Public Report of Review of U.S. Submission No. 9702 Part II: Safety and Health Addendum
U.S. National Administrative Office
TABLE OF CONTENTS
III. NAO REVIEW
Submission No. 9702(1) was filed on October 30, 1997, by the Support Committee for Maquiladora Workers (SCM), the International Labor Rights Fund (ILRF), the National Association of Democratic Lawyers (Asociación Nacional de Abogados Democráticos, hereinafter ANAD) of Mexico, and the Union of Metal, Steel, Iron, and Allied Workers (Sindicato de Trabajadores de la Industria Metálica, Acero, Hierro, Conexos y Similares, hereinafter STIMAHCS) of Mexico. It was accepted for review by the NAO on November 17, 1997. On December 26, 1997, the Maquiladora Health and Safety Support Network (MHSSN) requested to be included as a co-submitter. This request was granted. On February 9, 1998, MHSSN, Worksafe! Southern California (WSC), the United Steelworkers of America (USWA), the United Auto Workers (UAW), and the Canadian Auto Workers (CAW), filed an addendum to the submission, subsequently modified on February 12,(2) which provided additional information on the health and safety issues raised in the original submission. This addendum was accepted, incorporated into the NAO review, and WSC, the USWA, the UAW, and the CAW were included as co-submitters.
Due to the complexity of the health and safety issues, which are being raised in this submission and reviewed under the NAALC for the first time, and the relatively late filing of the health and safety addendum, the NAO determined that health and safety issues would be reviewed separately from the original submission. The first report, which addressed the issues of freedom of association and the compliance by Mexico with its procedural obligations under the NAALC, was issued on April 28, 1998. The instant report focuses on the health and safety issues raised in the submission, which will be referred to hereinafter as Submission No. 9702 (II).
Submission No. 9702(II) raises issues of workplace safety and health at a truck chassis welding/assembly facility in Tijuana, Baja California, Mexico, owned by Han Young de Mexico, S.A. de C.V. (hereinafter Han Young). Han Young assembles chassis for Hyundai Precision America, a subsidiary of Hyundai Corporation of Korea. The submitters argue that Mexico is in violation of NAALC Article 3(1) in failing to enforce its Federal Labor Law protecting workers' safety and health through appropriate actions.
According to the submitters, beginning in April 1997, workers at the Han Young maquiladora plant in Tijuana, Baja California, Mexico, began to organize an independent union. The submitters state that the workers wanted a union to address issues of safety and health, job classifications and wage scales, low wages, annual bonuses, profit sharing, lack of dining facilities, and the lack of a company doctor in the plant. Among the health and safety concerns cited by the workers was the frequent occurrence of injuries such as burns and broken bones. They also expressed concern about respiratory illnesses, hearing loss, and loss of vision. The submitters assert that these problems were caused by the lack of compliance with government regulations and the failure to follow safety practices such as installing local exhaust ventilation, conducting periodic hazard identification and control, exposure monitoring, medical surveillance, health and safety training and other hazard control measures. The submitters also assert that the company failed to provide adequate personal protective equipment such as safety shoes, safety glasses, chemical-resistant gloves, respirators and face shields.
On June 16, in response to a request from the workers, a health and safety inspection of the factory was conducted by an inspector from the Inspectorate of Labor of the Secretariat of Labor and Social Welfare (Secretaría del Trabajo y Previsión Social, hereinafter STPS), in which forty-one health and safety violations were cited. Corrective action was ordered for twenty-three of these violations. The company was given from fifteen to twenty-five work days, depending on the violation, to remedy these deficiencies. The company was also cited, in this inspection, for failure to establish a joint health and safety committee, as required by law.
Following the inspection, a joint health and safety committee was established with three representatives each from labor and management. The submitters state that, for a brief period following the establishment of the committee, relations were cordial and Han Young agreed to a number of measures to improve health and safety conditions at the plant. However, when labor-management relations became acrimonious because of the independent union effort, the three worker representatives on the committee, who were also active in the union, were fired.
In July 1997, the WSC and the University of California, Los Angeles, Labor Occupational Safety and Health Program (LOSH) provided health and safety training to workers of Han Young in Tijuana to enable them to conduct an assessment of health and safety hazards at the facility. WSC and LOSH submitted their findings in a letter dated August 1, 1997, to the General Manager of Han Young.(3) WSC and LOSH also conducted a follow-up survey in November 1998, which indicated that many of the deficiencies identified in the June inspection remained unabated at that time.
On September 5, 1997, the Inspectorate of Labor conducted a follow-up safety and health inspection to verify compliance with the corrective measures mandated in the earlier inspection. The inspector found that six of the violations for which corrective action had been ordered remained unabated. According to the submitters, no fines were assessed against Han Young at that time.
The submitters report that in early January 1998 a number of workers narrowly averted serious injury when a hoist dropped a chassis and another hoist swung out of control. On January 23, a delegation of forty-five workers went to the office of the STPS and demanded a repeat safety inspection of the plant. An inspection was conducted on January 27 and it was reported, later in February, that a fine of approximately $9,000 was assessed against Han Young for safety and health violations.
The submitters argue that Mexico is in violation of NAALC Article 3(1) in failing to enforce its labor laws on safety and health in the workplace through appropriate actions. Specifically, they argue that Mexico is in violation of NAALC Article 3(1)(b) in not enforcing its law through "monitoring compliance and investigating suspected violations, including through on-site inspections;" and Article 3(1)(g) in not "initiating, in a timely manner, proceedings to seek appropriate sanctions or remedies for violations of its labor law." The submitters argue that Mexico has failed to enforce two parts of its labor laws, specifically:
(2) those laws that govern the formation and operation of the legally required workplace Health and Safety Committees at the plant level.
The submitters also argue that Mexico is not in compliance with Article 1 of the NAALC which establishes the objectives to which the Parties are committed, which include (a) improving the working conditions and living standards in each Party's territory; and (b) promoting, to the maximum extent possible, the labor principles set out in Annex 1. Annex 1 of the NAALC lays out eleven labor principles to which the Parties are committed, including the prevention of occupational injuries and illnesses.
