At least 69 Dynamic Casting (Guangzhou)’s workers are suffering from Hand-Arm Vibration

Globalization Monitor

24^th September 2012

Since 2011, Globalization Monitor has conducted several investigations into one of the Adidas golf equipment suppliers, the Dynamic Casting Company Limited (Dynamic Casting), which is located in the Guangzhou Industrial Zone. Our investigations show that at least 69 polishing workers there are suffering from Hand-Arm Vibration condition (HAV thereafter). One year after the first reported case, Dynamic Casting has yet to arrange proper treatment or compensation for those workers in question, and it has similarly failed to arrange its entire production workforce to undergo occupational health examinations. Workers have complained that:

1.      Dynamic Casting refused to send workers for a diagnosis for possible occupational diseases;

2.      The private agreement of compensation that Dynamic Casting offered to those affected workers was unreasonably harsh;

3.      Starting from March last year, Dynamic Casting has relocated its production lines elsewhere without explaining to its workforce why that was happening. Workers were led to believe that the factory was going to shut down, which has an intimidating effect on them;

4.      Workers could not seek appropriate assistance from the Adidas Hotline.

5.      Dynamic Casting refused to pay health examination fees to workers who got the “Notice of Acceptance of Diagnosis of Occupational Diseases” in advance.

6.      Dynamic Casting delay to pay disability allowances in a lump sum to workers who had got the official disability recognition. 

Judging from the report we received we suspect that Dynamic Casting is deliberately delaying the compensation to workers in order to shirk its responsibilities. At the same time, we are very disappointed that Adidas-TaylorMade as the buyer of Dynamic Casting failed to monitor its supplier adequately.

Founded in 1994 in the Guangzhou Industrial Zone, Dynamic Casting is the first wholly-owned production base of the Taiwan-listed Dynamic Precision Casting Mfg. Co. It mainly produces golf drivers and golf balls for TaylorMade which is under the Adidas Group as an OEM production subcontractor. The products of this company are exported to Europe, the USA, Japan and other countries. The company claims that it has been practicing the OSHAS 18000 management system since 2008.

How the HAV incident unfolds

In October 2011, we contacted one of the workers suffering from HAV, Huang Xiao Wang (a pseudonym), who had been working in Dynamic Casting for 11 years. He told us that several workers on polishing duties there were dismissed without severance pay early that year. The workers asked the company for compensation but Dynamic Casting refused. And then, workers suspected that their extended work stints in a noisy environment might have damaged their hearing, so they arranged to have medical examinations at the Guangdong Provincial Occupational Disease Prevention and Treatment Hospital (Guangdong ODPT Hospital hereafter) on their own accord. During the period, they encountered some patients suffering from HAV. The workers were shocked to see that those patients have usually pale and achy fingers, symptoms which these golf workers also shared. Then, they took another medical examination of their fingers at their own expense. The results showed that their hearing was fine but their crooked fingers were suspected to be a result of an occupational hazard.

These workers were very surprised that they were afflicted with HAV because the OHS trainings provided by Dynamic Casting made no mention of this as a possible occupational hazard. Dynamic Casting had notified its employees with a list of the Hazardous Factors in the Labour Contract. However, the version between May 2008 and December 2012 which was signed by these workers does not include the hazards possibly arising from the vibration units.  (See picture 1)

The news that some workers were afflicted with HAV soon spread across the plant, prompting the entire workforce to approach the management in unison to demand that it send them for medical examinations to see if they were also affected. But the company refused. Dozens of workers then turned to the government for help. Finally, urged by the Luogang District Government, Dynamic Casting agreed to send its workforce for medical examinations in batches.

Dynamic Casting’s irresponsible behaviour 

According to our investigation, Dynamic Casting’s irresponsible acts are as follows:

1.      From March 2011 to July 2012, at least 69 workers in three Dynamic Casting departments were diagnosed by the Guangdong ODPT Hospital with having suffered from HAV. Eight other workers in the Third Workshop have yet to be sent for medical examination. (See table 1)

2.      According to one of the worker’s certificate of diagnosis of occupational diseases issued by Guangdong ODPT Hospital, the finding on the occupational hazards in Dynamic Casting is as below:  

Guangdong Provincial Occupational Health Testing Center had tested the vibration strength of the polishing machines in three departments of Dynamic Casting (Guangdong), including line 2 polishing chamber of Workshop 1, line 2 polishing in Workshop 3 and the welding and polishing workshop in Workshop 1. The result shows that vibration intensity at all three testing points exceeded the maximum permitted level of 5m/s as required by the National Standard on Occupational Health. (see picture 2)

         Workers in Dynamic Casting have worked there for many years and HAV is a condition resulting from operating the vibration units over a long period of time. This is a testament that Dynamic  Casting has violated the National Occupational Health and Safety standards for years with no indication that it has ever attempted to rectify the situation.

