The United States consultative organisation whose report prompted Calpers' decision to pull out of four Asian stock markets is highly critical of labour practices in Southeast Asia. Verite, a non-profit group based in Massachusetts, said its recommendations were based on research by its field officers, who found many companies operating factories in Indonesia, Malaysia, the Philippines and Thailand were cheating workers and governments were turning a blind eye. Executive director and founder Heather White said from her San Francisco office yesterday that workers in those countries were living below the poverty line despite their governments reporting growth rates of 3 per cent or more at a time when many developed nations were experiencing flat or negative growth. 'I don't believe that the trickle-down effect is evident,' Ms White said. 'We're on the ground, in the factories, talking to them in their homes at night after their shifts and they're struggling. These people are not even able to meet their basic needs.' Verite's work focuses on labour issues and working conditions, such as occupational health and safety in factories. Established in 1995, the organisation aims to ensure consumer goods manufactured through the global production networks of North American and European companies are made under conditions that meet international human and labour rights standards. For the Calpers report, it used public data, such as the FTSE emerging markets index, and the findings from its social audits and interviews with non-government organisations, unions, government representatives and officers from other agencies. Verite, which operates in 57 countries, has its own workers in Indonesia, Malaysia, Thailand and the Philippines. Ms White said her organisation's decisions had not been based on subjective opinion. 'What we looked at are if the country is a signatory to the International Labour Organisation's core conventions, do they have working conditions that basically are favourable and supportive of workers . . . and how effective the laws that have been created are and whether they are being implemented in a concrete way that we're able to identify,' she said. 'Anything to do with globalisation and labour issues generally falls into our domain.' Where the opportunity had arisen, reports had been conducted on workers, their families and communities. However, there had not been enough time to do this in every case. Ms White said a lot of suffering had been observed in Asia. Part of this was because many factories were owned by overseas corporations and employment levels had risen as a result. However, in many cases, workers were not being paid the minimum wage and were being cheated of their overtime and legal benefits as dictated by law. 'In some cases, they don't even know the basis for their compensation is within the factory,' Ms White said. 'Workers end up not fully enjoying the benefits of this growth. 'I think that's one of the key flaws of the economic model at the moment in terms of free trade and the setting up of export processing zones that have been set up throughout Southeast Asia. Workers do have jobs, but they're not receiving the full benefits that those jobs are supposed to be offering them.' Verite has performed social audits in the Philippines and interviewed hundreds of workers. 'Workers are in such dire straits in some instances in the Philippines that they're hiring themselves out as contract labourers and going to other countries around the world on two-, three- or four-year contracts where they basically have to buy their jobs,' she said. 'They're stuck in factories for years and in many cases they don't end up earning what they anticipated, so they aren't able to accumulate the savings and get ahead as they thought they would.'