The submitters request that the NAO undertake the following measures regarding safety and health violations:
2. upon completion of the review, recommend that the Secretary of Labor consult with her counterpart in Mexico on the matter;
3. should the violations remain uncorrected, request the convening of an Evaluation Committee of Experts (ECE);
4. should the recommendations of the ECE not be implemented, request further consultations; and
5. should the matter remain unresolved, request the convening of an arbitral panel.
In conducting its review, the NAO sought and obtained information from the submitters, the employer, Hyundai Precision America, and the Mexican NAO. A public hearing was held in San Diego, California, on February 18, 1998, at which the submitters, workers, employer representatives, and expert witnesses testified.
Following the filing of the submission on October 30, 1997, the submitters provided updates on developments at the plant up to and subsequent to the public hearing conducted on February 18, 1998.
The U.S. NAO addressed questions to the Mexican NAO on the health and safety issues raised in the submission, Mexican laws and regulations on health and safety and their implementation in letters dated February 10, 1997, February 25, 1997, April 28, 1998, and May 7, 1998.(4) The U.S. and Mexican NAOs also engaged in a number of consultations by telephone and fax as the case developed.
In a letter dated March 27, 1998, the Mexican NAO provided information on Mexican law and practice on safety and health in the workplace.(5) The Mexican NAO provided additional information in two letters dated March 30, 1998.(6)
Mr. Ho Young Lee, President of Han Young, responded in a letter dated February 12,1998, to a written inquiry from the NAO on the issues raised in the submission.(7) In his letter Mr. Lee stated that the company provides adequate safety and health equipment; and that the company has been inspected regularly by the safety and health authorities.
In a letter to the NAO dated March 3, 1998, Mr. Lee provided additional information on pay, benefits, and conditions at the plant, challenged some of the testimony presented at the hearing, and submitted supporting documentation.(8) According to Mr. Lee, Han Young has not had a serious accident in five years of operation, its safety and health conditions as well as wages are superior to those of comparable companies, and the company is prepared to recognize any union that demonstrates it has the support of 51% of the workers. Mr. Lee repeated that the company provides adequate personal protective equipment for workers.
Hyundai Precision America replied in writing on December 29, 1997,(9) to a letter from the U.S. NAO dated December 12, 1997, in which the NAO requested specific information about Han Young. The Hyundai response stated that Han Young is a supplier of that firm, but that Hyundai has no ownership or any management control over the company. On May 19, 1998, in a telephone conversation, Mr. Ted Chung, President of Hyundai Precision America provided information on efforts by his company to assist Han Young improve its compliance with safety and health standards, and supplemented this with written information by letter on May 20.(10)
The NAO conducted a public hearing on Submission No. 9702 in San Diego, California, on February 18, 1998. Notice of the hearing was published in the Federal Register on January 14, 1998.(11)
Twenty-seven employees of Han Young testified as to their experiences in the union organizing effort and on health and safety conditions in the plant. Seven additional witnesses, including U.S. experts on occupational safety and health, provided information on Mexican labor law and health and safety issues.
The General Manager of Han Young, Mr. Pablo Kang, spoke on behalf of his company. Counsel for Han Young testified on behalf of the company and on Mexican labor law as it applied to the case.
Mr. Eric Myers of the USWA read a prepared statement on behalf of George Becker, International President of the USWA.(12)
Part One of the NAALC lists the objectives to which the Parties commit themselves, including the promotion, to the maximum extent possible, of the labor principles set out in Annex 1. The ninth principle is the prevention of occupational injuries and illnesses, which commits the parties to "prescribing and implementing standards to minimize the causes of occupational injuries and illnesses."
Part Two of the NAALC sets out the obligations of the Parties. Article 3 (1) commits the Parties to effectively enforce their labor law through appropriate government action such as:
The Government of Mexico included improvements in the working environment as one of five priorities in its five year policy document entitled the Program for Employment, Training and the Defense of Labor Rights: 1995-2000 (Programa de Empleo, Capacitación y Defensa de los Derechos Laborales: 1995-2000).(13) This document states that the incidence rate of workplace illnesses and accidents had declined from 5.8 to 4.1 per 100 exposed workers between 1990 and 1995, compared to an incidence rate of two to three per 100 in developed countries. During 1995, 9.1 million workdays were reportedly lost due to temporary disabilities resulting from on-the-job illnesses and injuries, down from over 12 million in 1991. The rate of permanent disabilities reportedly suffered on the job increased, however, from 31.3 to 45 per 1000 exposures, and the rate of deaths increased slightly from 1.2 per 10,000 exposed workers to 1.3 from 1990 to 1995.(14)
In an effort to address safety and health problems, the Mexican Government undertook a number of initiatives. This included reforming the country's social security law, which covers disability due to workplace illnesses and accidents. This reform ties the payment of premiums to the fund directly to the individual company's accident rate, thereby providing an economic incentive to employers to improve workplace health and safety.
The Program for Employment also proposed to simplify the Federal Regulation on Safety, Health, and the Working Environment (Reglamento Federal de Seguridad, Higiene y Medio Ambiente de Trabajo, hereinafter RFSH) and improve compliance by both employers and workers. The new RFSH came into effect on April 21, 1997, and, for the first time, covers workers in forestry, agriculture and sawmills, as well as those working with agricultural equipment, pesticides and fertilizers.(15) These regulations also require employers to train workers on safety and health and inform them of work-related risks and hazards; strengthen protections for children and pregnant women; establish standards on biohazards, dangerous substances, and ergonomics; encourage the development and implementation of preventive occupational safety and health programs in enterprises; and authorize the establishment of "Private Verification Units" to provide technical assistance to businesses in the enforcement of occupational safety and health regulations.
Special inspection programs of certain industries are conducted as deemed appropriate, and have taken place in the sugar industry (1996 and 1998), the mining industry (1996 and 1998), and the maquiladora industry (1995 and 1997).(16) The STPS has also initiated a program of technical assistance and orientation for companies to improve compliance with labor standards in safety and health. These programs are based on voluntary cooperation and undertaken with the assistance of the National Commission for Workplace Health and Safety.(17)
The Mexican NAO also reported that, in an effort to disseminate information on health and safety standards in the workplace, seminars for over 350,000 workers were conducted during 1996 and 1997. Such programs were conducted in the steel, perfume and cosmetic, asbestos, sugar, automotive, export processing, electrical, construction, beverage, food and textile industries. These programs will continue through 1998.