3.      Workers pointed out that Dynamic Casting, until the first HAV case surfaced, had only flagged risks associated with dust and noise but had not mentioned any possible HAV or other vibration hazards (see the appendix of Labour Contract). Therefore, we suspect that Dynamic Casting has violated the following Chinese laws:

A.     According to Article 44 of the People’s republic of China’s Law on Work Safety, “For labour contracts signed between production units and their employees they shall explicitly carry clauses which include the safeguard of the employees’ occupational safety, prevention of occupational hazards and contribution to the insurance fund for industrial injuries for the employees.”

B.     Article 30 of Provisional Regulation on Workshop Occupational Monitoring and Management further stipulates that labour contracts should carry clauses that inform employees of the possible occupational hazards and their probable consequences. Obviously, Dynamic Casting failed to inform workers in advance about the possible hazards that might arise from the vibration units.

4.      Workers pointed out that the Guangdong ODPT Hospital has summoned a number of workers to come for a proper examination for possible occupational hazardous conditions but Dynamic Casting refused to authorise such visits. Dynamic Casting further refused to foot the bill, forcing workers to fork out between 1,000 and 1,500 yuan out of their own pockets for those medical examinations. About 10 workers took this up with Dynamic Casting, but were told that receiving a “Notice of Acceptance of Application for Diagnosis of Occupational Diseases” doesn’t necessarily mean that they were suspected to have contracted an occupational disease or condition, and thus they do not qualify for subsidized medical examinations from the management. Yet, article 54 of the Law on Prevention and Treatment of Occupational Diseases explicitly stipulates that employers are responsible for the cost in obtaining a diagnosis for occupational diseases of their employees.

5.      Workers pointed out that the private compensation agreement between Dynamic Casting and certain workers was not a fair deal. According to our interview with workers, the private agreement required workers to forego all claims during the employment periods and thereafter. It also required workers to keep the agreement confidential and not to disclose it to any third parties. We think that the agreement is not fair because if workers were diagnosed with a second occupational disease or condition later, they would be denied the legitimate right to any compensation from the company.

6.      Workers complained that on 4^th January, 2012, Dynamic Casting dismissed four workers who had received a “Notice of Acceptance of Diagnosis of Occupational Diseases” from the hospital, on the pretext that they were absent from work. Previously Dynamic Casting refused to send these four workers for a diagnosis for occupational hazardous conditions, seeking to relocate them to a different work station instead. Workers refused to consent to the move under these circumstances and complained to the company. However, Dynamic Casting gave them the sack three days later. Workers were angry with Dynamic Casting for unilaterally changing the labour contract and denying them the basic right to an examination for possible occupational hazardous afflictions.

7.      Some workers complained to us that Dynamic Casting have delayed paying them the one off disability allowances. Previously workers had complained to the Guangzhou Labour and Social Security Bureau in LuoGang District, which replied that the allowances had been transferred to Dynamic Casting’s bank account. Workers then asked the management of Dynamic Casting for the allowances, which said that they would pay back the allowances to workers when their contracts terminate. However, according to the law in China, the disability allowances should be compensated to workers once they are certified as having a work-related disability.

According to Article 34 of The Regulation on Work Injury Insurances, if an employee is certified as having a work-related class five or class six disability, the employee should be entitled to the following benefits：

1. A disability allowance shall be paid from work-related injury insurance funds according to the disability class in a lump sum…, and

2. Work injury victims shall maintain their employment with their employers. Their employers shall allocate suitable work for them. For those who are not able to work at all, they shall be entitled to disability allowances……

         To sum up, the Regulation on Work Injury Insurances state that workers are entitled to a one off disability allowances once they have been certified as having a work-related disability. When Dynamic Casting withheld the allowances from the work injury victims it was clearly a breach of the law.

