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Hansae under observation for systematic labour violations


South Korea's Hansae, one of the world's largest apparel manufacturers, has been placed under observation by Norway's Central Bank for systematic violations of human rights in a number of its factories in Vietnam.

Norges Bank, or the Central Bank, has placed Hansae Yes24 Holdings and its subsidiary Hansae Co Ltd under observation for breaching the 'Guidelines for observation and exclusion from the Government Pension Fund Global' adopted by the Ministry of Finance in December 2014.

Hansae is one of around 9,000 listed companies under the Bank's Pension Fund, which is worth around US$900bn. It follows a recommendation last month from The Council on Ethics that the company be excluded from the fund for its violations.

One of the largest in the world, the Pension Fund is managed by Norges Bank. The Council of Ethics, as an advisor to the bank, assesses companies within the portfolio and whether their activities breach the fund. This assessment falls under three categories: whether they are involved in serious or systematic human rights violations; whether they cause severe environmental damage; or whether they are involved in gross corruption.

Hansae, which owns garment manufacturing facilities in a number of countries, including South Korea, China, Indonesia, the US-controlled Northern Mariana Islands and Nicaragua, was found to have been violating human rights at several of its Vietnam factories for some time, and that it had not previously proved itself capable of generating lasting improvements in working conditions.

Specifically, the recommendation for exclusion from The Council of Ethics, stated numerous violations of statutory health and safety provisions including overwork leading to workers fainting at their sewing machines, restrictions on employees use of toilet facilities, as well as harassment, deficient fire safety precautions, forced overtime, illegal restrictions on sick leave, unfair dismissal, discrimination and a lack of freedom of association. These violations were found to be taking place at several of Hansae Vietnam's factories, as well as at the company's subsidiary Costec in Myanmar.

The Council works in collaboration with the Fair Labor Association (FLA) and the Workers Rights Consortium (WRC) on its assessments, and in this case uncovered 81 violations of the guidelines.

Consequently, Hansae Vietnam has been ordered to implement around 250 measures via a corrective action plan. According to the FLA, the company has already carried out many measures, with more scheduled for implementation this year. This has included appointing new management at Hansae Vietnam and performing monthly self-audits, the results of which are evaluated and improvements measured.

On that basis, the Ba