In order to improve compliance, the STPS has entered into agreements with the various states. These agreements are consistent with the Government of Mexico's efforts to promote the roles of state and municipal governments in the enforcement of labor laws, in accordance with the country's National Development Plan: 1995-2000. Agreements with the state of Baja California, signed on February 19, 1998, provide for (1) improving the coordination of workplace health and safety inspections between the Federal and state governments; (2) improving coordination on the assessment and collection of fines resulting from violations of workplace health and safety rules; and (3) supervising and evaluating the agreement by an inter-governmental committee.
Mexican labor law in the private sector is codified as the Federal Labor Law (Ley Federal del Trabajo)(hereinafter FLL).(18) The law is enforced by the Secretariat of Labor and Social Welfare - STPS. Workplace inspections are carried out by the Inspectorate of Labor (Inspección del Trabajo) of the STPS and supported by the respective state governments. Article 541 of the FLL charges the Inspectorate of Labor with responsibility for supervising compliance with labor standards, including those protecting safety and health in the workplace.
The following FLL articles are relevant to the instant submission:
The Federal Regulation on Safety, Health and the Workplace-RFSH, establishes the rules and procedures for the enforcement of safety and health standards.(20) The RFSH is intended for application throughout Mexico and has as its purpose the establishment of measures necessary for the prevention of workplace accidents and illnesses. The objective of the RFSH is to ensure that work takes place under conditions of safety and health that are appropriate for workers and in accordance with the Federal Labor Law and international treaties ratified by Mexico.
The RFSH consists of six titles with 168 articles, namely Title One (general dispositions and obligations of employers and workers); Title Two (workplace safety standards); Title Three (workplace health); Title Four (workplace safety and health organizations); Title Five (protection for minors and pregnant or nursing women); and Title VI (compliance, inspections, and administrative sanctions).
Articles 165-167 of Title Six provide fines for specific violations of the regulation, ranging from 15 to 315 times the daily minimum wage prevailing in the area where the violation occurs, depending on the seriousness of the infraction. Article 168 states that the fines will be doubled if corrections are not undertaken within the time periods established by the inspectors.
RFSH Articles 3-13 address the development and enforcement of standards on the full range of safety and health issues. The standards are known as the Official Mexican Standards (Normas Oficiales Mexicanas), hereinafter NOMs. There are 122 NOMs which cover matters ranging from specific hazards to technical specifications for protective and monitoring equipment and analytical methods. The following NOMs were referred to by the inspectors in the instant case and are relevant to the submission: 01 (general), 02 (fire prevention), 04 (machinery safety), 06 (materials handling), 07 (installation and operation of railroads in the workplace), 09 (hazardous materials), 10 (chemical substances), 11 (hearing conservation), 16 (ventilation), 17 (personal protective equipment), 18 (showers and sanitation), 19 (plant level safety and health committee), 20 (plant medical services), 25 (lighting), and 27 (warning signs and notices).
Procedures for administrative actions conducted by the Federal Government, including workplace health and safety inspections, fines, and appeals, are established in the Federal Law on Administrative Procedures (Ley Federal de Procedimiento Administrativo), hereinafter LFPA. This law establishes procedures for enforcement actions by the executive branch of the Federal Government.
Articles 42-69 establish the procedures for the conduct of inspections and verification inspections. Article 70 of the LFPA states that administrative sanctions must be provided for in the respective laws and may consist of:
Article 71 states that in cases of repeated violations, a fine double the amount of the original fine shall be imposed, provided that the amount does not exceed double the amount of the maximum fine permitted.
Article 73 of the LFPA states that the administrative authority will determine the amount of the fine, taking into consideration:
Internal procedures for the conduct of inspections are included in the Internal Regulation of the Secretariat of Labor and Social Welfare (Reglamento Interior de la Secretaría del Trabajo y Previsión Social - RISTPS). The Federal Labor Inspection Regulation (Reglamento de Inspección Federal del Trabajo-RIFT)specifies the duties and responsibilities of inspectors and procedures for conducting inspections. RIFT Article 37 defines the kinds of inspections, including initial, periodic, and verification. Periodic inspections should be conducted at six month intervals, which frequency can be increased or decreased at the discretion of the authorities, the extent of hazards present in the workplace, and the past record of compliance or non-compliance by the establishment. Special inspections may be conducted at the request of interested parties.
The Regulation that Establishes the Procedures for the Application of Administrative Sanctions for Violations of the Federal Labor Law (Reglamento que Establece el Procedimiento para la Aplicación de Sanciones Administrativas por Violaciones a La Ley Federal del Trabajo - REPASA) provides specific guidelines for the assessment of penalties for violations of the laws and regulations on labor matters. Article 15 of the regulation provides the following guidelines for the assessment of fines:
The Mexican NAO provided detailed information on the process by which workplace inspections and the application of sanctions take place.(21) Inspections may be conducted by the local office of the STPS or by the state STPS. Inspection schedules are prepared jointly in advance in accordance with an annual program, but may also take place in response to requests of other government agencies or complaints by workers. Inspections must be authorized by the appropriate authority, but can take place without prior notice. However, access to the facility without prior notice is not obligatory in the absence of the employer or his legal representative. Therefore, in order to ensure the effectiveness and efficacy of an inspection, prior notice is usually given to ensure that access to the workplace will be obtained and that the required documentation and records will be made available to the inspector. The frequency of inspections may be increased in cases of workplaces where compliance has been a problem, and reduced in cases of workplaces that have demonstrated a positive record of compliance.
