Labor Issues

For several years, I have been using IPhones and have tried 3 models already.  Although I’m not really a gadget-savvy, I’m a happy and satisfied Apple user.  However, my perception of Apple has changed after I watched the video featuring the labor conditions at Foxconn.  Foxconn is the major manufacturer of IPhones and other Apple products, Hewlett Packard, Dell, Motorola, Nintendo, Nokia and Sony (Wikipedia).   In the video, Foxconn is said to have violated a number of labor rights, resulting to riots and worse, suicide of some employees.  Employees are said to be working for excessive hours and not fairly compensated for their overtime.  Other allegations about Foxconn include cancelling of lunch breaks if targets are not met, limited day offs, child labor, and that employees are sometimes exposed to harmful substances.  It is really surprising to know that behind the most popular mobile brand, are some negative stories. 

First, I was quite surprised that there’s a highly manual operation involved in the manufacturing of Iphones.  I am also working in an electronic manufacturing company.  Although we have a large workforce, I would say that the jobs of our operators are not labor intensive.  Our employees work on a 12-hour shift, but they are properly compensated.  Most of them actually prefer to work on a 12-hour shift than on an 8-hour shift, because of a huge jump in their net pay.  Unlike Foxconn, our company is very careful in handling our employees.  We have encountered various labor cases already, and as much as possible, we want to avoid incurring costs on legal cases.  Aside from a negative public image, we are also subjected to high legal costs, both to our lawyers, and to the employee who had filed a complaint/case against us.  Aside from cost, there’s also a lot of time spent in facing these charges.  So, rather than a reactive approach, our company is more of doing a preventive approach, by ensuring compliance with the labor laws. 

At first, I wondered why Foxconn has managed to continue its operations despite the cases filed against them.  Then I realized that the government cannot simply cease the operations of very big companies.  Ceasing, or at least suspending the operations of these influential companies, not only would affect the employment rate of the country, but would also significantly affect the tax revenues of the government.  Although the government has the power to halt Foxconn’s operations, it would eventually backfire against them. 

Foxconn’s customers (e.g. Apple) on the other hand, should also have the responsibility in ensuring the sound business practices of their suppliers.  CSR is not limited to a company’s operations and programs, but also extends to the sound business practices of their suppliers and customers.  In other words, a true and effective CSR should be implemented in an ecosystem of the company and its stakeholders.  Accountability of implementing responsible business practices should be shared by suppliers, customers, employees, owners, and other stakeholders.  Countries and their governments also form part of this ecosystem.  Another issue involved here is that the approach to CSR is different between the supplier’s country (China) and its customers (US).  US on one hand is giving a high regard to CSR activities, but on the other hand, China’s approach to CSR needs more maturity.  It may be a big leap to reconcile the differences in these two powerful countries, in terms of their approach to CSR.  To reconcile differences, the safest approach is to ensure that the contracts between the suppliers and customers are adequately reviewed, and adequately include provisions on CSR matters particularly on labor and quality issues.