“Organic” Food From China Found To Be Highly Contaminated

Food imported from China and labeled “organic” is anything but.

Chinese Market

With more and more people learning about the importance of eating healthy and safe produce, consumer demand for all things “organic” has skyrocketed. In the US alone, annual organic food sales have grown by 20% and the increased demand is significantly outpacing domestic supplies, forcing many grocers and food vendors to look internationally to keep their businesses stocked. Most of these organic imports are grown in the European Union, where organic standards are weaker than those of the US. However, many of these “organic” products are from China, whose food industry standards for safety and quality are notoriously low. Much of this “organic” produce grown in China is so unsafe, that the farmers who grow it won’t eat it themselves. Isn’t that the whole point of choosing organic in the first place?

It turns out that much of the food labelled “organic” was never grown with the intention of being organic, but rather as a means to circumvent China’s reputation for substandard produce. US Customs personnel often reject entire shipments of food from China due to the addition of dangerous and unsavory additives, the presence of drug residues, mislabeling, or the poor hygienic state of the food. In an effort to get around these bulk rejections of food, some Chinese food exporters have taken to labeling their products “organic,” especially those foods that appear dirty or unusual. In addition, the “organic” label in China has no meaning as collusion between the government and manufacturers has led to rampant mislabeling, and China’s government has no established system for determining what is or is not organic.
Chinese Fish Master

Dead fish being removed after a fertilizer factory dumped huge amounts of ammonia into the Fu river Credit – NYT

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Costco Faces Lawsuit over Sale of Prawns Allegedly Farmed by Slave Labor

Costco Faces Lawsuit over Sale of Prawns Allegedly Farmed by Slave Labor

Costco Wholesale Corp. customer sued the retailer on allegations that it knowingly sold frozen prawns that were the product of slave labor. Read more of this post

Wal-Mart warns suppliers on stricter measures

Made in Bangladesh

Associated Press
This photo illustration made Wednesday, Dec. 12, 2012, shows the label of a garment made in Bangladesh displayed outside the Wal-Mart store where it’s sold, in Atlanta. Wal-Mart Stores Inc. is alerting its global suppliers that it will immediately drop them if they subcontract their work to factories that haven’t been authorized by the discounter. (AP Photo/David Goldman)

By ANNE D’INNOCENZIO The Associated Press

BENTONVILLE, Ark. —

Wal-Mart Stores Inc. has alerted its global suppliers that it will immediately drop them if they subcontract their work to factories that haven’t been authorized by the discounter.

Wal-Mart’s stricter contracting rule, along with other changes to its policy, comes amid increasing calls for better safety oversight after a deadly fire at a Bangladesh factory that supplied clothing to Wal-Mart and other retailers. The fire in late November killed 112 workers at a factory owned by Tazreen Fashions Ltd. Wal-Mart has said the factory wasn’t authorized to make its clothes.

In a letter sent Tuesday to suppliers of its Wal-Mart stores as well as Sam’s Clubs in the U.S., Canada and the United Kingdom, the company says it will adopt a “zero tolerance” policy on subcontracting without the company’s knowledge, effective March. 1. Previously, suppliers had three chances to rectify mistakes.

Wal-Mart also said it plans to publish on its corporate website a list of factories that haven’t been authorized to manufacture goods for Wal-Mart.

Also, starting June 1, suppliers must have an employee stationed in countries where they subcontract to ensure compliance, rather than relying on third-party agents.

“We want the right accountability and ownership to be in the hands of the suppliers,” said Rajan Kamalanathan, Wal-Mart’s vice president of ethical sourcing, said in an interview with The Associated Press. “We are placing our orders in good faith.”

Wal-Mart will hold a meeting for clothing suppliers from the U.S. and Canada on Thursday to explain the new policy changes.

Kamalanathan said Wal-Mart is looking to create a fund that factories can tao to improve safety, but that is still in discussion. But he also said local governments and other suppliers and retailers have to do their part in boosting factory safety.

Critics quickly dismissed Wal-Mart’s moves as inadequate and said that the retailer needs to do more.

“It shows that Wal-Mart is feeling a great deal of pressure in the wake of public scrutiny,” said Scott Nova, executive director at Workers’ Rights Consortium, a labor-backed advocacy group. But he noted the company’s response isn’t adequate unless Wal-Mart and others pay their suppliers more so they can cover the costs of repairs.