According to the Mexican NAO, a written report, prepared at the site and time of the inspection, specifies the violations encountered. It also provides a time period within which corrective action must be implemented for those items requiring corrective action. The report is filed with the Inspectorate of Labor for the region and a hearing before the local STPS office is scheduled. Usually, the respondent has fifteen days within which to appear before the authority. At the hearing, the respondent is given the opportunity to present evidence in his defense and in mitigation. The hearing officer determines whether a fine should be levied and the amount of the fine. Fines are based on the minimum wage in effect at the time and location where the infractions are committed, ranging from 15 to 315 times the daily minimum wage for each infraction.(22) The exact amount of the fine depends on the seriousness of the violations, special circumstances, the harm done to workers, the economic condition of the company, and other considerations. If the respondent fails to appear at the hearing, a judgement imposing the fine may be issued.(23)
A verification inspection is then conducted and confirms whether corrective action was implemented in accordance with the earlier inspection. A report on uncorrected violations is forwarded to the administrative authorities where the proceeding is the same as outlined above. If the respondent is found to have failed to abate the deficiencies, additional fines may be imposed. Fines may be imposed whenever a verification inspection shows that a violation remains unabated and will be doubled if the violation continues unabated.(24)
A respondent has the right to appeal any penalties by (1) requesting a review by the administrative authorities within fifteen days of the order imposing the penalty; (2) requesting the dismissal of the fine before the Federal Fiscal Tribunal (Tribunal Fiscal de la Federación) within forty-five days of the order imposing the penalty; and (3) through an amparo appeal in the appropriate court.(25)
Notwithstanding any of the above, if violations of safety and health laws and regulations persist in the workplace, the STPS may initiate procedures for a partial or complete closure of the facility. Labor inspectors themselves do not have the authority to impose fines or close a facility. This authority resides with the appropriate STPS office. Fines are collected by local offices of the Secretariat of the Treasury.(26)
According to the Mexican NAO, 1,093 workplace inspections were conducted in Baja California during 1997, and fines were imposed in 473 instances. In Mexico, over the same period, 52,500 workplace inspections were conducted. Fines were imposed on 17,395 businesses. In none of these cases was the workplace closed. These figures, however, are inclusive of the full range of inspections including child labor, minimum wage, and minimum standards as well as safety and health.
The RFSH established several health and safety institutions. These bodies are advisory and responsible for providing expert oversight and advice on health and safety matters. RFSH Articles 114-119 implement FLL Article 512-A and establish the National Consultative Committee for Workplace Health and Safety (La Comisión Consultiva Nacional de Seguridad e Higiene en el Trabajo), and Articles 120-122 implement FLL Article 512-B and create Consultative Committees for Workplace Safety and Health at the level of the states and the Federal District.
RFSH Articles 123-126 implement FLL Article 509 and provide for the establishment and functioning of Safety and Health Committees at the workplace. These committees must be established within thirty days after an establishment opens for business or after the RFSH came into effect. The duties of the workplace committees include the investigation of workplace accidents and illnesses, the supervision of compliance with the RFSH and the NOMS, and proposing preventive measures to management.
The International Labor Organization has developed and enacted a number of international conventions addressing occupational safety and health. Conventions Nos. 13, 27, 115, 120, 152, 155, 161, 167, and 170 have been ratified by Mexico. Conventions Nos. 120, 155, 161, and 170 are relevant to this submission.
Convention 120: Hygiene (Commerce and Offices), 1964, aims to provide for respect of elementary hygiene measures in all commercial and administrative establishments. The convention requires that commercial and administrative premises used by workers and the equipment in such premises be properly maintained and kept clean, and provides rules for ventilation, lighting, temperature, noise, washing and other facilities, sanitary conveniences, and first aid.
Convention 155: Occupational Safety and Health, 1981, aims to establish a national policy on occupational safety, occupational health and the working environment, and promote communications and cooperation at all levels in this area. The convention requires the parties to formulate, implement and periodically review a coherent national policy on occupational safety, occupational health and the working environment. Convention 155 applies to all branches of economic activity (with a few specific exclusions) and lays down a series of detailed provisions concerning action at the national level and at the level of the undertaking. The convention provides for the adoption of laws or regulations or any other appropriate method (including training), for the operation of a system of inspection and measures to be taken, and requires that employers shall be required to supply protective clothing and protective equipment to workers. Finally, the convention provides that workers and their representatives shall cooperate in the fulfillment of the obligations placed on the employer, but also provides that workers who remove themselves from a work situation where they have reasonable justification to believe they are in imminent and serious danger, shall be protected from undue consequences.
Convention No. 161: Occupational Health Services, 1985, aims to maintain safe, healthy, and well-adapted working environments to promote the physical and mental health of all workers by means of a preventive service. The convention calls for the establishment of occupational health services with preventive and advisory functions within the framework of a national policy. This policy should be developed through consultations with the most representative organizations of employers and workers. Safety and health services may be organized by undertakings or groups of undertakings, by public authorities or social security institutions, or by any other competent body. Employers, workers, and their representatives should cooperate and participate in the implementation of these services. The tasks of the services include the identification and assessment of risks from health hazards in the workplace by surveillance of the working environment and working practices, as well as workers' health in relation to work; technical advice; training and education; first aid; analysis of occupational accidents and diseases; and vocational rehabilitation.
Convention No. 170: Chemicals, 1990, aims to reduce the incidence of chemically induced illnesses and injuries at work. The convention calls for detailed regulations concerning classification systems of chemicals, their labeling and marking, chemical safety data sheets, and the responsibilities of suppliers and those of employers, particularly with regard to the identification of chemicals, their transfer and disposal, the exposure of workers, as well as information and training. Convention 170 provides that workers will cooperate with employer efforts in this regard, but also that they shall have the right to remove themselves from danger.
