Silicon Sweatshops: Shattered dreams

[Editor’s note: Silicon Sweatshops is a five-part investigation of the supply chains that produce many of the world’s most popular technology products, from Apple iPhones, to Nokia cell phones, Dell keyboards and more. The series examines the scope of the problem, including its effects on workers from the Philippines, Taiwan and China. It also looks at a novel factory program that may be a blueprint for solving this perennial industry problem.]

TANZI, Taiwan — For Filipina workers at the export processing zone here, complaining too loudly about your employer can get you fired.

So says Father Joy Tajonera, who preaches and helps such workers from his center here on busy Zhongshan Road as part of the Ugnayan Migrant and Immigrant Ministry.

"Women who stand up for their rights end up losing their jobs," said Tajonera. "Their names will be blacklisted, so they can't come back [to work in Taiwan]. So they say 'let's keep quiet.'"

After dark on a September night, before the start of her shift, one such Filipina worker, 25, walked from her dorm, past a jumble of shops and traffic on Zhongshan Road, through Tajonera's humble first-floor Catholic chapel, and up the stairs. She, too, was afraid to talk, and asked to be called "Claire."

She sat on a couch on the second floor, with Tajonera beside her. Then she described the deal with the devil she made to work in Taiwan.

First, she had to pay a 50,000 pesos ($1,050) "placement fee" in the Philippines. She borrowed half that. The limit for such fees should be about $550 under Taiwan regulations.

The young woman then handed over her passport to her broker, who still has it in "safe keeping." Now, she works the 8 p.m. to 5 a.m. graveyard shift at the high-tech firm Wintek. She makes Taiwan's minimum wage, $550 per month.

But in the first year, her take-home salary was just $300, after taxes and deductions for her monthly brokers' fee, dorm fee and "forced savings.” The latter is a practice by which brokers keep part of a worker's salary in hock until their contract is finished.

Reverend Joy Tajonera, who helps migrant workers in Taiwan.
(Jonathan Adams/GlobalPost)

Southeast Asian migrant workers like Claire pay huge fees to brokers and take out crippling loans for a job in one of Taiwan's high-tech parks. They're here for three-year stints on the floors of factories churning out parts for cell phones, printers, scanners and other gadgets.

They'll clock as many hours as possible, to send money to the families they've left behind in the Philippines. During their off-hours, they sleep six or seven to a room in soulless dorms in or near the industrial parks.

A proud “breadwinner”

The Wintek factory where Claire works is one of the world's top suppliers of handset panels. It supplies Finland's Nokia. It also makes panels for Motorola and Apple, possibly including iPod Touch panels and iPhone panels, according to current and former employees, labor activists and industry analysts.

In recent months the firm has also been mentioned by Taiwan's Commercial Times, Dow Jones and other media as a possible supplier of touch screens for Apple's much-hyped, supposedly forthcoming "iTablet" gadget.

Motorola declined to comment. Neither Wintek nor Apple will confirm the two companies' business ties, citing confidentiality. Current and former workers say it's common knowledge that Apple is a customer, but describe a secretive process in which components are shipped with no logos, and not directly to Apple.

Three other Filipina migrant workers at Wintek reported placement fees, deductions, passport "safe-keeping" and "forced savings" similar to Claire's. Seven migrant workers at other firms in the same export zone reported to GlobalPost placement fees from $945 to $1,675.

All the fees, loans and salary deductions can add up to more than a year's wages, making Taiwan's foreign workers' scheme a modern-day form of indentured servitude.

Economic conditions in the Philippines are so bleak that thousands gladly accept such arrangements. In three years they can still make more than they could back home — provided they complete their full contract.

"I could find a job there [in the Philippines] but it can't meet my family's needs," said Claire. "I'm happy here, because I can help my family. I'm a breadwinner."

Moreover, she says she has little stomach for fighting her company or broker. "A lot of us would really like to make a protest, but I don't have any support," she said, shyly. "In my case, we're only 50 workers [in her unit]. How can I be sure all of us want what I want?"

Asked if Apple had a vested interest in exploited migrant workers like her, Claire answered quickly, "Yes, because when their suppliers hire foreign workers they can make more money.”

Aware of the problem

In its most recent report, Apple itself fretted about the treatment of migrant workers.

"We learned that some of our suppliers work with third-party labor agencies to source workers from other countries. These agencies, in turn, work through multiple sub-agencies — both in the hiring country and the worker's home country — in some cases, all the way back to recruiters in the workers' home village."

"By the time the worker has paid each agency, the total fees may be equivalent to many month's wages and exceed legal limits,” the report states.

