retailers with conspiring to violate human rights and with fraudulent business practices for willfully trading in goods made under such conditions. Saipan factories are largely Chinese- or Korean-owned; the current lawsuits are the first legal attempts to hold American retailers directly accountable for the conditions under which their goods are produced. In the larger battle to ensure basic rights for workers in underdeveloped countries, the strategy of holding corporations' feet to the flames seems to be working. In a recent, more narrowly constructed decision, courts found against the Unocal Corporation on behalf of workers in Burma who said they were forced into indentured servitude -- thus setting a legal precedent for the Saipan cases.
Nonetheless, "change in the garment industry is happening very slowly," says Juliette Beck, the coordinator of corporate-accountability programs at Global Exchange, a nonprofit human-rights organization in San Francisco that is one of the plaintiffs in the Saipan suit. "The way that we are making progress is by targeting industry leaders, like the Gap and Nike, by requiring them to set a whole new standard in their industry. They can afford to," she says. "Ever since Nike was branded by consumers and students and activists as a sort of sweatshop king, other companies have feared becoming victims of what they call the 'Nike syndrome.' "
In the battle to hold corporations accountable for the conditions in distant, foreign-owned factories, activists make no apologies for their policy of chopping at the tallest tree in the forest. It gets results. In 1998, after two years of intense public scrutiny, Nike's stock price dropped. In May of that year, Nike CEO Phil Knight acknowledged that the swoosh had become synonymous with a reputation for "slave wages, forced overtime, and arbitrary abuse" for workers in Asia. Activists -- particularly student activists -- continue to pressure Nike for more changes; they now say that the company, while far from perfect, has made some real progress, such as enforcing minimum-age requirements and pledging to bring indoor air quality up to OSHA standards. Similar pressure is now being focused on the Gap; Forbes has called this negative publicity "Gaplash."
"Target practice" could be the next anti-sweatshop buzzword. "If Target becomes more of an industry leader, we'll focus more attention on them," Beck says. The imminent arrival in Boston of Target's wide, uncluttered aisles, "trend-right" merchandise, and "wow" prices may very well cement the chain's success in the Northeast. And the activists are watching. "Target is similar to Wal-Mart in that when you walk into a store, it represents the global economy," Beck says. "All those products on the shelves are from places throughout the world where the labor is cheapest."
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