Taiwan: Bicycle manufacturer Giant, brands Trek & Scott linked to allegations of fee-charging & abusive living conditions for migrant workers; incl. co. comments
Summary
Date Reported: 27 Jun 2024
Location: Taiwan
Companies
Giant Bicycles - Employer , Trek Bicycle Corporation - Buyer , Scott Sports - Buyer , Andra AP-fonden (AP2) - Other Value Chain Entity , Norges Bank Investment Management (NBIM) - Other Value Chain Entity , BlackRock - Other Value Chain Entity , Vanguard - Other Value Chain Entity , Dimensional Fund Advisors - Other Value Chain Entity , J.P. Morgan (part of JPMorgan Chase) - Other Value Chain Entity , HSBC - Other Value Chain Entity , Schroders - Other Value Chain Entity , Hermes Investment Management - Other Value Chain Entity , Royal Bank of Canada - Other Value Chain Entity , Recreational Equipment, Inc. - BuyerOther
Not Reported ( Labour supplier ) - RecruiterAffected
Total individuals affected: Number unknown
Migrant & immigrant workers: ( Number unknown - Vietnam , Manufacturing: General , Gender not reported , Documented migrants ) , Migrant & immigrant workers: ( Number unknown - Thailand , Manufacturing: General , Gender not reported , Documented migrants )Issues
Recruitment Fees , Wage Theft , Precarious/Unsuitable Living Conditions , Intimidation , Protection from arbitrary arrest, detention or exileResponse
Response sought: Yes, by Journalist
External link to response: (Find out more)
Action taken: Giant didn’t acknowledge workers’ concerns, nor commit to remediation. ‘It is understood that some migrant employees pay recruitment fees to home-country recruiters, but our company is not involved in the negotiation and collection of such fees,’ the company said. Giant repeatedly stressed that it complies with Taiwan’s laws. It had no comment to make on its workers’ testimonies about dorm conditions and management practices. ‘REI is one of the many cycling brands that has utilised Giant’s manufacturing capabilities over the years. However, we are not currently sourcing from their Taiwanese facility’, said REI. REI also said it annually audits most of its suppliers of finished goods and works with suppliers to identify root causes of any audit finding that doesn’t align with its standards, then address the problems. REI didn’t reply regarding if it had identified debt bondage and other abuses at Giant over the years, nor if it would take responsibility for addressing potential issues with Giant to ensure remedy for workers. Trek did not reply to the journalist's request for comment, and Scott said it was looking in to the matter. The journalist reached out to all investors for comment. The Norwegian pension fund said it would look into the forced labor risks connected to its investees. “With respect to ethical recruitment, we agree with the Employer Pays Principle and that recruitment fees should be reimbursement of when they have been unfairly charged to workers,” a spokesperson said. AP2 said it has zero-tolerance for forced labor, but does not require investees to practice zero-fee recruitment. It does not include human rights or labor issues in pre-investment screenings, but addresses such risks with investees through ongoing dialogue. Following the posting of this article, the Resource Centre received a statement from Federated Hermes: “We previously had a small equity holding in Giant Manufacturing, which we have fully divested from based upon the fund's ESG criteria, which the company no longer meets”.
Source type: News outlet
"Are Tour de France bike-makers overlooking forced labour risks?"
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Giant, the world’s biggest bike manufacturer, which is based in Taiwan, makes bikes for Team Jayco AlUla... Other Tour team suppliers such as Trek (Team Lidl-Trek) and Scott (Team DSM-Firmenich) have imported Giant-made bike frames for years...
In spring 2024, around a dozen of Giant’s migrant employees were interviewed for this story. Vietnamese employees said they paid around $5700 to home-country recruiters for jobs at Giant in Taiwan. Thai employees said they paid up to $3200...
Vietnamese employees also paid an additional $500-1000 deposit or ‘anti-escape fee’, they said, which recruiters told them would be returned only when they went home...
In June 2023, The US and Taiwan signed a trade agreement in which they committed ‘to eliminate the charging of recruitment fees and related costs to migrant workers’.
Yet all Giant interviewees, recruited between 2017 and 2024, said that — besides the up-front recruitment fees — they are continuously charged a monthly service fee by Taiwanese labour brokers, though no one felt they receive any service in return. The fee equals two months’ base wage per three-year contract and is legal in Taiwan. The fee is deducted by Giant and shown on workers’ payslips...
Some interviewees complained about crowded and dirty dorms. Photos shared with my team show up to 20 beds in narrow rooms. Some told us about punitive management practices including deportation, threats of deportation, and pay reductions for not obeying workplace or dorm rules. Others spoke of a points system with zero points might result in immediate deportation.
Giant didn’t acknowledge workers’ concerns, nor commit to remediation. ‘It is understood that some migrant employees pay recruitment fees to home-country recruiters, but our company is not involved in the negotiation and collection of such fees,’ the company said...
REI annually audits most of its suppliers of finished goods and works with suppliers to identify root causes of any audit finding that doesn’t align with its standards, then address the problems, the billion-dollar retailer said...
Trek, the consumer bike brand and supplier of Tour de France team Lidl-Trek, does not accept forced labour at suppliers, according to its online information which explains that ‘Trek requires its major suppliers to fully disclose their hiring and labour practices’. Did it ask Giant? Trek didn’t reply our request for a comment.
Scott said it is looking into the matter...
[Later reporting highlight the role of investors in these brands; see here. Following the posting of this article, the Resource Centre received a statement from Federated Hermes, which had been linked to Giant Manufacturing: “We previously had a small equity holding in Giant Manufacturing, which we have fully divested from based upon the fund's ESG criteria, which the company no longer meets”.]