In search of fair computers
[ By Andreas Manhart and Rainer Griesshammer ]
Reports on poor working conditions in Far Eastern facilities for cellphone and computer production have become commonplace. They deal with excessive overtime, extremely low wages and the lack of independent trade unions. Civil-society organisations in Europe are campaigning to stop this “race to the bottom”.
The allegations are warranted, as Hewlett-Packard’s Sustainability Report of last year showed. Many of HP’s subcontractors breached overtime rules. The report also mentioned other problems, including discrimination, poor safety precautions and inadequate handling of hazardous materials. It would be absurd to believe that such shortcomings are confined solely to HP’s supply chain; they are endemic to the entire electronics industry.
What can be done to improve matters at the production sites? Since most facilities are in emerging markets, European influence seems limited. Nonetheless, there is some scope for effective leverage. Since last July, the EU’s Restriction of Hazardous Substances Directive (RoHS for short) has banned new electronic goods that contain cadmium, lead, mercury, hex chrome or the flame retardants PBB and PBDE. Of course, such provisions have an impact on health and safety at the production sites. The directive only allows exceptions where there are no technically feasible substitutes that would do less harm to the environment.
Mobilising consumer power is another way to move things forward. As the examples of organic food or the fair-trade labels prove, consumer demand can affect production conditions. That might also be the case for electronic goods, with two provisos:
Buyers – including bulk purchasers and public agencies, not only household consumers – must unmistakably spell out their demands to manufacturers.
Product data must, in future, include information on production conditions.
With awareness-raising campaigns already under way, the first prerequisite should be met quite soon. However, there is less reason for optimism in respect to product information. So far, no criteria or methods have been defined for any reliable system of certification. One reason is that it is very difficult to keep track of every supplier involved in the industry. A notebook contains some 1,800 to 2,000 components, which are produced by many different companies.
Corporate influence
In order to define sensible criteria for discerning customers, one needs to understand how the industry is organised en detail. Many non-governmental organisations (NGOs) are demanding that brand companies bear responsibility for their entire supply chains. Managers however, typically only deal with their immediate subcontractors. It matters quite a lot what sway brand owners actually hold over the entire supply chain, and how that influence can be used to improve the lot of workers and local residents.
When buying computers, most customers opt for brand-name products. They look as if they had been developed and built by the company indicated on the label. Appearances are deceptive, however. Almost all notebook computers were designed by fewer than a dozen Taiwanese firms. These notebooks are assembled on industrial estates in the People’ Republic of China. Most consumers have probably never heard of these companies, which are anything but little workshops. These companies employ about 75,000 assembly-line workers to produce some 70 million notebooks per year. Staff also includes specialists, some of whom are highly qualified. These Taiwanese companies develop and design computers according to the specifications of the brand-owning corporations.
The brand-name companies do not, however, outsource everything to their Taiwanese subcontractors. Any quality or safety deficiencies would immediately affect their brand reputation. Therefore, they themselves buy important components for “their” computers, including displays and rechargeable batteries, for instance. Though the big names in the industry let subcontractors assemble the hardware, they still control many production steps upstream. Accordingly, it would be possible to check whether the manufacturers of such components comply with social and environmental criteria, and require brand-name companies to imply the relevant standards in their supplier base. If brand-name companies can get the prices and quality they want, they can also make sure that social and environmental standards are met. No doubt, organised consumer power could exert pressure in a meaningful way.
Smaller components, however, pose more daunting challenges. All relevant specifications of inductors, resistors, diodes and similar computer parts are standardised and subject to streamlined testing. They are traded on a very flexible market. Manufacturers of larger components and the assembly firms purchase such components from middlemen. No brand-name company knows exactly which companies produced what parts on a motherboard. From the brand-name companies’ perspective, it would be impossible to enforce compliance with social and environmental standards on this production level.
Nonetheless, there are some viable approaches to rise to this challenge. Generally, the production of such modules is highly automated and involves numerous hazardous substances. Since there are by far fewer line-workers than in the assembly processes, there are less people exposed to the according working conditions. While this does not rule out breaches of labour laws, health hazards for the workforce and local residents are definitely more relevant.
The industry is well aware of these problems, however. Independent teams of engineers and toxicologists would not find it difficult to identify those components that can be dangerous to produce. Of course, they would not only have to assess the toxicity of individual items, but also the risks inherent to the production processes as well. Such assessments, however, would be possible without major campaigns to audit hundreds of factories. For the most part, it would suffice to draw on expert knowledge, complemented with case studies and information from labour-rights activists. It is no tough challenge to identify all components the production of which needs to be controlled. Elements that do not cause any big problems could be left out of certification.
Computer and cellphone manufacturers are blamed for some other grievances too, however. A huge variety of raw materials is needed to make electronic products, and their extraction sometimes has considerable social and environmental impacts. A case in point is coltan, which is used in condensers. In 2000, this commodity’s price rose sharply on the world market. Press reports claimed that militias in war-ravaged Congo were financing their arms by selling coltan. That price has since dropped again, and the civil war has abated, but the problem lingers on. Of course, brand suppliers of electronic goods will only be able to exert a substantial influence on the extraction of commodities they are the main buyers of. However, that is precisely the case for some metals like coltan and palladium. Industry-wide initiatives bundling corporate demand could therefore influence the conditions in the extractive sector.
Pros and cons of audits
Industry and labour-rights organisations disagree on how to monitor compliance with social standards. As a rule, managers rely on audits. Critics argue that this kind of control is easy to circumvent and does not serve to remedy structural problems. It is known that, in other industries, social audits did not bring about marked improvements even after decades. They did, however, spawn a new industry of its own. According to the Clean Clothes Campaign (2006), auditors are interested foremost in acquiring more audit commissions, rather than in assuring compliance with social standards or improving labour conditions. Therefore, many NGOs are calling for workers’ participation and involvement of independent trade unions.
Of course, there are no free labour unions in the People's Republic of China. At the workshop level, however, labour committees are often accepted as relevant partners. What is more, such engagement is even expressly welcome as part of official efforts towards a “harmonious society”. Therefore, the approach adopted by Social Accountability International is feasible in China. SA 8000, its set of rules, demands that companies “shall, in those situations in which the right to freedom of association and collective bargaining are restricted under law, facilitate parallel means of independent and free association and bargaining”.
In our view, nonetheless, social audits make sense with a view to health risks. Elected workers’ representatives will hardly command the necessary toxicological expertise to protect their colleagues effectively. Audits would also help to find out whether employees can easily and freely access all relevant information on current labour law. All too often so far, injured parties have no understanding of their legal rights.
As we have shown, there is a number of ways to certify electronic products, making sure that producers comply with social and environmental standards. Some critics may object that these approaches would still not oblige brand-name corporations to bear full responsibility for each and every detail in their supply change. However, such reasoning widely ignores reality. It is no use to demand that all subcontractors comply with social and environmental standards in full, because that would not be enforceable in the near future. On the other hand, one should take advantage of all realistic opportunities of pushing for genuine progress.
Today, “fair” production of electronic goods is still a vision for the future, but new steps need to be taken in response to the evident problems. Public awareness is growing. Finding our way through the supply-chain-jungle with its hundreds of companies may seem a huge challenge at first sight, but that is no reason to give up on systematic assessment and certification. It is feasible to define criteria, rules and coherent indicators. NGOs should grasp the chance to raise precise demands and press for the improvement of production methods. Even some brand-name corporations are already amenable to such ideas.