Adidas-TaylorMade failed to take full responsibility for their supplier’s employees who contracted occupational diseases

Dynamic Casting is a supplier for Adidas-TaylorMade, which as a brand company (which took over TaylorMade in 1999) has a responsibility to monitor the OHS conditions in Dynamic Casting. As shown in the serious violations of workers’ rights by Dynamic Casting as listed above, Adidas has failed to take appropriate measures to prevent the occurrence of occupational hazards at its workplace. We are very disappointed by Adidas, for the following reasons:

1.      HAV is caused by the improper use of vibrating tools over an extended period. Those 69 workers suffering from HAV have been working for Dynamic Casting for at least five years. They’ve contracted HAV as a result of having worked with substandard polishing or grinding machines for a long period. Adidas has tolerated Dynamic Casting’s substandard workshop for far too long and this, we believe, has led to the afflicted workers’ conditions. This means that Adidas has failed to meet its Code of Conduct that requires all of its suppliers to provide a safe working environment for their workforce.

2.      Adidas’ Health and Safety Guideline has listed the Hand-Arm Vibration condition as a possible hazard resulting from its production lines. However, the workers said that they were never told about HAV during their entire period of service at Dynamic Casting. We wonder if Adidas had monitored in an effective way its suppliers’ fulfillment of their obligations in providing adequate OHS information to their workers in a timely and responsible fashion?

3.      Workers pointed out that at the beginning of last October, the management had replaced some existing machines with some new ones on a lease basis, which sparked speculation of the factory’s impending closure. In the absence of an explanation from the factory, many HAV-afflicted workers opted to sign private compensation agreements with Dynamic Casting during this period out of fear that if the factory shut down, they would be deprived of any redress. Other workers suspected that the factory tried to plant and spread rumours of it going bankrupt so as to dupe workers into believing that a quick private though lesser settlement with the management is a lesser evil in the circumstance. Adidas is questioned about the authenticity of the rumor about the factory’s impending closure. Quoting Dynamic Casting, Adidas replied that it was just a rumor. The workers were not convinced, however. We would like to urge Adidas, as the brand company, to engage in a direct dialogue with the workers about its supplier’s plan and about its commitment to pay them reasonable compensations in the event of any of them falling victims to the hazards arising from their workplace.

4.      Workers also complained that they could not get appropriate help from Adidas workers’ hotline. Adidas replied that they had provided an improvement plan for Dynamic Casting. However, irresponsible acts by Dynamic Casting were continued to be reported to us.

TalorMade-Adidas Golf is one of the golf equipment brands under the Adidas Group. TaylorMade's sales were reported as having increased by 27% in the last five years, with sales revenue of more than 100 million euros[1] (about 780 million yuan) last year. TaylorMade was established in 1979 and was acquired by Adidas in 1999. It is deplorable that such a well-known transnational company like Adidas has allowed its supplier Dynamic Casting to violate the Law on Prevention and Treatment of Occupational Diseases and various other laws and which resulted in 69 of its workers suffering from HAV conditions.

We urge Adidas to answer the following questions:

1.      When did Adidas first notice Dynamic Casting’s illegal practices such as its failure to forewarn its workers of the risks in contracting the HAV condition? When and how did Dynamic Casting discover that workers were suffering from HAV?

2.      After Adidas was alerted to Dynamic Casting’s illegal practices, what has it done to help those victims?

3.      Adidas must have conducted a comprehensive management audit of Dynamic Casting before 2010. Why did it fail to uncover this supplier’s dubious management practices associated with HAV?

4.      Why had Adidas failed to notice during those management audits that Dynamic Casting’s polishing chambers did not meet national occupational health standards?

All of our doubts as listed above led us to question the ability of Adidas to monitor its suppliers/manufacturers adequately. Adidas can only save its credibility by providing prompt answers to those questions to the public.

We urge Adidas to immediately act upon the following advice if it is serious about its public accountability:

1.      Conduct a comprehensive review of all HAV cases among its suppliers/manufacturers immediately;

2.      Launch a full and immediate investigation on the machines employed by Adidas’s suppliers/ manufacturers to see if they are in line with international and national health standards, and to release to the public domain the list of nonconforming suppliers as well as the remedial action plans that it might have imposed on them to facilitate public scrutiny;

3.      Organize immediately comprehensive medical examinations for all workers who have been working with similar machines;

4.      Provide comprehensive treatments for HAV cases immediately;

5.      Fully and immediately compensate (including providing follow-up treatments for) all workers who have been afflicted with HAV.

6.      Set up an Occupational Hazards Victim Fund immediately to compensate all current or future employees should they fall victim to occupational hazards as a result of their employment.

Table 1: Summery form workers’ interview, the overview of confirmed or suspected HAV victims in Dynamic Casting

Picture 1：The appendix of a copy of the labour contract from Dynamic Casting that is purported to have listed all possible occupational hazards that might arise from its workplace. It fails to list the hazards associated with its vibration units.