Backyard sweatshops making clothes for well-known labels

By JAMES GARDINER

Backyard clothing manufacturers are flouting the law to produce popular clothing labels in garages and sheds.

A Herald investigation has found evidence that New Zealand is not only exporting jobs to countries with cheaper labour, but importing what a union official described as "small pockets of Third World sweatshops."

In a double garage under a house in suburban Otahuhu yesterday, five Chinese women were busy sewing a range of items, mainly tops and skirts, labelled as Pagani Apparel.

Their employer, Zhen Hong Liu, acknowledged the premises were too small and said he was looking for a commercial site.

Mr Liu said all staff were being paid $8 an hour or more - the minimum adult wage is $7 - and that he was GST-registered.

The company was registered under the name of his wife, Lian Zhen Yang, with whom he had started the business from home about five years ago.

Allegations that hundreds of Asians are working in city sweatshops were raised by Mike Coleman of the National Distribution Union last month at the time of the police raids on the now-closed Glen Eden clothing factory of Wiliwan Sivoravong.

Mrs Sivoravong and her companies have since been charged by the Labour Department with underpaying eight Thai workers more than $250,000 over 21/2 years.

Her assets have been frozen by court order to prevent them being sold or moved overseas.

Mr Coleman's colleague, union organiser Linda Holt, yesterday visited Mr Liu's business with the Herald and described working conditions as appalling.

Toilet and meal facilities were shared with Mr Liu's family in the house. Lighting, seating and ventilation were inadequate and conditions cramped.

Piles of Pagani-labelled clothes were stacked outside or arranged on hangers in a van ready for delivery.

Pagani has stores in Milford and Royal Oak. Its management did not respond to an interview request yesterday.

Industry experts suggest many other well-known brands, including some high-priced lines, are being made, at least in part, by similar operations.

The Herald has found clothing factories at three addresses in Manukau, all of which appear to breach that city's restriction on not employing more than two outside staff in premises zoned residential.

Linda Holt said: "New Zealand companies who have good health and safety conditions are being undercut by this type of activity."

Employers in the cut-make-and-trim (CMT) industry agree that the rise in the number of "outworkers" has put pressure on the trade, although many said they used them to subcontract work.

Grant Wallace, owner of Westside CMT in Henderson, said imports following tariff cuts had made a tough industry tougher. Backyard operators were the latest threat.

"They show you a garment and they say, 'We've got so many of these to make and the price is like this,' and you know darn well if they're playing by the rules that you can't make it for that."

Labour Department inspectors have the right to visit employers and ask to see wage books to check records in relation to the Holidays Act and Minimum Wage Act.

Department staff are also responsible for enforcing health and safety and immigration laws.

Chief labour inspector Mike Feely said a lot depended on workers coming forward to complain and many were not prepared to, or unaware they could.

The department has a toll free number: 0800 800-863.