South Carolina-based Anderson Hardwood Floors formally announced in January 2012 that it had been violating Canadian law by exporting products partly manufactured by prisoners into Canada for the past 15 years. The announcement implicitly means the company also violated U.S. law by failing to clearly label the goods as being produced using prisoner labor.
Anderson, a division of Shaw Industries Group, which is owned by Warren Buffet’s Berkshire Hathaway, Inc., wrote a memo to its customers advising them that “After 15 years of selling Anderson products in Canada, it only recently came to our attention that by bringing those products with prison inputs into Canada, Anderson was in contravention of Canada Border Services Agency (CBSA) Memorandum D9-1-6. This was discovered by the Shaw Export Department and was immediately voluntarily disclosed to the CBSA. As a result, Shaw/Anderson immediately and voluntarily stopped all shipments with any [prison-made] content into Canada.”
Canadian border officials were unaware of the violation until after the disclosure, but Anderson was still required to comply with U.S. law. Under the Ashurst-Sumners Act, 18 U.S.C. §§ 1761-62, it is illegal to ship goods made using prison labor across state lines unless they are clearly marked with “the names and addresses of shipper and consignee, the nature of the contents, and the name and location of the penal or reformatory institution where produced.” Other requirements for products made by prisoners for sale in interstate commerce are governed by the Prison Industry Enhancement Certification Program (PIECP).
“One provision PIECP participants are required to follow is that ‘all prison made products should be clearly labeled,’” noted prison industry expert Bob Sloan. “So obviously, if they shipped products for that long and it was caught by an internal audit, they weren’t in compliance with federally required labeling requirements.”
Anderson’s disclosure demonstrates the lack of regulation in U.S. prison industry programs. Oversight of PIECP was transferred in 1995 to the Department of Justice’s Bureau of Justice Assistance, which provides funding to the National Correctional Industries Association (NCIA), a private trade organization.
“NCIA is made up of a membership comprised of individuals and administrators representing thirty-seven state prison industries, companies that supply raw materials to them, and companies using inmate labor for manufacturing,” Sloan said. “They serve as the policy and technical assistance arm for the program, and as such, they conduct initial and continued compliance with PIECP requirements, investigate all complaints and determine changes in policy to this federal program. With a board consisting of top state prison industry officials controlling oversight and policy, there is virtually no federal oversight of the program. The ‘fox guarding the hen house’ scenario is an apt description of this government/private association partnership.” [See: PLN, March 2010, p.1].
Laws barring the importation of prison-manufactured goods are not unusual, and indeed the U.S. has its own law that prohibits products made using prison labor in other countries. Aside from having to cease exportation of its prisoner-made flooring to Canada, Scott Sandlin, a vice president for Shaw Industries Group, said the company “is not anticipating any penalties or fines related to this issue.”
“The way it’s characterized and the way I’ve seen it characterized in some of the media releases is that this is tantamount to slave labor. It’s not,” said Jeff Levin, counsel for the Coalition for American Hardwood Parity (CAHP). “This is a federally statutory program. The workers are paid a prevailing wage.” Anderson is a founding member of CAHP.
Although prisoners employed in PIECP programs are supposed to receive prevailing wages by statute, in practice they are paid minimum wage – which is subject to deductions of up to 80% for room and board, victim restitution, taxes, contributions to a mandatory savings account, etc.
State prisoners at the Northeast Correctional Complex in Tennessee and at the Allendale and Tyger River Correctional Institutions in South Carolina produce hardwood flooring for Anderson.
Another company, Mannington Wood Floors, also announced in January 2012 that it had stopped shipping goods produced using prison labor to Canada. According to Betsy Amoroso, Mannington’s director of corporate communications, the products made by prisoners represent “a small percentage of what is sold into Canada.” She added the company had “ceased shipment as soon as we became aware of the situation.”
Sources: Wall Street Journal, Bloomberg News, www.hardwoodfloorsmag.com
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