The ILO has reviewed safety and health issues in Mexico, particularly with regard to toxic gases and hazardous materials in the maquiladora sector, under Convention 155. In a 1995 report to the ILO, the Latin American Central of Workers (CLAT) reported cases of mass contamination of workers caused by the emission of poisonous gases derived from ammonia, hydrochloric acid, hydrofluoric acid, and leaks of toxic gases, ethyl alcohol and ammonia in the border maquiladora zone of Matamoros. The report also included information on cases of complications to workers health, cardiac arrest, and tumors caused by improper handling of toxic substances; cases of poisoning and failure to comply with occupational health standards which placed many workers and inhabitants in serious danger; and the death of a chemical engineer caused by poisoning. The CLAT also asserted that managers of some of the affected plants refused access to teams of experts specialized in gas escapes in the time immediately after the accidents.(27)
The Government of Mexico reported that it had initiated steps to improve compliance and that "[a]nnual regional inspection programmes have been carried out covering the various aspects of safety and health in assembly plants."(28)
This report was reviewed by the ILO's Committee of Experts on the Application of Conventions and Recommendations, which noted the Government of Mexico's comments that:
The Committee went on to state:
The matter was considered by the ILO Committee on the Application of Standards during the 1996 International Labour Conference. In its concluding comments, the Committee "noted that serious difficulties subsisted in the practical applications of the provisions of the Convention , in particular in certain regions of the country and in certain enterprises."(31) The Committee expressed its hope "that the Government would continue to deploy all necessary efforts in order to give full practical effect to the Convention's provisions and to improve occupational safety and health" and "requested the Government to supply in its forthcoming report complete and detailed information in order to guarantee a full evaluation of the situation and to be able to note substantive progress in the near future."(32)
The Government of Mexico reported to the Committee of Experts in 1998, and the Committee noted the adoption of the RFSH in January 1997, which unified various provisions of Mexican laws and regulations with regard to health and safety. The Government indicated that by promoting health and safety programs in workplaces it hoped to achieve a reduction in risks faced by workers, and that, in fact, labor statistics for 1996 appeared to confirm a reduction of risks for workers begun in 1995.(33) The Committee requested the Government to keep it informed "of any progress made with a view to ensuring that the Convention is applied, in particular in the maquiladora enterprises which were the subject of the observations made by the Latin American Central of Workers (CLAT) in 1995."(34)
Submission No. 9702(II) describes a workplace posing dangers to the health and safety of workers and where they were exposed to toxic airborne contaminants that threatened their long term health. These conditions remained unabated over a period of time, and continue largely unabated, despite repeated inspections by the Mexican government. The submitters ascribe this to the failure of the Government of Mexico to assess significant financial penalties for non-compliance against the employer.
Health and safety professionals provided expert input in the preparation of Submission 9702(II) and expert testimony at the public hearing, stating, that Han Young's chassis welding/assembly operation is considered a "high hazard" industry. In describing airborne contaminants, the submitters assert that "welding operations on mild carbon steel, such as those at Han Young, produce airborne concentrations of welding fumes, metal oxides, ozone and ultraviolet light, which are both irritating and toxic."(35) At the public hearing held on February 18, these expert witnesses on safety and health testified that personal protective equipment is insufficient for the protection of workers against airborne contaminants and that "the foremost control that should be exercised is engineering controls to eliminate altogether the exposure that these workers face."(36) Electrical and machine hazards at the plant were described as "life-threatening imminent danger hazards."(37)
Expert testimony was presented on a survey and training program that Worksafe! Southern California had conducted together with the University of California Los Angeles Labor Occupational Safety and Health Program. In this program, workers of Han Young were interviewed by safety and health professionals. Among the problems identified by workers were lack of access to material safety data or hazards communication; the lack of hazardous materials inventory or storage procedures; failure to consistently provide protective hoods and other personal protective equipment for workers engaged in welding; lack of ventilation; and the failure to conduct any hazard recognition and control assessment. According to one witness, the conditions described at Han Young and in other maquiladoras "pose an imminent health and safety hazard to the workers, and amputations, blindness, partial blindness, respiratory illnesses, cancer and death are just among a few of the types of illnesses and injuries that are very common in the maquiladora industry."(38)
Both workers and representatives of management testified at the public hearing conducted on February 18, 1998. The workers and other witnesses described the Han Young plant as a dangerous and unhealthy place to work. Workers complained of working in puddles of water with exposed electrical wiring. Mr. Armando Hernandez testified that:
Mr. Juan Meza Arroyo stated that:
Mr. Silvestre Rodriguez Reyes testified that: "We have to put in some pallets so that we won't have to step in the water, in the puddles of water."(41)
Union organizer Enrique Fernandez Feliz testified that:
Workers described the sanitary conditions in the restrooms as dismal with human waste floating on a floor covered with water from backed-up toilets and no toilet paper. Mr. Fernandez Feliz accompanied a labor inspector on one occasion. He testified that:
Mr. Armando Hernandez testified that:
Mr. Rodriguez Reyes testified that:
Airborne pollution in the plant was described as a serious problem. Mr. Fernandez Feliz testified that:
Mr. Meza Arroyo testified that:
Mr. Rodriguez Reyes testified that:
In particular workers complained about faulty cranes, in poor repair, which repeatedly dropped tractor trailer chassis while they were being worked on. On several occasions a crane disengaged and fell, with its load, within feet of workers, injuring at least one worker.(49) In describing an incident, Mr. Fernandez Feliz testified that:
Mr. Julian Puente Martinez described an accident in which he was injured:
Mr. Adalberto Aguilar Puentes testified that:
Additionally, the workers complained of inadequate work gear such as shoes, gloves and other necessary protective clothing. Mr. Hernandez testified that:
Mr. Rodriguez Reyes said that:
Mr. Reyes went on to testify that:
Mr. Fernando Flores Cruz, commenting on workplace inspections, testified that:
Han Young management challenged allegations of poor safety and health conditions in letters addressed to the U.S. NAO prior to and following the February 18 hearing, as well as in testimony during the hearing. At the hearing, Mr. Pablo Kang, General Manager of Han Young, generally denied that health and safety risks existed at the plant. Mr. Kang displayed new shoes, masks, and other personal protective equipment which he claimed were regularly provided to workers, as well as signed chits acknowledging receipt of the equipment by workers. In addition to Mr. Kang's testimony, Han Young submitted to the U.S. NAO photographs of restrooms described as the ones available to workers. These photographs show clean restrooms in contrast to the description of the facilities as described in the submission and by the workers in their testimony.
Although the testimony is conflictive and the NAO does not have the benefit of a first hand inspection of the facility, the workers' version of conditions in the plant is supported by reports of inspectors of the Mexican Government. In response to workers' complaints, a safety and health inspection of Han Young was conducted by the local office of the Federal Inspectorate of Labor on June 16, 1997. Forty-six health and safety violations were identified. Violations included inadequate ventilation, electrical hazards, unsafe materials handling, unregistered compressed gas tanks, lack of personal protective equipment for workers, absence of a noise control program and lack of sufficient fire extinguishers. The same inspection identified administrative shortcomings which included the failure to establish an organized health and safety committee; failure to implement a health and safety program; no record of health and safety inspections by the committee; lack of an accident contingency plan; no written safety program; and no approved plans for safety and health training. Specific action to correct twenty-three deficiencies was ordered. These included the implementation of a program for the measurement of airborne contaminants; the preparation of a fire hazards survey; the installation of safety devices on cranes; the provision of personal protective equipment to workers; a review of plant lighting; installation of showers and toilet facilities for workers; installation of adequate local exhaust systems; installation of emergency lights; installation of audible and visible fire alarms; and correction of electrical hazards.
