Labour rights attorneys have accused Nien Hsing's Nicaraguan-based Chentex garment factory of imposing sweatshop conditions and starvation wages on its workers. The factory supplies jeans to the US military and several major US retailers including Wal-Mart and Target.

The lawsuit, filed Tuesday in Los Angeles US District Court, seeks punitive damages against the Chentex factory. It claims that Nien Hsing, which owns the factory, pays its workers less than 20 cents for each pair of jeans sewn - the jeans are then sold for $25-$30.

The National Labor Committee for Human Rights said at a press conference yesterday that the jeans are sold to American military personnel through the Army and Air Force Exchange Service, which supplies servicemen and women. The service imported 64 tons of jeans made at the plant last July, August, and September, the Committee claimed.

"This factory in Nicaragua actually presents the true face of the global economy," said Charles Kernaghan, executive director of the watchdog. "It's one of oppression, starvation wages, mass firings, blacklisting, union busting and enormous corporate greed."

Pentagon officials admit to doing business with the company, but they say they found no evidence of poor working conditions when a delegation visited the Chentex plant several weeks ago.

"We do business with them," said Capt Eric Hilliard, public affairs officer for the Army and Air Force Exchange Service. "We went down there, checked it out, and we saw that things were up to par."

The Army and Air Force Exchange Service is one of the world's largest retailers, operating 1,423 stores on US military bases nationwide. It had $7.3bn in sales last year.

Kernaghan said he uncovered the link to the Pentagon while reviewing the company's sales documents. Several American department stores - including Kohl's, Kmart, Wal-Mart, Target and J.C. Penney - also had garment contracts with the company.

Two congressional Democrats, Georgia Rep. Cynthia McKinney and Ohio Rep. Sherrod Brown, also attended the news conference. Brown travelled to Nicaragua in July and vouched for the deplorable treatment of the garment workers.

McKinney, who in October introduced legislation that would require US corporations to disclose information about their overseas operations, asked the General Accounting Office to conduct a study. "We have to understand these goods come to us at a tremendous human cost, and it's not necessary," said McKinney, who sits on the Armed Services and International Relations committees.

Kernaghan said the Nicaraguan workers are asking for just eight cents more per garment - a raise he says would raise them from "misery to poverty."