“The upfront commitment from brands and retailers is essential if we are going to see real change,” Nova added.

Nova’s group is one of several organizations trying to get retailers and brands to sign a first-of-its-kind contract that would govern fire-safety inspections at thousands of Bangladeshi factories making T-shirts, blazers, and other clothes Americans covet.

The contract would call for companies to publicly report fire hazards at factories, pay factory owners more to make repairs and provide at least $500,000 over two years for the effort. They would also sign a legally binding agreement that would make them liable when there’s a factory fire.

PVH Corp., a New York City-based company that sells the Calvin Klein and Tommy Hilfiger brands, last March signed the agreement after a national TV news report that chronicled the dangerous conditions in one of its Bangladesh factories. But PVH pledged to start the program only if at least three other major retailers sign on. So far, only one has: A German coffee chain named Tchibo that also sells clothes. Nova said that his organization is in discussion with other retailers.

Wal-Mart says it has no plans to sign on to the contract. Brooke Buchanan, a Wal-Mart spokeswoman, says that the company can make a “positive impact on our global supply chain by both by raising our own standards and by partnering with other stakeholders to improve the standards for workers across the industry.”

Nova also noted that Wal-Mart needs to disclose a list of all the suppliers it currently works with so they can be monitored by independent groups. It also needs to disclose the results of all its factory inspections.

Richard Locke, head of political science at MIT and an expert in global supply chains, said that Wal-Mart also needs to re-evaluate its purchasing practices so its demands are not putting excessive pressure on factories to cut corners on safety. It also needs to provide better technical assistant training for factories so they can run their businesses better.

Wal-Mart ranks second behind Swedish fast fashion retailer H&M in the number of clothing orders it places in Bangladesh. Before the fatal fire there, Wal-Mart had taken steps to address safety, such as mandating fire safety training for all levels of factory management.

Building fires have led to more than 600 garment work deaths in Bangladesh since 2005, according to research by the advocacy group International Labor Rights Forum.

Copyright The Associated Press

Disney, Sears, Wal-Mart, Sean Combs used factory in Horrific Bangladesh fire

Bangladeshi women watch the bodies of some of the victims of Saturday’s fire in a garment factory being prepared to be buried, in Dhaka, Bangladesh

AP Exclusive

DHAKA, Bangladesh (AP) — Amid the ash, broken glass and melted sewing machines at what is left of the Tazreen Fashions Ltd.factory, there are piles of blue, red and off-white children’s shorts bearing Wal-Mart’s Faded Glory brand. Shorts from hip-hop star Sean Combs’ ENYCE label lay on the floor and are stacked in cartons.

An Associated Press reporter searching the factory Wednesday found these and other clothes, including sweaters from the French company Teddy Smith, among the equipment charred in the fire that killed 112 workers Saturday. He also found entries in account books indicating that the factory took orders to produce clothes for Disney, Sears and other Western brands.

Garments and documents left behind in the factory show it was used by a host of major American and European retailers, though at least one of them — Wal-Mart — had been aware of safety problems. Wal-Mart blames a supplier for using Tazreen Fashions without its knowledge.

The fire has elevated awareness of something labor groups, retailers and governments have known for years: Bangladesh’s fast-growing garment industry — second only to China’s in exports — is rife with dangerous workplaces. More than 300 workers there have died in fires since 2006.

Police on Wednesday arrested three factory officials suspected of locking in the workers who died in Saturday’s fire, the deadliest in the South Asian country’s less than 35-year history of exporting clothing.

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China Riots Send Manufacturers Packing?

China has long been a desired destination among the world’s biggest multinationals looking to fill labor-intensive positions on the cheap. But recent riots there may have some foreign manufacturers thinking about moving production closer to home.

From Apple’s (NASDAQ:AAPL) biggest iPhone manufacturer, Foxconn, which employs tens of thousands of people in China, to Toyota (NYSE:TM) and Caterpillar (NYSE:CAT), manufacturers have long taken advantage of China’s low-cost labor, solid infrastructure and softer regulations.

