Reset: Corporate Social Responsibility in The Global Electronics Supply Chain

Reset
Corporate social responsibility in the global electronics supply chain

2 Reset. Corporate social responsibility in the global electronics supply chain
Reset
Corporate social responsibility in the global electronics supply chain
Colophon
Title Reset. Corporate social responsibility in the global electronics supply chain.
Date October 2009
Text GoodElectronics Pauline Overeem & CSR Platform (MVO Platform)
Design Annelies Vlasblom
Editing Elise Reynolds
Photos Chris Gregerson (page 5), International Metalworkers’ Federation/Manfred Vollmer (page 19),
Greenpeace/Kate Davison (page 55), Basel Action Network (page 65), Johan Spanner (page 83)
Printed by PrimaveraQuint
ISBN 9789071284403
Contact details
GoodElectronics and the Dutch CSR Platform are hosted by SOMO

Sarphatistraat 30
1018 GL Amsterdam
Tel +31 (0) 20 6391291
GoodElectronics
[email protected]
www.goodelectronics.org
CSR Platform (MVO Platform)

[email protected]
www.mvoplatform.nl
This publication is financed by the Dutch Ministry of Housing, Spatial Planning and the Environment (VROM).
This publication is licensed under the Creative Commons Attribution-Non-Commercial 3.0 Netherlands License. It is possible to
copy, distribute, and display this report and to make derivative works under the following conditions: 1) Attribution. You must give
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Table of contents
Part 1. Introduction 5
Introduction 6
Readers’ guide 8
Basic operational principles 9
The global electronics industry at a glance 17
Part 2. Social aspects 19

Gender 20
Conflict commodities 23
Local communities 26
Organising and collective bargaining 28
Forced labour 30
Child Labour 34
Discrimination 36
Security of employment – precarious work 38
Occupational health and safety 40
Working hours 44
Wage 46
Home work 49
Migrant labour 51
Part 3. Environmental aspects 55

Energy 56
Carbon footprint – greenhouse gases 58
Pollution 62
Part 4. Economic aspects 65

Purchasing practices 66
Export Processing Zones 68
Taxation 71
Trade and dumping 75
Marketing and retailing practices 78
Public procurement 81
Part 5. References 83
Part 1.
Introduction
Introduction
T
his publication provides an overview of wages are no exception. Supply chain responsi-
CSR issues that are relevant for the global bility is a key concept when it comes to making
electronics sector. It is a joint initiative companies deal with issues ranging from sourcing
by the Dutch CSR Platform (MVO Platform) and conflict commodities to responsible disposal of
GoodElectronics. The publication is based on obsolete electronic equipment.
the 2007 CSR Frame of Reference published by
the CSR Platform which reflects the Platform’s This publication reveals that corporate social
vision on corporate social responsibility. The CSR responsibility is not yet part of what compa-
Frame of Reference describes and defines basic nies in the electronics sector consider as their
standards and principles and gives an outline of core business. Although progress is made on
operational principles essential for the implemen- some aspects, other aspects are not even being
tation of an effective and credible corporate social addressed yet.
responsibility policy.
A renewed and substantially strengthened effort
The CSR Frame of Reference is a general docu- on corporate social responsibility and accountabil-
ment. In this publication the CSR Platform and ity is urgently needed. Initiatives should be evalu-
GoodElectronics aim to apply the general stand- ated and improved constantly. A more serious
ards and principles of the Frame of Reference to involvement of civil society stakeholders, unions in
the electronics sector in particular. Several aspects the first place, is crucial.
(social, environmental and economic) in different
phases of the supply chain (mining, manufactur- The publication is intended for those interested
ing and disposal) are described from a corporate in a more responsible and sustainable electron-
social responsibility perspective. This publication ics sector: the electronics sector itself, as well as
categorises the many problems that the sector stakeholders who are working on improving labour
still faces. Progressive initiatives that are relevant and environmental standards throughout the sec-
to business, government and civil society are tor. Hopefully, anyone interested in the progress in
presented, and concrete recommendations are implementation of corporate social responsibility
formulated. Please note that this publication does in the practice of a globalised complex supply
not pretend to be exhaustive. The analyses and chains will gain from this information, including
recommendations put forward derive from diverse companies in other sectors, policymakers and
civil society sources, including participants to the consumers who care to know more about the
CSR Platform and the GoodElectronics network. products they use daily.
Not all views are necessarily shared by all, how-
ever.
Among the most pressing issues is the lack of

freedom of association and collective bargaining.
The lack of observance of these enabling rights
has a huge impact on the labour rights situation
of workers in the global electronics supply chain.
Long working hours, forced overtime and low

