July 12,2011

CLW recently completed a 136 pages in-depth investigative report examining the electronics manufacturing industry in China.  This report focused on ten Chinese electronics factories that supply finished manufactured electronic products to multinational electronics brand companies, such as Dell, Salcomp, IBM, Ericsson, Philips, Microsoft, Apple, HP, Nokia, and others.  The investigations took place over an eight month period from October 2010 to June 2011 and interviewed a total of 408 workers at electronics factories located in Guangdong and Jiangsu provinces.  CLW investigators posed as factory workers to gain access into these factories, interview workers, and assess factory conditions.  The investigation uncovered working conditions and ongoing labor practices at these factories that violated numerous Chinese labor laws and the social responsibility codes of conduct of these multinational electronic brand companies. The majority of these violations could be grouped into five distinct categories relating to overtime hours, wages, level of labor intensity, labor contracts, and recruitment discrimination.  Listed below is a sampling of some of the specific labor violations found at these factories:

• Factory workers were required to work an excessive amount of overtime hours, especially during the peak manufacturing season when purchasing orders are at their highest.  All of the electronics factories investigated were requiring workers to work between 36 and 160 hours of overtime per month.  No one investigated factory was found to be in strict compliance with China’s labor laws regarding overtime hours.  In many cases, workers were coerced into working overtime hours ‘voluntarily’, in order to earn a monthly salary that would pay for basic living costs.
• The minimum monthly wage found in nine investigated factories did not adequately provided workers with the financial means to afford basic living costs.
• The level of labor intensity was found to be extremely high in all ten factories investigated.  In some cases, labor intensity was so extreme that only the most efficient workers could withstand the stress.  On one HP assembly line, investigators recorded that workers were required to complete their assigned task every three seconds, while continually standing over a ten hour period.  In all of these cases, the high level of labor intensity left workers more prone to developing long-term occupational illness or injury.
• Investigators found that many factories were signing coercive labor contracts with workers.  In many cases, workers were not properly informed about the specific details of their contracts.
• All ten factories investigated were found to have discriminatory recruiting practices, hiring only young and healthy candidates, while restricting against others based on age, gender, or medical condition, specifically those infected with Hepatitis B.              

CLW believes that the inhuman working conditions found in these factories not only reflect severe problems in China’s electronic manufacturing industry, but also reveal serious systematic problems in the international electronics industry as a whole.  The profit policy inherent in the global supply chain strategies multinational companies use are a leading factor behind the gross labor abuses in China’s electronics manufacturing industry.  As both multinational brand companies and Chinese manufactures seek to reduce purchasing and manufacturing costs to the lowest level possible, the safety and well being of Chinese factory workers is sacrificed.  This maximization of profits and “race-to-the-bottom” of production order prices comes at a severe cost to the average Chinese factory work, as their wages decrease dramatically and their working conditions worsen.

It is irresponsible of multinational electronic brand companies to continue to promote the ideals of Corporate Social Responsibility (CSR) when their actions so directly contradict them.  By focusing on the exploitative labor practices of Chinese manufactures and their interconnectedness with the business strategies of multination corporations, this investigative report puts significant pressure of both parties to reform.  The investigative report singles out a number of areas where reform is need and appeals to multinational companies and Chinese manufacturers to act on these suggestions.  Specific reforms this report calls for include providing factory workers with accessible channels of appeal, specifically telephone hotlines, where they can freely voice concerns or questions they may have regarding factory conditions or labor contracts, enhancing  supervision and regulation of multinational companies , suppliers factories and countries where those factories locates from multilateral organizations like the United Nations, and overhauling CSR auditing methods for more open and effective oversight strategies operated by third party NGOs. 

CLW believes that left to themselves, multinational companies and Chinese manufactures will continue to pursue business and labor practices that ultimately exploit and abuse Chinese workers.  Only through multilateral participation and effort on apart of multinational companies, Chinese manufactures, labor rights organizations and other NGOs, the United Nations, and local and national governments can any far-reaching reform be attained.                            

China Labor Watch’s Executive Director Li Qiang states, “A true socially responsible company must fulfill its legal and ethical obligations to all shareholders and stakeholders, including employees. It must safeguard labor rights and improve working conditions.  Many of these companies state that they are implementing far-reaching reforms, but we have yet to see any clear evidence of this.  Only through greater participation by government and non-government organizations that increases public oversight and scrutiny over multinational companies and Chinese manufactures can true reform of the electronics industry begin.”    

 The complete report is 136 pages and available here