New WRC Factory Report: South China Headwear (China)

Please find here a case summary concerning labor rights violations and remediation at South China Headwear, a factory making university logo caps in Shenzhen, China. These are the key elements:

• We found violations of law and university codes of conduct, including excessive overtime and the failure to provide workers even one guaranteed weekly rest day, failure to enroll workers in government social insurance programs, substandard dormitory conditions, and illegal wage deductions.
• The factory has addressed the benefits enrollment and wage deduction issues, which represents significant progress.
• However, the factory has not agreed to fully address the overtime and rest day issues nor the dormitory conditions. The factory says it is not willing to guarantee at least one rest day until 2023, an unacceptable delay. The factory has cleaned the dormitory but has not committed to regulate the ambient temperature.
• Two licensees have played positive roles in pressing the factory to remediate: Vantage Custom Classics and Top of the World/Fanatics (the latter reports no sourcing of collegiate goods from the factory for several years, but it is still a buyer for non-collegiate goods). Other licensees failed to respond to WRC communications: GenTeal Apparel and Global Sourcing Connection.
• We believe there is still a strong prospect for South China Headwear to commit to full remediation if we can get significant non-collegiate buyers to weigh in energetically. This is our immediate focus.
• If this does not produce full remediation, we will have to advise licensees that continuing to source collegiate goods from this factory places them in violation of their obligations to their licensor universities. Collegiate goods cannot be made indefinitely at a factory that will not provide workers even a single weekly rest day. We hope this will not prove necessary.

We will update you when there are further developments. Please let us know if you have any questions.