The Dutch CSR Platform GoodElectronics
The Dutch CSR Platform (MVO Platform) is a GoodElectronics is an international network bring-
network of Dutch civil society organisations and ing together NGOs, trade unions, labour rights
trade unions that are working together to promote groups, environmental organisations, academics,
Corporate Social Responsibility (CSR). researchers, activists, etc with as common goal to
The goal of the CSR Platform is to stimulate, contribute to sustainability and human rights in the
facilitate and coordinate activities of the different global electronics sector.
organisations in order to reinforce each other’s
efforts. The emphasis of the CSR Platform lies on
issues dealing with CSR in developing countries.
Readers’ Guide
T
his publication comprises four parts: For each of these three phases, social, envi-
Introduction, Social aspects, Environmen- ronmental as well as economic aspects may be
tal aspects and Economic aspects. Each relevant, to varying degrees. Labour issues occur
thematic section consists of a number of chapters, during each of the three phases.
each dealing with its own specific topic.
By Social aspects we mean human rights and
In the introductory chapter it is explained how labour rights issues, with a chapter on conflict
this publication came about as an initiative of commodities as well as chapters on organising
the Dutch CSR Platform (MVO Platform) and the and collective bargaining, security of employment,
GoodElectronics network. In a separate chapter discrimination and migrant labour, among others.
the basic operational principles that the CSR Gender is discussed as an overarching theme –
Platform and GoodElectronics consider essential linked to the three distinct phases and a number
for the implementation of an effective and cred- of topics.
ible CSR policy are explained. These essential
principles include supply chain responsibility, In the part on Environmental aspects, attention is
stakeholder involvement, transparency, report- paid to issues such as climate change, greenhous
ing, and complaints procedures. In this chapter gases, and pollution.
a critical view is taken of the effectiveness of the
codes of conduct currently in use by electronics The part on Economic aspects deals with issues
companies. Suggestions are also provided of how such as trade and dumping, taxation and purchas-
companies can further enhance their social and ing practices.
environmental performance, including investing in
mature industrial relations, worker education and Each chapter is made up of four paragraphs:
collaboration among buyers and suppliers. A final Issues, Standards, Existing initiatives and Rec-
introductory chapter provides a brief overview of ommended steps. The first paragraph presents
the current global electronics industry from a CSR the issues inherent to the chapter’s topic. The
perspective. paragraph on standards gives the internation-
ally adopted standards and accepted principles
In the global electronics supply chain different relevant for the topic of the chapter. Progressive
phases can be distinguished. In this publication initiatives that are relevant to business, govern-
we speak of three different phases: the extrac- ment and civil society are presented in the third
tives phase – in which metals used in electronic paragraph. In the last paragraph concrete recom-
products are mined; the production phase – during mendations are formulated.
which electronic products are assembled and
manufactured; and the disposal phase – during As many issues are interrelated, there are quite
which redundant or obsolete products are dis- some linkages between the different chapters, in
posed of. Each phase has its own visual symbol. some cases there may even be a slight overlap.
Extractives Production and Disposal References of cited works are provided at the end
of the text.

Basic operational principles
I
n the view of the Dutch CSR Platform (MVO tion on Human Rights (UDHR). In the preamble of
Platform) and GoodElectronics, there are the Declaration, “every organ of society” (which
a number of general principles which are includes the corporate sector) is called upon
essential for the implementation of an effective to take “progressive measures” so as to “pro-
and credible CSR policy. This chapter is based on mote respect for these rights and freedoms and
the 2007 CSR Frame of Reference published by secure their universal and effective recognition
the CSR Platform as well as the joint vision of the and observance”. Two other important standards
participants of the CSR Platform on supply chain should be noted. In the area of labour practices,
responsibility. GoodElectronics is approaching the the ILO Conventions provide an important norma-
electronics industry on the basis of the Com- tive basis, while the 1992 Rio Declaration on
mon Demands, a set of principles elaborated and Environment and Development has a key role with
adopted by the participants of the GoodElectron- regard to the environment.
ics network in 2007. In addition to the standards and treaties prima-
rily oriented towards governments, international
Some elements are derived from recent proposals guidelines and standards that specifically address
by John Ruggie, the Special Representative of the corporate responsibilities have also been devel-
United Nations Secretary-General on business & oped. These include the OECD Guidelines for
human rights. Also included are recent proposals Multinational Enterprises and the ILO Tripartite
by the European Coalition on Corporate Justice Declaration of Principles concerning Multina-
(ECCJ) to improve corporate accountability for tional Enterprises and Social Policy. The OECD