Apple said it had made such practices a "core violation," its most serious. The firm said it had forced its suppliers to return to workers $852,000 in illegal placement fees, but did not name or locate those suppliers.

Tajonera said average placement fees are equivalent to 10 months' salary. He said it's hard to get labor regulations enforced because workers are afraid to put their jobs at risk.

That's where a high-profile customer like Apple can make a difference, critics say.

"If the workers knew Apple was on their side, they would pursue justice," said Tajonera. "Only Apple can bend the knee of a corporation and say, 'If you don't do it this way, we won't do business with you.'"

"I know they have this corporate responsibility code, but the problem is, it's not being implemented," he said. "There's no follow-up. It's like handing them [Apple's suppliers] a piece of paper saying 'do this,' but then that's it."

Technically, migrant workers like Claire are employees of the labor broker, not Wintek.

But Apple now requires that suppliers "take responsibility for the entire recruitment process, including the recruitment practices and fees of labor agencies in the workers' home countries," according to its latest report. Pointing to those new rules, Apple spokesperson Jill Tan said, "We've developed an industry-leading position on recruitment practices."

Wintek declined to comment on specific allegations involving Filipino migrant workers at its factories. "We have little to comment on things regarding specific customer’s supplier code of conduct,” Wintek vice president James Chen said in an email.

"The activities of each company in the Wintek Group are conducted in accordance with local laws and regulations," he added.

First to be fired

Tajonera, the Catholic priest who ministers to migrants, said that workers are easily intimidated if they complain alone or in small groups. And when times are good, there's little incentive for them to rock the boat.

But in a global economic crisis, such workers are the first to get downsized. And they find out how few rights they really have.

According to the NGO Migrante, more than 6,800 Filipinos have been laid off by firms in Taiwan and sent home since last November. Most worked at electronics firms. Some workers were given only a few hours' notice before being taken to the airport, Migrante says. Some 600 of those even had to pay for their own plane tickets home.

"In Asia, the economic crisis was experienced by migrant workers first," said Migrante chairperson Garry Martinez, in a phone interview from the Philippines.

In the export zone where Tajonera ministers, the layoffs came just before the start of the traditional pre-Christmas "novena" mass. "I called it the Exodus," said Father Joy. "Our Mass used to have 700 to 800 people — all of the sudden it was half that. All of us were caught off guard."

At the Wintek factory during that period, at least 550 Filipina workers were let go, said Claire. Most of her co-workers left voluntarily, she said, and returned to the Philippines. "They [the company] told people, if you resign now, you will be the first to be rehired," she said. "But there's been no re-hiring."

In a September telephone interview from the Philippines, a 30-year-old former migrant worker in Taiwan told another typical tale. She asked to be called "Catherine,” saying she did not want to give her real name because she's in the midst of legal proceedings.

Catherine paid brokers a $2,130 "placement fee" for arranging work in Taiwan. She had to borrow almost half that.

She started work last July at Sintek Photronic, doing quality control. "My work was OK," said Catherine. Sintek makes touch panels, and color filters that are used in computer monitors.

When the recession hit demand for such computer monitors in the U.S. and other markets, the shock reverberated down the supply chain, all the way to the factory floor where Catherine worked.

In the first week of November, she and other workers were told that plane tickets back to the Philippines had been arranged. They had to leave. On Nov. 26, 2008, Catherine came home — jobless, leaving her husband (a fellow migrant worker) behind in Taiwan, and with no way to pay off a pile of debt.

She got back $180 that had been deducted and stashed away for her as "forced savings." And she received an additional $160 in severance pay. That didn't help much. Catherine said she owed her lenders $1,640, including interest.

Sintek said in an email that it is not involved in migrant workers' fees to labor brokers, and that migrant workers agreed in writing to monthly salary transfers to savings accounts. Sintek said that severance pay for foreign workers dismissed late last year was calculated in consultation with the Taiwan labor ministry and the Philippines representative office in Taiwan, and that workers agreed in writing to the payments.

Now, Catherine says her only hope of paying off her debt is if she wins a suit against her Filipino employment agency, demanding payment for the remainder of her two-year contract and return of part of the exorbitant placement fee.

"Before I went to Taiwan, I dreamed of a good future," said Catherine. "But when I came home, I came home with nothing."

[Next in the series: Disposable workforce. Laid off Taiwanese workers allege their firm violated industry codes even when times were good.]

Silicon Sweatshops: The series

Special Report: Silicon Sweatshops

Shattered dreams

Disposable workforce

The China connection

A promising model