At a subsequent hearing before the local office of the Secretariat of Labor, the employer produced documents and evidence which brought it into compliance with some, but not all, of the violations. On November 28, 1997, fines totaling approximately U.S. $7000 were assessed against the company for the following violations found in the June 16 inspection:
A verification inspection was conducted on September 5, 1997. This inspection revealed that the company failed to undertake corrective action on six violations.(58) Fines in the amount of approximately U.S. $2400 were assessed against the company on November 28, 1997 for the following violations:
In the order assessing the penalties, it was noted that the company had produced documentation or taken corrective action that brought it into compliance with regard to the other violations noted in the verification inspection report. The order failed to explain, however, why no fine was levied or other action taken for the failure to install exhaust systems and to conduct an evaluation of lighting levels. Han Young did purchase exhaust fans but had not yet installed them at the time of the verification inspection. It can be inferred that the company was given the benefit of the doubt and a grace period within which to complete the installation. The NAO has been unable to ascertain, however, if any of the fines summarized above have been collected or if the company has appealed the government's findings, or if the cases have been otherwise dismissed. At the public hearing, Mr. Pablo Kang, General Manager of Han Young, did not acknowledge when asked, that the company had ever been fined.(59)
The orders assessing the penalties following the two inspections directed that they be paid within thirty days. Further, both orders stated that the failure to abate would result in the application of LPFA Article 71, which calls for doubling the fines in such cases.
Another safety and health inspection was conducted on January 27, 1998, following renewed complaints by workers. On this occasion, the inspection was conducted by inspectors of the state of Baja California.(60) Twenty-six violations of safety and health regulations and standards were identified in this inspection. The inspector's report notes that this was the eleventh inspection conducted of the plant. Nevertheless, such serious violations were identified as electrical cables running through puddles of water; inadequate ventilation; inadequate lighting; dangerous materials handling and loading; inadequate preventive maintenance on moving cranes; absence of emergency lighting; inadequate sanitation facilities; lack of potable water; and absence of a health and safety committee. Sixteen of the violations included in the January report had been first identified in the June report and corrective action had been specifically directed on seven of the violations. The inspector considered the problems with the moving crane and the electrical cables to be especially dangerous. Yet both of these violations remained unabated since at least the inspection conducted on June 16, 1997. The report further indicated that smoke extractors were completely lacking in some areas. This, too, had been identified in the June 1997 inspection.
A verification inspection of the January 27 inspection was conducted on March 20. The information on the verification inspection made available to the NAO is insufficient to permit an adequate review.
Yet another inspection was conducted on March 25, 1998. Fourteen violations were cited and corrective action was ordered on another eleven items. The inspection report noted that Han Young had finally conducted an evaluation study to measure airborne contaminants, but had still failed to install the necessary extractors. The inspection report cited the company for fire prevention violations, failure to report eight workplace accidents, and the absence of procedures for handling hazardous, inflammable, and explosive materials. The inspector directed the company to repair damaged welding cables, repair the building structure to prevent water from leaking in, and install potable water bottles. The inspector further directed the company to install safety devices and alarms on moving cranes and make necessary repairs. Most of these violations were cited in the June 16, 1997, report and remained unabated eight months later.
In his letter dated May 20, 1998, as well as in a telephone conversation on May 19, Mr. Ted Chung, President of Hyundai Precision America, stated that Hyundai has worked closely with Han Young in an effort to improve the health and safety conditions at the plant. Mr. Chung indicated that Hyundai had undertaken corrective action on a number of the safety and health deficiencies identified at the plant, including ventilation, the problems with the cranes, plant lighting levels, and exposed gas lines and electrical cables. The submitters assert, however, that while Hyundai's efforts have resulted in some improvements, they are insufficient to remedy the major problems of safety and health at the plant. They maintain that the plant still lacks adequate ventilation, the cranes have only been partially repaired when they require replacement and still pose an imminent danger, and that problems with exposed cables, gas lines, and other hazards continue.
FLL Article 509 requires workplaces to establish joint health and safety committees composed of equal representation from management and workers. The failure to have such a committee at Han Young was cited in the inspection reports of June 16, 1997 and January 17, 1998. Apparently, such a committee was constituted and functioned briefly following the June 16 inspection. However, all three worker representatives on the committee were dismissed by the company in October 1997. The March 25 report indicates that the committee was not re-established until January 28, 1998. These dismissals, and the delay in reconstituting the joint committee, would necessarily have had a chilling effect on the workers' efforts to improve the health and safety conditions under which they worked, especially in view of the strained relationship between the workers and management prevailing at the time.
The practice of giving advance notice, albeit of only one day, of impending inspections calls into questions their efficacy. With this qualification, the actions of the Inspectorate of Labor in its conduct of the inspection of June 16 and the verification inspection of September 5 appear to have been consistent with Mexican laws and regulations. The fines imposed following both inspections were also in accordance with Mexico's health and safety laws and regulations, ranging from 100 to 315 times the daily minimum wage for Baja California at the time. The sole exception is the failure to assess a financial penalty for the infraction involving plant lighting. The NAO has been unable, however, to verify if the fines were actually collected. Payment of fines is made to local offices of the Secretariat of the Treasury in the jurisdiction where the infractor is domiciled, in this case the state of Baja California. As reported earlier, Mexico has initiated efforts to improve coordination among state and federal entities in the assessment and enforcement of financial penalties.
As reported earlier, the NAO was unable to evaluate the March 20 inspection due to a lack of information. It appears that the January 27 and the March 25 inspections were, for the most part, detailed, thorough, and consistent with laws, regulations, and procedures, with the exception of some inconsistencies and shortcomings as noted below. However, the NAO has been unable to obtain information on financial penalties, if any, imposed and collected as a result of the inspections conducted on January 27, March 20 and March 25. These inspections found serious violations of health and safety regulations, many of which have existed since at least June 1997, and probably earlier. These violations would have merited significant penalties and could have been doubled in the cases of unabated deficiencies, in accordance with LPFA Article 71, FLL 994 V, and RFSH Article 168. Further, the LFPA allows for the imposition of fines for every day in which an infraction persists.(61) The intention of such increments in the assessment of financial penalties in the case of unabated violations is deterrence. Deterrence will only be effective if such penalties are enforced.