environmental and human rights abuses. Convention on Combating Bribery of Foreign
Public Officials in International Business Transac-
Concrete proposals towards the development and tions deserves special mention. The International
implementation of codes of conduct, remediation Organization for Standardization (ISO) is in the
and complaint procedures were borrowed from the process of developing an International Standard
Clean Clothes Campaign. providing guidelines for social responsibility. This
guidance standard will be published in 2010 as
The general principles on CSR formulated in this ISO 26000 and compliance is voluntary. Although
chapter are put in perspective by linking them to the guidance standard will not include require-
the current state of affairs in the electronics sector. ments and will thus not be a certification standard,
it may be a useful tool for companies interested to
The CSR Frame of Reference is based on relevant improve their CSR performance.
internationally agreed standards, agreements,
operating principles and processes. While inter-
national treaties, declarations, guidelines and Due diligence and duty of care
covenants primarily define the social, ecological
and economic responsibilities of governments, it An important concept advocated by John Ruggie
is clear that they also have a direct and indirect concerns due diligence. Due diligence is pre-
bearing on companies. A primary normative basis sented as a comprehensive, proactive attempt to
can be found within the 1948 Universal Declara- uncover human rights risks, actual and potential,
over the entire life cycle of a project or business Supply chain approach
activity, with the aim of avoiding and mitigating
those risks (Ruggie, 2009). Four core elements of International supply chains are becoming ever
human rights due diligence are: more complex as a result of the
outsourcing of manufacturing and other business
1 companies having a human rights policy; processes. Decisions to outsource activities are
2 companies assessing human rights impacts of frequently motivated by the desire to save costs
company activities; and spread risks. It is precisely for that reason
3 companies integrating those values and find- that companies have to take extra care to avoid
ings into corporate cultures and management violations of CSR standards in their production
systems; and supply chains. Supply chain responsibility
4 and companies tracking as well as reporting is a core concept for companies in this respect.
performance. Supply chain responsibility implies that a company
does all it can to enable, promote and implement
Due diligence comprises reasonable steps by responsible business practices throughout its
companies to become aware of, prevent, and supply chain. The CSR Platform considers three
address adverse impacts of their activities and positions to be important. Firstly, supply chain
relationships. These steps may vary depending transparency and traceability are relevant. In order
on factors such as country context, the nature of to flesh out supply chain responsibility it is neces-
the activity and industry, and the magnitude of sary that companies are more open about the ori-
the investment or exchange. Avoiding complicity gin of their products and about how they deal with
is part and parcel of the responsibility to respect social problems occurring in their supply chains
human rights, and entails acting with due diligence (their supply chain management). Secondly, it is
to avoid knowingly contributing to human rights important to promote supply chain responsibility,
abuses, whether or not there is a risk of legal which companies are currently taking on voluntar-
liability. In short, both operating in contexts where ily and on the basis of self-regulation, in order to
abuses occur and the appearance of benefit- make chains more sustainable. Governments and
ing from such abuses should serve as red flags civil society organisations can stimulate compa-
for companies to ensure that they exercise due nies in this respect in a large number of ways.
diligence, adapted for the specific context of their Thirdly, it is necessary to legally anchor minimum
operations (Ruggie, 2008). requirements for supply chain responsibility in
order to be able to tackle abuses and free riders
A more stringent approach stipulates that parent (supply chain liability).
companies should be held liable for the environ-
mental and human rights impacts of their subsidi- The notion of supply chain responsibility has only
aries and the contractors which they have the right surfaced in the electronics sector pretty recently.
to control. A company should have a duty of care Sony, for example, has been publishing environ-
to ensure that human rights and the environment mental reports since 1994, but it is only as of
are respected throughout its sphere of responsibil- 2000 that some electronics companies started
ity. Companies should take reasonable steps to looking at labour conditions in their supply chains
identify and prevent human rights and environ- (SOMO, 2009).
mental abuses within their sphere of responsibility.
Large companies should be required to report on GoodElectronics and the Dutch CSR Platform
their environmental and human rights impacts and expressly promote supply chain responsibility
risks: large companies should have clear stand- throughout the supply chain, or in other words for
ards to which they report risks and impacts of the overall production cycle of electronic equip-
their activities within their sphere of responsibility ment, from extractives to production to e-waste
(ECCJ, 2009). and recycling. Companies should not limit their

