Auditing Giant Intertek Sued In Relation to Auditor Bribery

Identity exposure led to harassment of whistleblower

Download the pdf complaint against Intertek

NEW YORK CITY, Nov.10,2011 – Labor rights watchdog China Labor Watch is suing international auditing giant Intertek PLC over injuries stemming from Intertek’s exposure of a confidential informant’s identity in a criminal investigation focused on an Intertek staffer in Shenzhen, China.

The informant, Yuan Chaowen, knew of information related to possible criminal acceptance of bribes by an Intertek auditor in exchange for overlooking violations at the Hang Fat toy factory. Tang’s job was to check for underpayment of workers, child labor, and other abuses. An independent re-audit by the International Council of Toy Industries (ICTI) confirmed that egregious violations existed at the Hang Fat factory.

CLW introduced Yuan to Intertek management on the explicit condition that Intertek may not reveal Yuan’s identity. Yuan feared retaliation by factory owners who have connections with gangsters, local government and police.

Intertek violated the confidentiality condition by publishing Yuan’s name in its Compliance Newsletter. Soon afterward, Yuan received threatening anonymous phone calls. Even after fleeing Shenzhen for his distant hometown, he was repeatedly taken from his home and interrogated by police.

The suit alleges that Intertek defamed CLW. Intertek in its newsletter omitted the facts that ICTI found extensive fraud in the toy factory’s pay and hours records. It did, however, characterize CLW and Yuan as having “stagnated” the judicial process without mentioning Yuan’s reasonable fear of retaliation. The suit also alleges that Intertek has harmed CLW’s ability to investigate exploitive employers due to the loss of collaborators who, after seeing Yuan’s experience, are now afraid to help CLW’s investigations and advocacy.

Intertek’s clients include the Gap, Target, Samsung Electronics, and the ICTI, the members of which, including Hasbro and Mattel, account for approximately 85% of annual U.S. toy sales. Intertek has long been in the business of testing for consumer product hazards, quality inspection, and efficiency consulting. More recently it has also become a top social accountability auditor.

While Yuan and CLW were victimized by Intertek’s actions, even more so were thousands of workers who deserve a better factory environment. CLW is committed to seeking justice in this dispute and still hopes that Intertek will choose to work together towards that end.

Information regarding the lawsuit is available at Please call 212-244-4049 or email for further information.

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