CSR statements are easy; sustainable procurement is harder

Posted: February 23, 2011 in China, Responsible business
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As Dell and HP have discovered this month, it’s a lot easier to write a CSR policy than it is to ensure that it is carried through.

Their plight is not uncommon and is the unfortunate result of treating CSR as a public relations function, focused on appearance and not on substance.

To be credible, CSR needs to be built into the operations of a business, which requires a lot of work. Employees need to feel, if they see a shortcoming, that they ‘own’ the CSR platform and are responsible for maintaining standards.

Furthermore it is not easy establishing and maintaining a credible system of supply chain monitoring to ensure that one’s CSR policies are enforced all the way down the line.

MSI is a Taiwanese manufacturer of motherboards and graphics cards. It has numerous factories including one in Shenzhen, on mainland China’s border with Hong Kong. These circuit boards find their way into Dell and HP computers, amongst others.

Between them, Dell and HP currently account for 30% of new computer sales. There’s a good chance you are reading this on one of their computers … I’m typing it on a Dell; a circuitboard from MSI’s Shenzhen factory could well be sitting inside the computer casing next to my foot.

This month the New York based advocacy centre China Labor Watch published a report identifying significant problems at this factory including:

  • Mandatory pregnancy testing
  • Mandatory overtime and unpaid hours
  • Non-processing of leave applications
  • Poor dormitory conditions (e.g. unsanitary bathrooms)
  • Restrictions on access to dormitories
  • Prohibition of all conversation
  • Workers not allowed to use restrooms during work hours
  • Wage deductions for minor noncompliances
  • Bullying and abuse

None of these are conditions that would be tolerated at Dell factories in the USA. Circuit board manufacture has been outsourced to China for cost reasons. However this is not an argument about wage costs, it’s about treatment of workers. It doesn’t cost extra to speak to somebody respectfully. Or to let them use the bathroom, for that matter.

These problems are endemic in factories in the Pearl River Delta. However, as China Labor Watch pointed out, merely accepting it flies in the face of the policies of MSI, Dell and HP.

Dell’s Code of Conduct for example includes commitments that the companydoes not tolerate discrimination, including on the grounds of pregnancy (page 3) and is committed to employee health and safety (page 4). Both Dell and HP have also committed to the Electronics Industry Citizenship Coalition (EICC) Code of Conduct, which forbids deductions from wages as a disciplinary measure.

Not good enough, guys.

Source: Dell, HP, and NEC Supplier Factory Case Study: MSI Computer (Shenzhen) Co., Ltd., China Labor Watch report, February 2011

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Comments
  1. […] As Dell and HP have discovered this month, it’s a lot easier to write a CSR policy than it is to ensure that it is carried through. Their plight is not uncommon and is the unfortunate result of treating CSR as a public relations function, focused on appearance and not on substance. To be credible, CSR needs to be built into the operations of a business, which r … Read More […]

    • ezy says:

      I work for a government organisation and the subject of CSR and sustainable development has landed on my desk. I just wanna convey my thanks for guys like you who contribute to the cause. THNAK YOU! And it makes for good reading.

  2. […] ready to engage with this. To date, too many have been playing a cat and mouse game (see this and this post), engaging with pressure group demands by being seen to act and doing just enough to make the […]

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