supply chain responsibility to the first tier suppliers is Individual Producer Responsibility. IPR provides
only. At this moment, however, no company fully a feedback loop to the product designers of the
agrees with this principle. end-of-life costs of treating discarded electronic
products and thus an incentive to design out those
Electronics companies are still far from transpar- costs (Greenpeace, 2009). Several companies
ent about their supply chains. A small number of have started taking initiatives in this field. In 2008,
companies (to date: Fujitsu, Dell and HP) have GeSI developed an end-of-life management tool
published concise lists of their first tier suppli- that will be integrated into its existing E-TASC self-
ers. This is a step in the right direction. However, assessment questionnaire for suppliers.
essential information about the first tier suppliers
as well as all information about further tier suppli-
ers is not provided. Multi-stakeholder approach
Electronics companies have been pressured to Adopting a multi-stakeholder approach is an

recognise their responsibility to extend supply essential condition for a credible and effective
chain management to include sourcing and min- CSR policy. One of the key elements is to identify
ing of metals. Implementation of internationally all relevant stakeholders and the degree of their
accepted environmental, social and labour stand- involvement and influence. Employees, trade
ards for achieving best practice in CSR through- unions, local communities, suppliers, individu-
out the supply chain is the key. The electronics als, civil society organisations and other relevant
industry as a whole consumes significant quanti- stakeholders should be involved in defining and
ties of various metals (makeITfair 2008). A number implementing CSR policy and participating in
of individual companies have started to heed this external verification of the implementation of CSR
call. In June 2009, the industry’s sustainability programmes and policies.
initiatives EICC and GeSI initiated a Supply Chain
Mapping Project. This research project, commis- In electronics there are no multi-stakeholder
sioned to the American organisation Resolve, will initiatives. Neither do the industry’s sustainability
investigate the supply chain for tin (solder), tanta- initiatives engage with stakeholders on a structural
lum (capacitors and deposition targets), and cobalt basis. Individual companies as well as EICC and
(batteries and magnetic recording media) used GeSi have been organising one-off stakeholder
in electronics. The purpose of this project is to 1) consultations, but generally in a top-down man-
create a picture of the electronics supply chain for ner. In selected cases of labour rights abuses or
these metals; 2) assess suppliers’ use of codes of environmental issues companies may have some
conduct addressing social, environmental, health, contact with civil society organisations. The code
and labour issues; and 3) identify the challenges of of conduct of the EICC has been unilaterally devel-
collecting this data and consider ways to enhance oped by its corporate members – no stakeholders
and maintain transparency of the supply chain were involved. The same holds true for individual
(Resolve, 2009). companies. Credible multi-stakeholder code
initiatives, however, require companies, unions
On the other end of the supply chain there are and NGOs to work together to promote improved
urgent issues to deal with as well. In accordance labour practices through code compliance.
with the principle of Extended Producer Respon- Outside the electronics sector, in the garment and
sibility (EPR) companies are pressured to address related consumer product sectors, such initiatives
the lifecycle issues of products – especially what do exist, including the Ethical Trading Initiative in
happens to them at the end of their life. In other the UK, the Fair Wear Foundation in the Neth-
words, to develop and implement policies about erlands, the Fair Labor Association, and Social
how to deal with electronic waste (Greenpeace, Accountability International in the US.
2006). A related concept promoted by Greenpeace
Corporate governance ers, on the basis of a focused risk assessment.
Other companies have looked into the situation in
Companies need effective and transparent corpo- China where independent unions are not allowed,
rate governance in order to operate properly which undermines the freedom of association and
and be trusted to do so by third parties. Corporate collective bargaining. To respond to this situation
governance brought into alignment with CSR, as policies regarding alternative workers’ representa-
well as other criteria, is a vital condition in this tion have been developed.
regard. The company board should ensure that
CSR activities and responsibilities are incorporat-
ed explicitly in corporate policy and that mecha- Developing policy: codes of conduct
nisms and management systems are developed and sector-based initiatives
that are conducive to creating a relationship of
mutual trust between the company and the society The responsibility assumed for CSR by a company
in which it operates. Remuneration of board mem- should be reflected in its policy as expressed in a
bers should be linked to targeted achievements in code of conduct and action plan. In order to avoid
the field of CSR. a plethora of codes, each defined by an individual
company, this is best achieved through a cross-
sector approach, in which sector-level or product-
Analysis of risks and consequences level agreements are made with the entire industry
and in consultation with relevant stakeholders.
Companies should gain an understanding of the
social, environmental and economic conditions in A good code meets certain requirements: it should
any given country, region and/or sector in which be comprehensive, meaning that it should apply to
they operate. Companies should also analyse all workers affected by labour practices for which
the consequences of their business activities in the company has some measure of responsibil-
the supply chain and/or the community so that ity. This includes all workers employed directly by
their business operations can fully comply with the company as well as employees who work in
CSR standards. Solid analyses of the risks and the company’s supply chain, regardless of their
consequences of their business practices allow particular status or relationship to the company.
companies to set priorities and identify which CSR Women workers, migrant workers, and other
elements are particularly at risk. This will include specific groups of precarious workers should be
information on how these risks may be avoided, or explicitly covered. A code should be credible,
what plan may be developed in order to achieve meaning it should include all provisions based on
compliance with these standards within a reason- the ILO Core Conventions, the Tripartite Declara-
able timeframe. tion of Principles, as well as other important work-
place issues that are addressed by the Universal
To take into account the consequences of their Declaration of Human Rights.
business practices throughout the supply chain,
electronics companies should carry out country- To be a useful tool, the company’s code should be
level risk assessments, for each country or region circulated among its employees and the employ-
where they are producing or sourcing from. ees of its suppliers, the code should be available
Next, efforts to mitigate these risks need to be to the public on request, and should be accessible
undertaken. Public reporting on the risk analysis on the company’s website. Efforts should also be
as well as the mitigation of risks should be part made to ensure that workers are informed and
and parcel of the process. Some good practices aware of the code, ideally through explanatory
exist: Apple has formulated clear policy regarding training courses. The code should, for example,
the recruitment and treatment of migrant work- be posted in a prominent place in the workplace in