Several gaps and inconsistencies appear in the inspections conducted of Han Young. Items noted as abated in earlier inspections were cited again in later inspections. For example, problems with overhead cranes were cited in the June 16 report, noted as abated in the September 5 verification report, and cited again in the January 27 and March 25 reports. The same is true for electrical hazards, alarm devices, and other deficiencies identified in the various inspections. Finally, it should be noted that health and safety problems identified by workers were not cited in some of the inspection reports. These included no access to material safety data sheets, excessive heat, and the infrequent replacement of personal protective equipment such as respirators, leather head coverings, leather leg coverings, face shields, and leather gloves.
There may be several explanations for these inconsistencies, including different inspectors with different routines at different times, a return to non-compliance after a deficiency was abated, the installation of new or different equipment, possible omissions and oversights by the inspectors, and finally, different perceptions on hazards by workers and inspectors. The information available to the NAO is insufficient to draw conclusions. These are significant, however, insofar as the failure to abate violations is subject to significant increases in penalties under Mexican law, as in the United States. If inspections are not identifying and citing the failure to abate violations, some of the deterrent effect of sanctions is lost.
A question is also raised on the conduct of verification inspections. It is apparent from reviewing the inspection reports of the Han Young facility, that initial inspections address two categories of violations: (1) items which are found to be in violation and for which the employer will be assessed a penalty if not successfully challenged; and (2) items for which corrective action is ordered for which he will be assessed a penalty if corrective action is not undertaken. The verification inspections for Han Young addressed only the second category, specifically those items for which corrective action had been ordered. Thus, an item found in violation during an initial inspection which was not reviewed in the verification inspection may remain unabated without incurring an additional penalty. This, again, raises the problem of the efficacy of the deterrent effect of penalties for the failure to abate deficiencies.
A review of the available information indicates some progress in rectifying a number of long standing health and safety deficiencies at the plant. The joint health and safety committee was reconstituted and was available to accompany the inspector during the March 25 inspection. Compressed gas tanks were properly registered and inspected in accordance with regulations. The company did contract with a private company which conducted evaluation studies of airborne contaminants and noise pollution and procedures for stacking and unstacking materials had been prepared. The first aid kit was found to be complete and in compliance with regulations for a plant of this type and size. The company had prepared written procedures for the installation, operation, and maintenance of machinery as well as safety procedures for their operation. Han Young also began providing personal protective equipment to its employees, though not of the quality or in the quantity that the workers say they need.
Despite the efforts by Hyundai Precision America to rectify some of the more serious hazards at the plant, significant problems remain. Though Hyundai installed eight exhaust fans, airborne contamination remains a problem. With regard to electrical hazards, one inspection report indicates that exposed welding cables continued to pose a hazard even after Hyundai had undertaken some maintenance and repair. Water continues to leak into the plant. Though lighting was improved by installing additional lights and cleaning the skylight, this will require ongoing maintenance from the company, which is a questionable prospect given past performance. The condition of the cranes remains uncertain. The company failed to report eight workplace accidents to the authorities. No written procedures for handling hazardous materials, inflammable substances, and explosives have been developed and implemented and there was no inventory of hazardous materials and dangerous work. Potable water was still not available to workers.
The information from expert witnesses, workers and inspection reports is consistent and credible in describing a workplace polluted with toxic airborne contaminants, strewn with electrical cables running through puddles of water, operating with poorly maintained and unsafe machinery, and with numerous other violations and omissions of minimum safety and health standards. This workplace was severely lacking in adequate sanitation facilities for workers to relieve themselves and bathe in minimally acceptable hygienic conditions or even get a drink of water. These problems and shortcomings had been identified since at least June 1997, and serious issues as to their abatement remain. Corrective action to remedy some of the major problems was undertaken only at the initiative of Hyundai Precision America, and there are no assurances that these will be maintained with any consistency, if at all.
The information available indicates that Han Young was subjected to eleven safety and health inspections over the years since it began operations in 1993. At least four inspections took place since June 16, 1997. This date follows shortly the enactment of new safety and health regulations in April 1997. Four inspections in the space of one year is substantial. Notwithstanding repeat inspections, however, serious unabated violations were allowed to continue over this entire period. These hazards undoubtedly existed before June 16 and pose imminent short term as well as long term dangers to the health and safety of workers in the plant. Though fines in the amount of $9400 were assessed against the company, there is no information as to whether the fines were actually collected or if the cases were otherwise disposed of. The NAO has been unable to ascertain if financial penalties were assessed and collected for the violations identified in the subsequent inspections.
The health and safety conditions reviewed here should be viewed in the context of the workers' efforts to organize an independent union at Han Young as reported by the NAO on March 28, 1998.(62) Though a union at Han Young had been in existence since the plant began operations in 1993, there is nothing to indicate that it undertook any efforts to address the conditions that have been described. This failure to act on safety and health problems was one of several reasons that prompted workers at the plant to seek representation by a union that would more effectively represent their interests. However, of immediate concern to the NAO is the effectiveness of the inspection and sanctions process in Mexico to enforce compliance in regard to workplace health and safety. Inspections, in and of themselves, are not sufficient to deter an employer determined to violate or ignore the law. However, regular inspections combined with the certainty of the imposition of significant, incremental, and ongoing financial penalties, have a demonstrated record of promoting compliance.
The NAO makes the following findings:
1. By enacting a new Federal Regulation on Safety, Health, and the Workplace in April 1997, Mexico has undertaken a serious effort to improve the enforcement of safety and health in the workplace.
2. The company in question was subjected to thorough and repeated inspections by Federal and state authorities. Nevertheless, a number of questions have been raised with regard to the efficacy of inspections. Further, despite these efforts, serious hazards continued unabated at the plant.
3. The fines totaling approximately $9400 that were assessed against Han Young were substantial provided they were enforced. The doubling of these fines, as provided for by the law, for unabated violations would arguably have had a significant deterrent effect, even more so if they were again doubled and enforced as appropriate. The NAO, however, has been unable to ascertain if these sanctions were applied in the case of Han Young, in accordance with Mexican law, and what, if any, further action is contemplated by the Mexican authorities to seek compliance in the case.
