Vendor-supplier partnership key to rid labor abuse

Tech companies may have difficulty in enforcing labor laws and standards directly but they can state the necessary requirements in their contractual agreements and work closely with manufacturers to ensure ethical working conditions are provided, industry watchers say.

Tim Bajarin, president of technology consultancy Creative Strategies said the current "hot" demand for electronic devices such as smartphones, tablets and games devices has resulted in manufacturers "pushing workers harder to meet production demands", and such situations have become rampant.

His comments corroborate with reports detailing harsh conditions faced by workers of Chinese manufacturers, such as Foxconn which assembles electronic devices for tech vendors including Apple. Labor law violations commonly found at these factories include hiring underage workers, improperly disposing of hazardous waste, and long work weeks spanning seven days, according to a New York Times report last month.

Earlier in 2010, a spate of suicides and injuries from suicide attempts at Foxconn's Shenzhen factory led to Hewlett-Packard (HP), Dell and Apple investigating the venue's working conditions.

Onus on manufacturers, governments
However, Rob Enderle, principal analyst at the Enderle Group, said in many cases, it is the manufacturers and governments that have the authority and capability to set and enforce rules at the employee level in factories.

Tech vendors are typically third-party organizations operating out of different geographic regions. This leaves them with little to no authority to enforce proper working conditions besides threatening to terminate its contract with errant suppliers, he said in an e-mail interview.

Cancelling contracts could also severely damage the viability of a company's products, possibly resulting in penalties, making it is less likely to look further into whether its manufacturers are adhering to employee regulations, the analyst explained.

"[Tech vendors] can certainly try, but financial incentives and the system itself works against their effort [to improve supply chain practices]…and the company may incur more costs or no longer be as effective. Unless that is fixed, such efforts can't be sustained."

Enderle added that should manufacturers put more focus on improving care for workers, the resulting cost may deter tech vendors from contracting them, thus disincentivizing the need to provide good working conditions.

Bajarin agreed that manufacturers should shoulder the main responsibility within the supply chain to maintain ethical standards for their workforce. That said, technology vendors have a role to play in clearly laying down their expectations in the contractual agreement as well as exercising the right to conduct audits, he added in an e-mail.

Tech vendors chip in
Apple recently affirmed its corporate stance in advocating for proper working conditions. CEO Tim Cook reportedly wrote an e-mail to employees saying the company will not "stand still or turn a blind eye to problems in its supply chain", according to a post on blog site 9to5Mac.

The company also released a list of its suppliers for the first time as well as announced it had joined the Fair Labor Association (FLA), which allows the latter to conduct independent investigations and reports on conditions among its suppliers. Apple is the first tech company to do so, according to the U.S.-based non-profit labor rights organization.

When contacted, an Apple spokesperson did not comment and pointed to its supplier responsibility reports.

Aaron Pickering, communications manager at FLA, said: "We hope Apple's participation in the FLA will set a new standard for the electronics industry."

He added in an e-mail that it is not enough for tech vendors to simply lay out a set of standards, but they should also have systems and methods in place to enforce these standards as well as to identify and remediate risks to workers.

Other IT companies contacted by ZDNet Asia acknowledged their responsibility in supply chain management and ethics.

Annukka Dickens, environmental manager for HP Asia-Pacific and Japan, said the company "strongly believes that its environmental and social responsibility extends beyond its own door step to the operations of its suppliers and that of its customers".

HP, as the OEM (original equipment manufacturer) partner, is responsible for raising the social and environmental awareness within our supply chain, but the implementation of such practices would not be successful without the cooperation of the suppliers, she added.

A Microsoft spokesperson also said the software giant takes working conditions in factories manufacturing its products "very seriously".

"Microsoft is committed to the fair treatment and safety of workers employed by our vendors, and to ensuring conformance with Microsoft's policy," the spokesperson said. "We have a stringent vendor code of conduct that spells out our expectations, and we monitor working conditions closely on an ongoing basis and address issues as these emerge."