Seven US clothing retailers sued over alleged sweatshop conditions at supplier factories have agreed to pay for third-party monitoring of working conditions as part of an out of court settlement.
The move ends a three-year legal battle relating to factories in the US-administered territory of Saipan, part of the Northern Mariana islands 1400 miles west of the Philippines. Labour rights campaigners have alleged that some clothing factories there have long had unacceptable working practices.
The companies to have agreed the settlement are Abercrombie & Fitch, Gap, JC Penney, Lane Bryant, Talbots, Target and The Limited.
Nineteen other firms settled in May. Twenty-three Saipan manufacturers have also settled claims made in a federal class action lawsuit that alleged violations of US wage and working-hour laws and other workers’ rights.
None of the defendants admitted any wrongdoing as part of the settlements.
The companies have agreed to abide by a code of conduct in Saipan and to fund independent audits of factories on the island, probably monitored by the International Labour Organization.
A panel of three retired US judges will oversee the monitoring. The judges will be able to conduct unannounced inspections of the factories, investigate complaints and order payment of back wages.
The companies will each make a one-off contribution to a fund that will pay for the work of the the monitors.
They will also compensate more than 30,000 garment workers and cover the legal costs of the groups involved in bringing the case. The value of the settlement fund will be $20million (£12.8m), comprising $8.75m from the previously settled retailers and $11.25m from the 23 Saipan manufacturers and seven retailers which recently settled.
Many of the plaintiffs are immigrants from nearby Asian countries. Drawn to Saipan with promises of high pay, they encountered long hours and low wages, campaigners allege.
As part of the settlement, workers who want to return to their home countries will be eligible for up to $3000 in relocation fees.
Saipan garment factories produce more than $1billion worth of clothing sold annually in US stores, although much of this is produced by manufacturers not involved in the settlement.
‘A policy of human rights has now arrived in Saipan,’ claimed Medea Benjamin, president of Global Exchange, a pressure group that campaigns against sweatshops. ‘This agreement sets up an independent monitoring system that assures workers will be treated with dignity.’
One firm that has been sued – Levi Strauss – has decided not to settle and to continue its legal fight. The company, which has not sourced garments from Saipan since January 2000, said it had no case to answer.
‘The allegations against us are just not true,’ it said. ‘While we were operating in Saipan we regularly assessed our suppliers against our code of conduct to make sure they complied. Although it would be cheaper to settle, we have no plans to do so.’ Levi Strauss said it had withdrawn from Saipan for ‘strategic’ reasons unconnected to the lawsuit.