4. A major instrument to ensure compliance with workplace health and safety regulations is the deterrent effect afforded by the conduct of comprehensive periodic inspections combined with the certainty of the assessment of significant financial penalties against violators. This deterrent effect is lost if penalties are not enforced. Additional information on the process for conducting inspections and assessing, increasing, and collecting financial penalties would enable a more thorough evaluation of the matter.
Given these considerations, including consultations at the ministerial level on these safety and health issues would further the objectives of the NAALC. Consultations on safety and health should discuss (1) the final disposition and/or current status of the health and safety cases involving Han Young de Mexico, S.A. de C.V.; (2) the status of efforts by the Government of Mexico to enforce compliance with that country's health and safety laws and regulations through the implementation of the Federal Regulation on Safety, Health and the Workplace; and (3) discussion of the process by which workplace inspections are conducted and the process by which financial penalties are imposed, escalated, and collected.
Accordingly, the NAO recommends that pursuant to Article 22 of the NAALC, ministerial consultations on NAO Submission No. 9702 include the safety and health issues raised.
August 11, 1998
1. Submission to the United States National Administrative Office (NAO), The Case of Han Young de México, S.A. de C.V. in Tijuana, Mexico, October 28, 1997.
2. Modified Addendum to NAO Submission No. 9702, February 12, 1998.
3. On file with the U.S. NAO.
4. On file with the U.S. NAO.
5. On file with the U.S. NAO.
6. On file with the U.S. NAO.
7. Letter from Ho Young Lee, President of Han Young de Mexico, S.A. de C.V., to the U.S. NAO, (February 12, 1998), (on file with the U.S. NAO).
8. On file with the U.S. NAO.
9. On file with the U.S. NAO.
10. On file with the U.S. NAO.
11. 63 Fed. Reg. 2266-2267 (1998).
12. On file with the U.S. NAO.
13. Poder Ejecutivo Federal, Programa de Empleo, Capacitación y Defensa de los Derechos Laborales: 1995-2000, Secretaría del Trabajo y Previsión Social, México, 1996.
14. Ibid., pp. 68-69.
15. All references in the instant report are to the RFSH that entered into effect on April 21, 1997.
16. Letter from Mexican NAO dated March 27, 1998.
18. Federal Labor Law, (as amended through December, 1995) (Ormond Beach, Florida, Foreign Tax Law Publishers, Inc., trans.). This English translation of the FLL is used throughout this report.
19. Article 527 lists industrial sectors and specific businesses which come under Federal jurisdiction under the FLL. As a maquiladora, Han Young comes under the jurisdiction of the state authorities.
20. The RFSH replaced several previous laws on safety and health and came into effect on April 21, 1997.
21. Mexican NAO letter dated March 27, 1998. The letter provides information on the implementation of FLL, the LPFA, RFSH, the RISTPS, the REPASA, and the RIFT.
22. FLL Article 994, RFSH Articles 165-167.
23. REPASA Article 7(h).
24. LFPA Articles 70-71; FLL Article 512D; RFSH Article 168.
25. An amparo is the legal instrument by which a person or legal entity seeks the protection of the courts against violations of constitutional protections by government authorities or their agents.
26. Mexican NAO letter dated March 27, 1998.
27. International Labour Conference, 83rd Session, Report III (Part 4A), Report of the Committee of Experts on the Application of Conventions and Recommendations, (Geneva, International Labour Office, 1996), pp. 383-384.
28. Ibid., p. 384.
31. International Labour Conference, Provisional Record, 83rd Session, Third Item on the Agenda: Information and Reports on the Application of Conventions and Recommendations, Report of the Committee on the Application of Conventions and Recommendations, (Geneva, International Labour Office, 1996), Part Two (I)(B), p. 14/109.
33. International Labour Conference, 83rd Session, Report III (Part 4A), Report of the Committee of Experts on the Application of Conventions and Recommendations, (Geneva, International Labour Office, 1998), p. 451.
34. Ibid., p. 452.
35. Addendum to NAO Submission No. 9702, p. 12.
36. U.S. Department of Labor, Bureau of International Labor Affairs, U.S. National Administrative Office, Public Hearing on Submission No. 9702, testimony of Garrett Brown, pp. 154-155. The native Spanish speakers testified in Spanish with simultaneous interpretation provided.
37. Ibid., p. 137.
38. Ibid., testimony of Marta Segura, pp. 186-187.
39. Ibid., p. 57.
40. Ibid., p. 88.
41. Ibid., p. 90.
42. Ibid., p. 120.
43. Ibid., p. 121.
44. Ibid., p. 56.
45. Ibid., p. 97.
46. Ibid. p. 120.
47. Ibid., p. 88.
48. Ibid., p. 97.
49. On January 8, 1998, the submitters allege that five workers narrowly missed being killed or seriously injured when an overhead crane dropped an entire chassis that weighed more than a ton onto the shop floor. (NAO Submission No. 9702(II), p. 13).
50. Public Hearing on Submission No. 9702, pp. 129-120.
51. Ibid., p. 174.
52. Ibid., p. 158.
53. Ibid., p. 56.
54. Ibid., p. 90.
55. Ibid., p. 97.
56. Ibid., p. 103.
57. The daily minimum wage in effect for the state of Baja California at the time was Pesos 26.45 ($3.31).
58. Copies of the inspection results are on file with the U.S. NAO.
59. Public Hearing on Submission No. 9702, p. 38.
60. In a letter of March 30, 1998, the Mexican NAO informed the U.S. NAO of the signing of an agreement on February 19, 1998 between the Federal Secretariat of Labor and Social Welfare and the state government of Baja California which established a framework for cooperation and coordination in the enforcement of health and safety laws. Though state inspectors will conduct inspections of workplaces under state jurisdiction, these will be coordinated with and assisted by officials of the Federal government.
61. The STPS regulations, apparently, do not have this provision though it is unclear if the STPS could impose daily fines if it chose to do so.
62. U.S. Department of Labor, Bureau of International Labor Affairs, National Administrative Office, Public Report of Review of Submission No. 9702 (1998).