But calls for better wages and working conditions have been growing louder in China over the last decade, recently exploding in a 2,000-person fight at Foxconn just days after the new iPhone 5 began selling in the U.S.

And after years of relative peacefulness, disputes between China and Japan ramped up earlier this month, showing once again that China is not immune to social and economic strife.

“Wages alone won’t be determinative,” said Marshall Meyer, a professor and China expert at the University of Pennsylvania’s Wharton School. “Short term the concern is social and political stability.”

The recent socioeconomic problems in China come as the government undergoes a once-a-decade transition, which has brought political upheaval and distracted the incoming Communist Party. The two-week disappearing act by China’s president-in-waiting Xi Jinping earlier this month and doubts over the accuracy of the country’s economic data have also highlighted the uncertainty that comes when companies conduct business in China.

Manufacturers may not have reached their tipping point yet, but the latest news out of the region, coupled with ongoing labor issues and rising wages, is further chipping away at their confidence.

“The combination of increased costs and unrest of labor force at some point will shift the collective wisdom,” Meyer said.

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China’s “wild east” drug store

reuters

Philippe Andre, a detective in the murky world of Chinese pharmaceuticals, has some alarming tales to tell.

In May last year, he visited a factory an hour outside Shanghai that supposedly produced a pharmaceutical ingredient. While shown around by men wearing protective clothing and spotless hard hats, Andre noticed oddities: the floor was immaculately clean and some workers sat around idle.

The factory had an inspection log that spanned eight years with perfect record-keeping, but the handwriting was the same for all those years and not a single page was dog-eared. What’s more, while the factory had equipment to dry its product, there were no connecting pipes to funnel steam or waste gases out of the plant.

“Obviously the product was not made there,” said Andre, a Belgian who runs a pharmaceutical auditing firm in the eastern Chinese city of Tianjin that advises foreign drug companies buying ingredients in China. The building, he says, was just one of the “showroom” factories intended to disguise China’s thriving industry in substandard and counterfeit drugs.

Four years ago, Beijing promised to clean up its act following the deaths of at least 149 Americans who received contaminated Chinese supplies of the blood-thinner heparin. But an examination by Reuters has found that unregulated Chinese chemical companies making active pharmaceutical ingredients (API) are still selling their products on the open market with few or no checks.

Interviews with more than a dozen API producers and brokers indicate drug ingredients are entering the global supply chain after being made with no oversight from China’s State Food and Drug Administration (SFDA), and with no Good Manufacturing Practice (GMP) certification, an internationally recognized standard of quality assurance.

“There is falsification of APIs going on, we know it,” said Lembit Rago, coordinator for Quality Assurance and Safety in Medicines with the World Health Organisation (WHO). “The regulated markets like Europe and the United States are relatively safe because they have well-resourced regulatory authorities. But the situation is different in places like Africa, where there are a lot of local medicine manufacturers who all use APIs from China.”

The export of unregulated drug ingredients may be putting lives at risk, particularly in poor countries where local pharmaceutical controls are minimal. Medicines containing faulty active ingredients or the wrong dose do not work properly and can contribute to the emergence of drug-resistant strains of dangerous diseases, such as malaria.

DOMINANT PRODUCER

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Death By China

 

Best-selling author and filmmaker Peter Navarro brings us DEATH BY CHINA, a documentary feature confronting America’s most urgent problem — its increasingly destructive trade relationship with China. 

Since the communist nation began flooding U.S. markets with illegally subsidized products in 2001, over 50,000 American factories have disappeared, putting than 25 million Americans out of work. The United States, as a result, now owes more than 3 trillion dollars to the world’s largest totalitarian nation.

Through compelling interviews with voices across the political spectrum, DEATH BY CHINA exposes our nation’s broken relationship with China and why it must be fixed for the world to be a place of peace and prosperity.

FDA Says Brazil’s Orange Juice Is Safe, But Still Illegal

 

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

Antonio Scorza/AFP/Getty Images Oranges for sale at a market in Rio de Janeiro.

NPR      by DAN CHARLES  February 22, 2012

If you happen to notice sometime later this year that you’re suddenly paying a lot more for orange juice, you can blame America’s food safety authorities. The U.S. Food and Drug Administration, after several weeks of deliberation, has blocked imports of frozen, concentrated orange juice from Brazil, probably for the next 18 months or so, even though the agency says the juice is perfectly safe.

