Hi-tech industry, low-class treatment

Social justice news
February 2004

Hi-tech industry, low-class treatment
Islamic-Catholic groups asks prayers for peace
Lay groups launch new campaign for optional celibacy
More SOA protestors sentenced
Peace group plans to 'turn up the heat' in 2004 anti-war campaigns
Report reveals the true face of corporate social responsibility
Vatican blasts drug company 'genocidal action'

Hi-tech industry, low-class treatment:
Workers in the developing world face injustices that just don't ethically compute
Dell, HP, IBM, and other U.S. manufacturers design some of the most sophisticated personal computers in the world and sell them at often affordable prices in the First World. But there is a hidden cost to that affordability.

While computer products may embody the latest in high technology, labor standards and conditions in computer manufacturing can be appallingly low. That's what Great Britain's Catholic Agency for Overseas Development discovered when it took a closer look at a manufacturing sector not generally associated with unethical treatment of workers.

Many stages of computer production are carried out by low-skilled, low-paid workers—most of them women—in developing countries. But unlike their counterparts in the clothing and footwear sector, computer companies have thus far escaped scrutiny on labour issues.

CAFOD's Private Sector Analyst Katherine Astill said: "The current situation is unacceptable. . . . CAFOD is campaigning for brand leaders to take greater responsibility for electronics workers. It wants Hewlett Packard, Dell, and IBM to adopt and ensure effective implementation of codes of conduct based on UN standards."

The three companies have seen the evidence, and CAFOD has welcomed their initial responses to the findings and included them in a report on the treatment of high-tech workers in low-wage nations. So far Hewlett Packard has the best track record on labor standards, according to the agency, but all the companies recognise that more must be done.

Electronics workers in developing countries are rarely employed directly by the big brand name companies, which prefer to use subcontractors around the world. CAFOD's interviews with electronics workers in Mexico,Thailand, and China reveal a story of unsafe factories, compulsory overtime, wages below the legal minimum, and degrading treatment.

In Guadalajara, Mexico, workers told CAFOD of discriminatory and humiliating recruitment practices by the employment agencies that supply workers for contract manufacturers. The agencies often ask intrusive personal questions at interview to screen out pregnant women and anyone likely to try to organise fellow-workers to ask for better working conditions. Sometimes they even visit the homes of potential employees and talk to their neighbours.

Once recruited, electronics workers in Guadalajara live in constant fear of losing their jobs. Many are employed on consecutive short-term contracts, lasting three months at most. Although some continue working to such contracts for years (a practice banned by Mexican law) this makes it easy for the employment agency to fire them at will. A woman who becomes pregnant is likely to lose her job: the short-term contract means the agency can avoid paying maternity benefit.

Workers who ask for better pay and conditions can be threatened with termination or are told that their jobs could disappear to China, where wages are even lower. It is difficult to gain access to electronics factories in China and to have candid conversations with the workers, but CAFOD has been able to do so through a partner organisation based in Hong Kong.

Electronics workers in the Pearl River Delta are recruited from the massive pool of migrant labour from rural China. Often in debt to an employment agency before they even start their job, their basic wage is often well below the legal minimum. In Dongguan, where most of the research for this report was done, some electronics workers earn a basic monthly wage of $37. They can only earn the legal minimum of $54 through excessive overtime. In the peak season, they may work up to 15 or 16 hours a day, seven days a week.

Working conditions are often dangerous. In different stages of the production process, workers may be exposed to dangerous chemicals, smoke from soldering, metal dust or noise. Assembly-line workers are expected to stay on their feet for 11 hours a day. Workers who test monitors must spend a similar length of time in front of flashing screens. Yet CAFOD researchers found that in Dongguan many factories have no health and safety department, and fail to provide health and safety training.

The world's biggest personal computer companies face a difficult business environment. To cut costs, they outsource production to contract manufacturers in low-wage countries, pressing them to accept the lowest possible price. The contract manufacturers in turn pass on the pressure to the component manufacturers and, ultimately, to the workforce. The big brands demand top-quality products to tight deadlines, and this pressure, too, is passed down the supply chain.

It is the worker, not the supervisor, the factory manager or the buyer, who bears responsibility for a production error, according to CAFOD. The penalties for mistakes are often harsh, or designed to humiliate: in one factory in China, a worker who makes a mistake has to wear a red coat. Elsewhere, workers are fined for production errors.

"They are treated as if they were ignorant and stupid. They tell us that they are treated like animals, shouted and sworn at, sometimes even pushed around. It is a fundamental right for the worker to be respected, however lowly the job they are doing," said Sister Luz Elena Barrios, Calleros, CEREAL, Mexico.

The search for higher profits at the cheapest possible prices has resulted in the undermining of workers' rights. The big brands' response to this problem is inadequate. They have begun to acknowledge some responsibility to workers in their supply chain, and have taken steps at least to monitor the labour standards of their suppliers. But the individual staff tasked with implementing supply-chain labour standards must battle against the much stronger commercial forces which drive costs, and with them working conditions, into a downward spiral.

One important reason for low labor standards in the computer industry is the absence of effective trade unions. Some host governments, eager to attract foreign investment, discourage effective worker organising and (sometimes through lack of capacity) fail to enforce their own labour legislation. In China, free trade unions are banned and there is rarely any other form of participation in factory decision-making. Most workers are simply unaware of their rights.

But host governments and local employers are not the only ones to blame. The big brands are sometimes also reluctant to accept the essential role of unions in protecting workers' rights. CAFOD's analysis of the codes of conduct of the three market leaders found them to be equivocal on freedom of association.

The achievement of decent working conditions in the electronics sector requires concerted action by all stakeholders: brand companies, suppliers, consumers, host governments and home governments, trade unions, investors and the International Labour Organisation (ILO). Computers have become part of the fabric of the lives of individuals and institutions across the developed world. Everyone shares a responsibility to the workers who make them, says CAFOD.

CAFOD calls on:

Personal computer companies to adopt and implement codes of conduct based on ILO standards. Companies should pay particular attention to guaranteeing that the rights of part-time or short-term workers are respected as much as those of full-time and permanent workers.

Companies to conduct their core business in such a way that suppliers can implement labour standards, for example, by negotiating appropriate prices and lead times.

The UK government to consider companies’ policies and practices in relation to supply-chain labour rights when awarding procurement contracts.

The UK government to support the UN Norms on Business Responsibility, which include the ILO Core Labor Standards.

For more information:
Watch 'Tale of two cities' animation
Full policy report

Take action

Back to page top