Abuses+of+Power


 * **Secrets, Lies, And Sweatshops** ||
 * //American importers have long answered criticism of conditions at their Chinese suppliers with labor rules and inspections. But many factories have just gotten better at concealing abuses// ||
 * [[image:http://images.businessweek.com/gen/50x50/podcast.jpg width="50" height="50" caption="podcast" link="@http://www.businessweek.com/mediacenter/podcasts/cover_stories/covercast_11_16_06.htm"]] ||
 * [[@http://www.businessweek.com/mediacenter/podcasts/cover_stories/covercast_11_16_06.htm|=====COVER STORY PODCAST=====

]] || Tang Yinghong was caught in an impossible squeeze. For years, his employer, Ningbo Beifa Group, had prospered as a top supplier of pens, mechanical pencils, and highlighters to Wal-Mart Stores (WMT ) and other major retailers. But late last year, Tang learned that auditors from Wal-Mart, Beifa's biggest customer, were about to inspect labor conditions at the factory in the Chinese coastal city of Ningbo where he worked as an administrator. Wal-Mart had already on three occasions caught Beifa paying its 3,000 workers less than China's minimum wage and violating overtime rules, Tang says. Under the U.S. chain's labor rules, a fourth offense would end the relationship.

Help arrived suddenly in the form of an unexpected phone call from a man calling himself Lai Mingwei. The caller said he was with Shanghai Corporate Responsibility Management & Consulting Co., and for a $5,000 fee, he'd take care of Tang's Wal-Mart problem. "He promised us he could definitely get us a pass for the audit," Tang says.

Lai provided advice on how to create fake but authentic-looking records and suggested that Beifa hustle any workers with grievances out of the factory on the day of the audit, Tang recounts. The consultant also coached Beifa managers on what questions they could expect from Wal-Mart's inspectors, says Tang. After following much of Lai's advice, the Beifa factory in Ningbo passed the audit earlier this year, Tang says, even though the company didn't change any of its practices.

[|This article was published by Business Week in November of 2006. Click on this text to find the full article.]

Sweatshop in China. Women making jeans

building electronics, hp, Microsoft, Dell, and IBM all use factories in China for labor