The FDA’s explanation is that its hands are legally tied. Its tests show that practically all concentrated juice from Brazil currently contains traces of the fungicide carbendazim, first detected in December by Coca-Cola, maker of Minute Maid juices. The amounts are small — so small that the U.S. Environmental Protection Agency says no consumers should be concerned.

The problem is, carbendazim has not been used on oranges in the U.S. in recent years, and the legal permission to use it on that crop has lapsed. As a result, there’s not a legal “tolerance” for residues of this pesticide in orange products. Read more of this post

How to Save U.S. Manufacturing Jobs

By Howard Wial @CNNMoney February 23, 2012: 5:34 AM ET

Howard Wial is a fellow for the Brookings Institution Metropolitan Policy Program.

At first glance, manufacturing jobs would appear to be a dying breed.

The United States lost 6 million manufacturing jobs between early 2001 and late 2009. And despite small gains during the last two years, the trend in manufacturing employment for the last 30 years has been downward.

That has led some to argue that long-term job loss in the industry is inevitable. But our research shows otherwise.

There are two common versions of the “inevitability” argument. One holds that U.S. manufacturing wages are too high to be internationally competitive. The other maintains that manufacturing job losses are the result of productivity growth. Both arguments are wrong. Read more of this post

How To Invest For Jobs Coming Back To U.S.

Brian Sozzi, Contributor   2/16/2012

The grand theme I want to put on the table is the concept of onshoring, sometimes called reshoring, which is the bringing back of U.S. jobs from overseas supply chains.

U.S. businesses have started to realize that while workers in far away lands garner miniscule wages compared to their U.S. counterparts, having operations outside of the country can be a strategic disadvantage.  The speed and structure in which information is consumed has caused U.S. consumers to demand top quality products and to want to buy them whenever they please.

Having a manufacturing plant domestically aids in the quicker movement of goods from design table to sales floor.  Furniture maker Ethan Allen is great example of a manufacturer producing most of its products in the U.S. and doing customization for clients, setting itself apart from price-point focused competitors.

Corporate managers are simply getting over their infatuation with cheap international labor and analyzing the total costs of doing business in the U.S. compared to say, China or India.

There is a dollop of icing on the cake here as well.  The topic of focusing on onshoring to boost employment levels seems to be an area of agreement between bickering Republicans and Democrats.  Republican presidential hopeful Rick Santorum, for example, wants to zero out the U.S. corporate tax for manufacturers.

Anytime the major political parties agree on anything, even the slight thing, it’s cause to sit up and take notice from an investment standpoint.  The Donkeys and Elephants may be a little apart on how to precisely shepherd along the corporate onshoring interest, but at least they are talking the same language.  It’s high time they do find common ground if the following is to be reversed:

  • Manufacturing employment has fallen by approximately 37% since 1980.
  • According to a survey done by the Manufacturing Institute and Deloitte, some 600,000 manufacturing jobs are currently unfilled due to a mismatch between job requirements and experience.

I have read a fair number of columns bantering about onshoring.  Is it overhyped?  Do we really need more jobs in the service sector U.S. economy?  The debates are almost endless.  Unfortunately, though, I have failed to stumble upon investment strategies to profit from onshoring, which has already begun to a certain extent, and could likely gain steam in the years ahead.

Buy-and-hold investors, this should be right in your wheelhouse: a highly probable future event to build positions around in companies with durable competitive advantages.

A few names that come to mind:

  • Waste Management: Owns 260 plus landfills and is the largest waste management business in the U.S.  More manufacturing production means more waste to be piled into the company’s green bins.
  • ADP: Benefits in two manners.  First, workers are hired to run new domestic manufacturing plants (hopefully by people that used the downturn to attain new technological skills).  Second, there should be a trickle down effect in the overall employment sector via a ramp in higher paying manufacturing jobs.
  • Dunkin Brands: “America Runs on Dunkin” as the brand’s slogan goes.  The company’s moat is not as wide as an ADP or Waste Management, but more U.S. manufacturers should mean more egg sandwiches (which Starbucks does not do superbly) and coffee.  Store penetration is increasing in areas of the country that are manufacturing oriented.
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