the first language(s) of the workers in the respec- in quality assurance and environmental manage-
tive country and copies of the code should also be ment systems, a CSR management system will
made available to the workers who make the com- consist of an explicitly defined corporate policy
pany’s products. It is also important to provide a and processes for ensuring compliance with the
picture version of the code for illiterate workers standards. Such a system should also include
(Clean Clothes Campaign, 2008). self-monitoring processes to ensure that com-
panies themselves can demonstrate whether
Some individual company codes set higher stand- and/or to what extent they are acting in line with
ards – examples are the codes of Apple and HP the standards introduced, and what corrective
which contain stronger worded clauses regarding measures they must take in order to eliminate any
freedom of association and collective bargaining non-compliance.
for example.
External verification
Implementation: management system,
internal monitoring Independent verification processes are the final
building block of an effective CSR policy. The
The first step is for companies to monitor their quality, usefulness and credibility of a company’s
own practices in order to establish whether these efforts, as well as the management systems and
are consistent with their internal CSR policies, processes it has introduced, are strengthened by
goals and implementation plans. As is customary independent verification of its CSR programme.
The Electronics Industry Citizenship Coalition (EICC) is an industry initiative promoting a code of
conduct for global electronics supply chains to improve working and environmental conditions. The
EICC membership is available to electronics manufacturers, software firms, ICT firms, and manufac-
turing service providers, including contracted firms that design, manufacture, or provide electronic
goods. The EICC code of conduct claims to provide guidelines for performance and compliance with
critical CSR policies. EICC provides tools to audit compliance with the code, and helps companies
report progress.
Global eSustainability Initiative (GeSI) members are companies or organisations that, as a principal
part of their business, provide a service for the point to point transmission of voice, data or mov-
ing images over a fixed, internet, mobile or personal communication network, or are suppliers of
equipment which is an integral component of the communication network infrastructure. GeSI has
deployed initiatives on climate change, supply chain, energy efficiency, e-waste and public policy.
About 45 companies, both brand name companies as well as suppliers, have adopted the EICC
code of conduct. Many more have developed their own company code. In some cases the individual
company codes have supplemented the EICC code by adding clauses on labour rights. Still, in most
cases, the above formulated code requirements are not met. The EICC code of conduct falls well
short of what is considered to be the threshold standard for a code of conduct. The EICC code is
not based on international standards such as the ILO conventions, but merely refers to the Universal
Declaration of Human Rights and the Ethical Trading Initiative as its sources. Moreover, the EICC
code does not include full references to the right to organise and bargain collectively and the right
to a living wage. Neither does the code set a clear maximum on normal working hours and overtime
hours (SOMO, May 2009).
Independent verification is more than a technical Transparency and reporting
matter merely requiring the involvement of one
or several experts. All those directly involved, for Companies are expected to be transparent about
example the employees or the local community, their policy and to report on their CSR perform-
should be able to verify the extent to which a ance. The following are key transparency and
given company’s CSR policy is being implemented reporting principles:
and enforced. Such independent verification
should be conducted by an organisation without • Reports are relevant, intelligible, accurate,
links to the company that is trusted by all relevant complete and balanced. Other important ele-
stakeholders. ments are: adequate explanation, comparabil-
ity over time, comparability with affiliated firms
(subsidiaries and suppliers), topicality and
Remediation timeliness.
• Supply of information, for example back-
An effective monitoring programme is likely to ground information for labels or quality marks
discover some violations of the company’s code and information made available to the general
of conduct and/or local labour law, since few public.
factories are free of violations. The proper way to • Disclosure of data and consultation.
deal with reported non-compliance is not to cut off • Right of access to information for stakehold-
relations with the concerned supplier. Companies ers, for example consumers, about the origin
should work with factories and stakeholders to and production processes of products and
correct identified problems. services.
Electronics companies are taking steps towards Some electronics companies make use of the
establishing monitoring programmes, but generally Global Reporting Initiative guidelines for dis-
speaking this is still far from common practice closure on economic, social and environmental
in the electronics industry today. In many cases, performance. In July 2003, the Global Reporting
the monitoring element merely amounts to buying Initiative released a pilot version of the Telecom-
companies requesting their suppliers to fill out a munications Sector Supplement as an attempt to
self-assessment questionnaire or to superficial provide sustainability reporting guidance to the
visits by the company’s itself. When external veri- telecom sector that is helpful to service providers
fication is done, it is often limited to irregular visits and manufacturers alike. This Sector Supplement
of auditors who provide snapshots of conditions covers Internal Operations (specific practices
at the time of their visit – and no indication of the related to managing the organisation’s facilities
conditions before or afterwards. These external and infrastructure); Providing Access (approaches
auditors are working for commercial firms and to ensuring equitable access to telecommunica-
are not necessarily well equipped to engage with tion products and services); and Technology
stakeholders. The electronics sector admits that Applications: (indicators to cover the impacts of
there is a problem with the quality and credibility telecommunications products and services). Some
of audits and auditors, especially when it comes to indicators of the Sector Supplement are more
performing workers’ interviews (EICC, 2009). The relevant to equipment manufacturers, others are
industry sees a solution in training and certification better applicable to service providers. Since the
of EICC auditors. There is no mention of inde- telecommunication sector also interfaces with the
pendent auditing, participation of local stakehold- wider information technology sectors, some of the
ers (NGOs, trade unions) in audits, or off-site indicators and commentaries may have applica-
interviews with workers. tion beyond the telecommunication companies,
according to GRI. The Telecommunications Sector

Supplement was developed through a working where unionisation is low or where there are no
group including industry and stakeholder groups, trade unions. Worker education on labour rights is
including the Global e-Sustainability Initiative a useful tool to this end. Different types of educa-
(GeSI). tion can be distinguished including education on
labour legislation for rank and file workers, and
training of workers with an interest in representa-
Complaints procedure tion and/or trade union officials, equipping them
to organise and represent workers. To secure
The implementation of a CSR policy will involve the sustainability of the training programme local
creating channels for complaints from employ- stakeholders should be involved. Trainers neces-
ees, consumers and other stakeholders, so that sarily have to be independent from the factory
these stakeholders may at all times report alleged management and have to relate to the workers’
violations of CSR standards. Individuals providing interests. Worker education can have direct added
information on a company’s operations should not value for companies as it makes code imple-
subsequently suffer disciplinary action, discharge mentation efforts more sustainable. The costs
or discrimination. Companies should therefore of supply chain management should reduce as
have transparent and effective procedures for han- increased communication between management
dling complaints from employees, consumers and and workers helps to solve difficulties on a day-
other stakeholders, and they should cooperate to-day basis. The need for auditing as well as self-
in resolving differences quickly and fairly without assessment should therefore be reduced on the
introducing unnecessary costs, charges or other long term. It will help to decrease labour disputes
obstacles. Such complaint mechanisms should be and wildcat strikes as well as employment turno-
secure, anonymous, confidential and independent. ver. It is important to involve suppliers and buyers:
buyers have a crucial role in motivating suppliers
Again, some initiatives have been deployed by for worker’s training. Worker’s training can help
individual companies, like setting up hotlines, but increase transparency and quality of the communi-
generally speaking effective complaint proce- cation between the supplier and buyer.
dures are non-existent. Among EICC member
companies, establishing hotline and complaints Worker’s education remains rare in the electronics
procedure is still at the pilot-project stage. Where sector. Up to this date, only Hewlett Packard has
attempts have been made, it did not rise above made an attempt at facilitating independent work-
internal complaint procedures, meaning that er’s training courses. Apple has realised a training
hotlines or complaints boxes are managed by the programme in China, but this was characterised
factory management. The electronics sector has by a top-down approach, without participation of
not yet facilitated independent, external com- independent local NGOs.
plaints mechanisms. In this scenario a NGO or
a trade union that has the worker’s trust will run
the hotline and will help to establish discussion Collaboration among buyers, suppliers,
mechanisms with the factory management. NGOs and trade unions on a national or
regional level
In-factory workers education Companies should facilitate workplace dialogue

