The AXT Way 

Meet Xuan Wen Li. Fremont semiconductor firm AXT, Inc. poisoned him with arsenic, then fired him - just as it did with up to 500 other Chinese immigrants.

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The facades of AXT's Fremont campus gleam with tinted windows and antiseptic white walls, and saplings drift in the wind above perfectly manicured lawns. The company has built such a stellar reputation that, in 2001, Forbes listed it among the magazine's top 200 small businesses. AXT has done business with the National Aeronautics and Space Administration; and the Department of Defense has invested almost $1.5 million in AXT research projects. The company's customers have included heavy hitters such as Hewlett-Packard, Motorola, Nortel Networks, and TRW Space and Defense. Its chief financial officer, Don Tatzin, currently serves on the Lafayette City Council.

But peer behind those white walls and you get a considerably different view. According to government records, internal company documents, and former employees, AXT has knowingly poisoned perhaps hundreds of its own employees with arsenic over a period of at least five years. When government officials investigated the company in 2000, they found evidence that AXT's managers knew that its employees were being exposed to arsenic levels four times the legal limit -- yet had done almost nothing about it. At one point during the investigation, AXT internal monitoring indicated that one employee was exposed to 31 times the maximum permissible concentration of arsenic dust. Another employee says AXT managers refused to repair broken ventilation systems, and government regulators claimed in writing that the company failed to offer its workers respirators and shower facilities with which to decontaminate themselves. Not only were workers breathing arsenic dust, they were possibly bringing it home on their clothes and exposing their children to it.

Investigators from the state Division of Occupational Safety and Health were so horrified with these conditions that in the spring of 2000 they shut down the company's factory for four days and slapped AXT with a $313,655 fine. By the agency's standards, such a fine is nuclear in scale. It says a lot about what AXT had done to its workers, but it also says a lot about how toothless the state legislature has rendered its watchdogs of occupational toxins. Only the 1998 explosion at the Tosco oil refinery generated a substantially larger fine -- $410,000 -- and refinery managers had to kill four people to incur it. The sad fact is that no regulatory body has the power to rein in such businesses. Companies such as AXT can poison, maim, or cripple their workers with near impunity.

Still, rather than accept its citations, fix its problems, and move on, AXT hired a powerhouse San Francisco law firm, appealed the fine, and dragged the case out for months. When government regulators met with company officials in a settlement conference in 2001, they learned that AXT had found a way to resolve this issue once and for all -- by moving the factory to China, safely out of American jurisdiction. Roughly five hundred employees, 90 percent of whom were Chinese immigrants, had not only been exposed to potentially lethal amounts of gallium arsenide; they lost their jobs as well. Last summer, regulators once again cited AXT for willfully exposing employees to arsenic. Resolution of that case is still pending, and company officials refused numerous requests to comment for this story.

Workplace toxins and outsourcing jobs are hardly new to Silicon Valley. Personal computers and the Internet continue to transform our lives in many ways, but the building blocks of the high-tech revolution have left a toxic legacy in Bay Area soil and drinking water. Santa Clara County, for instance, now has 23 Superfund waste clean-up sites -- the most of any county in America: Nineteen of them are directly related to the high-tech industry and involve poisons such as freon, benzene, and trichloroethylene. The 1980s saw a disturbing rise in the incidence of birth defects and miscarriages in certain Silicon Valley neighborhoods, and the cost of cleaning contaminated sites and settling the subsequent lawsuits has run into hundreds of millions of dollars.

Now, former high-tech workers and environmental activists are beginning to ask whether these same companies poisoned their own workers, and a mountain of new litigation is descending upon state and federal courthouses across the country. Last month, in what many consider a landmark case in the area of high-tech occupational liability, a Santa Clara jury ruled that IBM was not responsible for the cancer of two former employees who handled hazardous material in the 1970s and 1980s. But five days later, Big Blue settled a similar lawsuit in New York, and the company faces some two hundred further lawsuits by former employees. Several former AXT employees are weighing their own legal options and shopping for attorneys.

But it's the subject of globalization that has so unnerved the American public lately. As computer programming jobs are exported to India, the middle class of Silicon Valley is finally discovering the sting of outsourcing. Yet the darker side of globalization lies not in the exportation of six-figure desk jobs, but in the emigration of toxic industries to countries with negligible labor and environmental protections. From computer assembly jobs in the 1980s to waste incineration, copper smelting, and semiconductor assembly and testing, the nation's dirtiest industries are being relocated to countries such as Thailand, Malaysia, and, increasingly, China. The moment company officials decided to move their most toxic manufacturing processes to Beijing, Fremont's AXT became a prime example of this phenomenon.

"The reason everyone talks about outsourcing is cheap labor," says Jim Puckett, founder of the Basel Action Network, a nongovernmental organization that tracks the spread of toxic chemicals across the globe. "But there are certain things that go hand in hand with cheap labor that no one wants to talk about. They include the lack of government occupational safety regulation, lack of tort law to redress a grievance, lack of labor unions. All of these things are part and parcel of outsourcing. You're not just taking advantage of cheap labor, you're taking advantage of marginalized and vulnerable populations, and the fact that you can poison people without ever having to face the music."

Globalization and high technology are two of the most creative forces in the modern world, where nothing is good or evil, merely possible. For the last six years, AXT executives have spliced together the best and worst of human nature inside a modest business park near the salt ponds of Fremont.

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