Company profile: PouChen
Headquarters: Taichung
Country: Taiwan
Founded in: 1969
Total points of sale in Europe: PouChen has no points of sale in Europe. As of the end of September 2005, the PouChen Group operated about 520 retail stores/counters in the mainland carrying branded athletic and casual footwear as well as apparel in Beijing, Guangzhou, Shanghai, Shenzhen, Chongqing and Dalian.
Owned by: The company is publicly owned, but the Tsai family owns most stocks
Name of CEO: The company is controlled by the Tsai family.
Product description: PouChen produces shoes for almost all branded sportswear companies, including Nike, adidas, Puma, Asics, and a number of other fashionable shoe companies. In addition it produces a small amount of sportswear apparel.
Countries of production: China, Indonesia, Vietnam
General remark: PouChen is not a typical brand name company or retailer, but is mostly known for its production for almost all branded sportswear companies. It employs workers in factories in China, Vietnam and Indonesia. Part of the production of the PouChen Group takes place under its 100% subsidiary Yue Yuen.
PouChen Headquarter
Taichung Headquarter ADD: 13F, No. 78-2, Sec.3,
Taichung Kang Road, Taichung, 407, Taiwan, R.O.C. TEL: 886-4-2461-5678
Comment CCC and proposals for action
PouChen is the world’s largest footwear manufacturers, with a market share of 17%. The company is also active in sports-garment manufacturing and retailing. PouChen produces footwear for over 30 brand-named corporations including: Nike, Adidas, Reebok, Puma, Asics, New Balance, but also from important casual shoe brands like Timberland, Rockport, Clarks, and Dr Martens. Many of these brands have established long-term relationships with PouChen. The company employs over 280,000 workers, most of them located at production sites in China, Vietnam and Indonesia. The company has been mentioned in many reports on poor working conditions by NGOs and journalists, including the PlayFair 2008 Clearing the Hurdle report. As a main customer of multiple branded corporations, PouChen supposedly has to implement the ethical standards of those brands in its production processes. In 2001 the company itself also adopted a code of conduct.
However, there are many reasons to stay critical about this company (and its customers). First, PouChen is not transparent about its CSR policy. Its code, which is not publicly available, is weak on several standards and does not refer to international standards. Second, despite large profits, the company does not pay a living wage. Third, PouChen is notorious for its hierarchical, top-down, command-and-control management policies. Worker representatives in its Chinese and Vietnamese facilities are not democratically elected (but appointed by management). Fourth, worker pressure is very high, over-time structural, and health and safety hazards are common.
In an e-mail to the CCC, PouChen indicated that, because they are serving many different customers, they could not “discuss the activities of our factories since this would involve disclosing details that each customer would consider as part of their proprietary production process.” However, the CCC is of the opinion that this is an invalid argument where it concerns labour rights and working conditions in companies’ supply chains.
Although the company has recently started to respond to workplace issues mentioned in the Clearing the Hurdle report, it has not responded to the CCC questionnaire. The following evaluation of transparency, code implementation and monitoring of labour standards is therefore based on research by the CCC in 2007. In the section “Recent developments” you can find additional information gathered after 2007.
Transparency
PouChen has not responded to the CCC-questionnaire at all. As a public company, PouChen is transparent with regard to: turnover, profits, sales and corporate structure. The amount of salaries of the top management is not known. Its annual report includes a section on sustainability but fails to meet international reporting standards (GRI). PouChen provides neither the results of factory audits nor information about verification activities. The company does not disclose general targets for future monitoring activities.
Formal commitment to labour standards
PouChen has adopted a code of conduct that requires compliance with all relevant local labour laws, but does not indicate that where local and international standards are at variance the higher standard should prevail. The code does not include a reference to the Universal Declaration of Human Rights. The company is formally committed to respecting minimum labour standards in accordance with ILO Core Conventions. These include the right to organise and bargain collectively and prohibit child labour, discrimination, and forced labour.
The company’s code is mandatory for all workplaces controlled by PouChen, however workplace standards do differ depending on the requirements of PouChen’s buyers. PouChen’s code of conduct applies to all workers affected by labour practices for which the company has some measure of responsibility. The code of conduct includes measures to implement the code and monitor labour conditions in the facilities used. Beyond the ILO Core Conventions, the company is only committed to paying the legal minimum wage or industry standard, i.e. not a living wage. There are no limits to overtime. The company’s code calls for a safe and hygienic environment for the workers who produce its garments and/or sportswear. The company does not explicitly require that all workers receive a regular employment contract.
Beyond the labour standards mentioned above, the company code is not precise enough on some specific issues. It does not state its commitment in relation to*:
- the provision of transitional measures that will be in the interest of the child and of her/his family where child labour is found; - special provisions for workers under 18 years of age (e.g. education, no night work);
- specific steps to encourage decent working conditions in countries where freedom of association and collective bargaining are restricted by law;
- prohibiting the retention by employers of security deposits or identity papers;
- guaranteeing a living wage during regular working hours without overtime; - ending the worst forms of child labour with explicit reference to ILO core-convention 182.
Code implementation and purchasing practices
PouChen did not indicate the steps it is taking to effectively implement minimum labour standards in its supply chain. According to the information given PouChen has no intention to implement the payment of living wages to workers. PouChen has not shown that it is aware of the fact that part of its production sites are located in countries or zones where freedom of association is not guaranteed by law.
Monitoring and Verification
There is nothing known to CCC about monitoring activities. The company is not involved in independent verification by a multi-stakeholder approach. There is no evidence documented that local partners, NGOs and/or trade unions are consulted in the monitoring and verification process.
Violations of labour rights and public conflicts
As a main supplier to branded footwear companies, PouChen/ Yue Yuen has been mentioned in various NGO reports on violations of workers' rights. The company has also been mentioned in journalistic articles with regard to violations in Vietnam. The key violations were related to Freedom of association and, or the right for collective bargaining, wages, hours of work, and bad working conditions in general.
Recent developments
PouChen was highlighted in the PlayFair 2008 campaign. The company has responded to the specific accusations of poor workplace standards concerning a number of its factories reported in the ‘Clearing the Hurdles’ report. At a three day conference in July 2008, organised by the Play Fair 2008 Campaign (led by the International Trade Union Confederation, the International Textile, Garment and Leather Workers Federation and the Clean Clothes Campaign), PouChen committed to participate in follow-up plans to explore amongst other issues how to promote trade unionism and collective bargaining as well as improving wages across the sector.