between employer and formal workers’ repre-
Workers must be enabled to monitor their own sentatives. Additionally, complementary forms of
working conditions and to discuss collective inter- collaboration among buyers, suppliers and civil
ests with the management in their factories. This society organisations on a regional or national
is especially important in regions and countries level can be set up. Early involvement of brand
name companies and suppliers with trade unions industrial relations at factory level; and the key role
and civil society on a local level is advisable, of effective recognition of freedom of association
before any conflicts over labour or environmental and the right to organise as enabling condi-
issues occur. Making contact and building trust tions. It is interesting to note also that the ILO’s
among civil society and corporate representatives guidelines for buyers participating in the Better
is key. Work programme require them to stop company
auditing in areas covered by the programme
and focus on supporting collaborative improve-
Mature systems of industrial relations – ment planning. As the MSIR approach develops
International framework agreements in conjunction with the policy of global unions to
pursue International framework agreements and
Notwithstanding the potential for progress through to develop relationships between global retailers,
involving stakeholders more directly in code brand-owners and their affiliates throughout their
enforcement,which has yet to be fully exercised supply chains, it is argued that MSIR needs to be
in the electronics industry, there are also some embraced by suppliers in the sector as much as
very vocal proponents of an alternative solution; by buyers (Holdcroft, 2009).
they claim the code monitoring approach will be
inadequate anyway. Mature Systems of Industrial
Relations (MSIR) are the alternative promoted
as a means to move beyond what are viewed
as ineffective mechanisms of social compliance
(ie, auditing, verification and reporting) and to
empower local actors and local labour institutions
in countries where existing systems of indus-
trial relations are weak or absent. Central to this
approach is an understanding that progress in the
advancement of core labour standards in produc-
ing countries needs to surpass the limited impact
(and, businesses would argue, costs) of self-
regulatory mechanisms and be rooted in freedom
of association, dialogue and collective bargaining
(Gregoratti and Miller, 2009). Unfortunately, posi-
tive models of mature industrial relations whereby
electronics workers are members of national
unions and engage in collective bargaining on
wages and conditions with their employer are few
and far between in the sector. The greatest inci-
dence is to be found in the European operations
of European companies where workers are directly
employed: a category of electronics production
employment which is rapidly vanishing (Gregoratti
and Miller, 2009).
Critical elements of an MSIR approach are the

need to rationalise all current codes into one code,
encompassing the ILO core labour standards;
the replacement of social auditing with mature

