Cashmere Knitwear Causing Conflict in UK

Conflict over the use of North Korean labor in third countries has erupted again with claims in the British media that knitwear chain Edinburgh Woolen Mill (EWM) has been indirectly supporting Pyongyang through its use of an Eermel production facility in the Mongolian capital, Ulan Bataar.

Investigative reporter Simon Ostrovsky broke the story on the BBC news and current affairs program Newsnight last Thursday.

In the report, Eermel’s export director, Bayar, is shown stating that the company pays the wages of its 80 North Korean workers directly to the North Korean authorities rather than to the individual workers, saying, “We are transferring the money to the account of… the light industry of North Korea. How they split, divide the salary I don’t know,” before adding, “The North Korea government is getting money from here.”

The comments stand in stark contrast to those of EWM itself, which subsequently responded to the BBC claims with a statement obtained from Cashmere Holdings, which owns Eermel: “Workers are paid twice per month. The State Bank of Mongolia is instructed to pay each North Korean worker into their own personal bank account at the State Bank of Mongolia. The only deduction from wages at source is 10% Mongolian tax, which is a legal requirement of the Mongolian government. Each North Korean worker has their own access to their bank account and a debit card for withdrawals and payments. They purchase and spend freely.

We do not pay any commission to the North Korean government, any North Korean Agency or anyone else, we pay the workers directly.”

However, EWM also conceded that its investigation continues, saying, “We have made some initial enquiries into the issues raised and can confirm that these enquiries are ongoing. We are striving to establish and understand whether there are issues with this factory which should cause us to be concerned. We have found no evidence of this so far.”

The story is the latest in a long line of similar revelations about North Korean workers abroad and their working conditions, a history that supports Ostrovsky’s claims. In a 2009 report on North Koreans working in logging camps in the Russian Far East, for example, Ostrovsky himself spoke with the manager of a British firm who stated, “As far as the agreements that we have in place, the money is going through to the Ministry of Forestry of North Korea. As for what it is used for in North Korea is not of our interest.”

Elsewhere, other reports carried by The Daily NK and other media outlets in the past have also asserted that the wages of North Korean laborers in places across Africa, the Middle East and Eastern Europe do go in large part directly to the North Korean government.

“The dollars earned by North Korean overseas workers are sent to Kim Jong Il through dispatched overseas entities in the name of ‘revolution funds,’ ‘loyalty foreign currency’, and ‘Party funds’,” Rim Il, a manager with Gwangbok Construction Company in Kuwait from November, 1996 to March, 1997, told a forum held by North Korea Strategy Center in Seoul earlier this year .

“Since 1994, workers have had to work 14 hours a day without overtime payment and, in addition, they receive ideological education, evaluation meetings and lectures every day,” Rim added.

However, evidence that North Korean workers still prefer to work outside North Korea in spite of the exploitation muddies the waters still further.

Kim Gwang Jin, a senior researcher with the Institute for National Security Strategy asserted at the same forum, “Even though the intensity of work is high and they live under tough censorship, they compete against each other to go to work abroad by utilizing their personal connections and bribery.”

Certainly, Eermel manager David Woods conveyed the impression that the North Koreans there live relatively well, telling Ostrovsky, “The North Korean workers fit in very well with the Mongolian people. They’re hard workers, they don’t complain and they get stuck in, and they are quite skilled. They are looked after by Eermel, they have a dormitory, they have food, they have showers and they have television. They fit in very, very well.”

Watch the full Newsnight report here

Chris Green, Leiden University
Christopher Green is a researcher in Korean Studies based at Leiden University in the Netherlands. Chris has published widely on North Korean political messaging strategies, contemporary South Korean broadcast media, and the socio-politics of Korean peninsula migration. He is the former Manager of International Affairs for Daily NK. His X handle is: @Dest_Pyongyang.