The global electronics industry
at a glance
F
or the purpose of this overview, the term tion country, as well as several Eastern European
electronics sector refers to a broad spec- countries including Hungary, Poland and the
trum of information and communication Czech Republic.
technology companies producing a wide variety of
electronic goods. These goods include comput- Electronic equipments are highly complex con-
ers, office equipment, lap tops, mobile phones structions consisting of a wide range of diverse
and other communications equipment, consumer components. A typical computer, for example,
electronics (such as mp3-players, webcams and is made up of an external keyboard, casing and
game consoles), semiconductors (chips), and screen, as well as internal circuitry and wiring
miscellaneous electronic components, or in other including printed wiring boards (PWBs), semicon-
words: any product with a circuit board. ductors, hard drives, interface sockets, cables,
etc, many of which are themselves composed of
At least until the third quarter of 2008, the global numerous individual parts. The manufacture of this
market for electronics products was a strong type of equipment is a truly global industry.
growth market. From $1.4 trillion in 2004, the
market has grown at an average rate of about The electronic products supply chains form an
12.6% per year, to an estimated $2.0 trillion in intricate web, with brand name companies that
2007. October 2007 prognosis expected the have many suppliers, who in turn have multiple
global market to reach approximately $3.2 trillion suppliers themselves. These buying companies
by 2012. Industrial products, computer electron- may themselves also be component suppliers,
ics and semiconductors accounts are the key as is the case with Hitachi or ASUS, for example.
sectors. However, the current economic crisis is Outsourced production of small components for
having its effect on the electronics sector as well, handsets can stretch into supply chains of nearly a
although it is difficult to predict how exactly. Some dozen companies. In total, these complex supply
segments of the market, including the PC market, chains encompass thousands of companies. A
are expected to suffer a serious decline. Other remarkable characteristic of this supply chain is
segments, however, are expected to do much bet- the uneven distribution of market power, skewed
ter, including the sales of notebooks and specific in favour of the big brand name companies
segments of the mobile-device market such as (SOMO, 2008). 75% of the multi-billion mobile
smartphones (BCC Research, 2007). communications industry is in the hands of just
five companies (Motorola, SonyEricsson, Nokia,
Historically, the electronics industry has seen Samsung and LG) (Consumers International,
competition between the USA (Silicon Valley) and 2009). A similar picture emerges for the comput-
Japan. Since its start, the electronics production ing industry, with HP, Dell, Acer, Fujitsu, Lenovo as
base has diversified. In the Asian-pacific region, well known players.
China, Japan, South Korea, Malaysia, Singapore,
Taiwan and the Philippines are the eight largest A related common characteristic of the electron-
producers of electronics products. Indonesia, ics sector is that production is outsourced, or
Vietnam and India are on the rise. Outside this subcontracted. Up to 75% of global electronics
region, Mexico is an important electronics produc- production has now been outsourced from Origi-
nal Equipment Manufacturers (OEMs) or brand- be defined as an aggressive order market, where
name companies such as Hewlett Packard, Dell demand may change on a daily basis. As a result,
and Apple, to contract manufacturers (CMs) (IMF, workers at all tiers are expected to be highly flex-
2009). For the mobile phone industry the extent to ible, in terms of working hours and overtime.
which brand companies outsource final products
varies between more than 60 percent (Sony Erics- In terms of consumption, China and India are the
son) and less than 35 percent (Nokia) (SOMO, obvious growth markets for electronic (consumer)
2008). At the level of the contract manufacturers, goods.
there is significant market concentration, with
five major CMs producing electronic products for Worldwide this entire sector employs millions of
all the major brands. These five are: Flextronics people, both skilled and unskilled workers. Around
(Singapore), Foxconn (Hon Hai) (Taiwan), Celestica the world there are an estimated 70 million metal-
(Canada), Sanmina SCI Corporation (USA) and workers (IMF, 2005).
Jabil Circuit (USA). Despite being for the most
part unknown to the general public, the largest Generally speaking jobs in the electronics sector
contract manufacturers are themselves major are characterised by low pay, substandard work-
multinational companies that have seen extraor- ing conditions, excessive working hours and are
dinary growth. The current number of hard disk only offered as short-term contracts, often via
drive (HDD) suppliers worldwide is reduced to five employment agencies. The majority of work-
only – Seagate, Western Digital, Hitachi (owns ers engaged in electronics production today are
the former disk manufacturing division of IBM), young women.
Samsung, and Toshiba – which leaves computer
brands little choice. This is topped off by a traditional hostility to
unions by the major companies in the sector, low
To a large extent, the components used in the unionisation levels, and low job security due to the
manufacturing of computers are interchangeable. high numbers of workers who are employed under
Manufacturers do not incur significant costs when temporary contracts, either directly by a company
switching basic component suppliers. As a result, or through labour agencies.
supplier power is low (SOMO, 2009).
This has led to abuses, with risks and costs
A major element of the manufacturers’ strat- passed down the supply chain: sub-standard
egy to attract business from the brand name working conditions and inadequate environmen-
companies is to locate in countries where wage tal standards at some suppliers are tarnishing
costs are lower, resulting in a virtual race to drive the perceived clean image of the industry. The
down labour costs. As competition to take over economic crisis is making things worse: factories
manufacturing for the brand name companies has are closing down or are relocated to regions were
intensified, production has moved from countries labour is cheaper still; regular workers are increas-
that were once considered sufficiently low cost, ingly replaced by contract workers; more workers
such as Mexico, to ever cheaper locations (IMF, are being hired through labour agencies instead of
2009). Companies in search of lowest production directly by producing companies.
costs and maximum flexibility are attracted by
Export Processing Zones or Special Economic Beyond supply chain issues, there are further
Zones established by governments to expand their unresolved problems relating to the use of sub-
comparative advantages over other production stances which are hazardous to the environment
countries. and human health as well as to systems for taking
back and recycling old appliances, which are often
Despite, or even as a result of the economic still inadequate.
downturn, the electronic products market can

Part 2.
Social aspects
Gender
Issues their households, the elderly, and even in their

communities. That in itself already means they
Globalisation has led to the feminisation of labour, have lives different from those who don’t take on
especially in export sectors, such as electron- those (usually unpaid) jobs, for example in terms
ics and garments. According to the ILO, women of the time spent on those tasks, in terms of their
made up 40.5% of the global labour force in 2008 health, etc. (Clean Clothes Campaign, 2006). On
(ILO, 2009). Women also make up the majority top of this, women are also participating in the
of informal sector workers. Entering the labour cash economy – performing paid jobs. Being
market has brought women greater economic active, in a labour union for example, is an addi-
independence, greater equality in the household tional, often burdensome task.
and personal empowerment. Gender, however,
influences labour practices in countless ways – Women are made to pay the social costs of
ideas about the jobs women can do, how they flexible labour markets at the expense of their
should do them, their wages, their relationship to own health, gender equality and their families’
employers and the law. It is important to be clear future prospects. Missing from official statistics,
about the gendered nature of the processes that these costs are effectively a hidden subsidy to
underpin the current global industry, as these the brands in whose supply chains women work
processes facilitate rights violations (Clean Clothes (Oxfam, 2004).
Campaign, 2006). More strongly put, gender dis-
crimination forms the basis for women’s employ- Cultural factors hinder women’s mobility and limit
ment conditions in the global economy. Measures their access to jobs. In many countries and cul-
to improve labour standards that do not challenge tures girls have limited access to education and as
the underlying causes of gender discrimination risk a result are less equipped to apply for higher-level,
upholding gender divisions and oppression. This better-paid jobs.
applies to the formal economy, but is particularly
true for the informal economy. Women workers make up the bulk of the labour
force in the global electronics supply chains,
In most cases, women are the main producers in particularly in the manufacturing phase. While
the so-called “care” economy – meaning they are mining is predominantly a man’s job, women are
“producing” the bulk of the care for their families, also amply represented in the disposal phase. In
Everything from the level of payment and how quickly a worker is paid, to the terms of your job –
such as lack of a contract, no medical or maternity leave, no right to organise, or no pension, down
to the way a supervisor speaks to or touches a worker – is informed in part by gender-based notions
of what is acceptable. If you consider what this means in relation to the stress created by job insecu-
rity and by verbal and physical harassment, the malnutrition created by low pay, the exhaustion that
results from forced overtime, and the inability to do anything about unsafe working practices and
environments, then the roll-out effect on a woman’s health and that of her children is immediately
evident (Clean Clothes Campaign, 2006).

manufacturing, women are often employed on a Women workers are discriminated against in many
temporary and part-time basis. Manufacturing of ways:
electronic products and components predomi-
nantly takes places in special economic zones. • Women earn less than men – even for same or
The vast majority of workers employed in such similar work (ILO, 2008).
zones are women; a few years back an estimated • In general, women are more likely than men
70-90% (GWIT, 2003). Moreover, the labour force to be hired on short-term, seasonal or casual
in such zones is to a large extent made up of terms and thus work without the protection
migrant workers. Migration is more demanding on that comes with long-term contracts.
women workers, precisely because of their caring • The organisation of work in export-oriented
responsibilities. manufacturing is not tailored to the lives and
responsibilities of women workers; long work-
Women have a marginal position in trade unions ing hours; remuneration below a living wage;
and institutions dealing with labour policies. forced overtime; late nights shifts; irregular
Traditionally, labour unions have a male-dominated working hours and changing shifts, etc. have a
leadership and are not focused on organising disproportional effect on women.
women workers or taking up gender issues. • Women workers receive less training and
Worse, trade unions in some cases reproduce promotion – managers and supervisors are
the norms and behaviour that treat women as generally men.
a subordinate category (Franck, 2008). Women • Women are less easily employed after giving
regard unions with a scepticism. As freedom birth or a starting family. Single women are
of association is not well protected throughout preferred over married women.
electronics supply chains, women workers’ rights • Specific benefits for women workers (mater-
are very poorly protected, particularly in economic nity leave etc.) are often not well arranged for.
processing zones. Unions are aware of this situ- • Women sometimes have to undergo forced
ation and are working on it. In 2005, for example, pregnancy tests.
the International Metalworkers’ Federation Con- • In terms of occupational health and safety, the
gress made the decision to mandate the inclusion needs of women are insufficiently taken into
of women on the IMF Executive Committee. account. Often, workers are not allowed to sit
during working hours or to use the bathroom
It is argued that women workers are preferred when needed. From a reproductive health
because they are seen as a cheap workforce point of view this is particularly detrimental for
and perceived as more docile than men. Also women workers, causing bladder infections
their nimble fingers would make them more fit for and worsening menstrual pains. For fear of
assembly work. Arguably, women are perceived losing their jobs, women will put off informing
as more suitable than men for detail work because their employer of their pregnancy, with the risk
they are seen to have ‘natural’ traits, such as of working longer hours and further into the
manual dexterity (‘fast fingered women’), patience, pregnancy than is good for mother and child.
a tendency to be meticulous, and docility (Fox, Also, working with chemical substances is
2002). These allegedly innate feminine character- particularly hazardous for pregnant or nursing
istics are required to manipulate intricate wires workers. In the manufacturing of electronic
and repeat the same finite number of tasks all day equipment as well as during the disposal of
(Ferus-Comelo, 2006). electronic waste, women workers get into
contact with toxic materials, risking a range
of serious health risks such as cancer, miscar-
riage and birth defects (Ladou and Bailar,
2007).

• Women workers are exposed to intimidation • Contribute to the reform and engendering of
and abuse, sometimes with a sexual slant, by labour standards as well as of company and
superiors and co-workers, as well as while industry codes of conduct.
travelling between work and home, especially • Organisation of code monitoring in an engen-
late at night or early in the morning. dered manner. Make sure audit teams have
a gender balance that matches that of the
Most codes of conduct do not include gender workforce.
aspects. If reference is made to gender issues it is • Fight discriminatory policies and practices that
under ‘non discrimination’; more specific gender put women in a lesser position.
issues such as childcare and reproductive rights • Promote equal opportunities in the workplace
are not covered. Another limitation of codes of throughout the supply chain.
conduct is that they only apply to the upper tier of • Consider affirmative actions to accommo-
a buyer’s value chain. In this way, a considerable date the specific position of women workers,
portion of (women) workers are not reached. especially in view of their family and care
responsibilities. These could include preferen-
tial transfer of temporary contracts to regular
Standards contracts and the extension of employment
benefits, such as paid maternity leave, annual
• ILO Discrimination (Employment and Occupa- leave and sick leave.
tion) Convention No 111. • Reorganise working hours and shifts to meet
• ILO Equal Remuneration Convention No 100. women’s requirements.
• Adjust duties and workload of women during
pregnancy and breastfeeding.
Existing initiatives • Allow women workers regular toilet breaks;
and nursing women workers breast-feeding
• ‘Gender equality at the heart of decent work’, breaks.
an ILO Campaign in 2008-2009 on gender • Ensure workers have access to childcare
equality and the world of work. Objectives of facilities.
the campaign: increase general awareness • Facilitate education for worker’s children.
and understanding of gender equality issues
in the world of work; highlight the specific link-
ages between gender equality and securing
decent work for all women and men; promote
the ratification and application of key ILO gen-
der equality labour standards; and advocate
the importance of overcoming existing barriers
to gender equality as beneficial for all.
Recommended steps
• Comply with all applicable laws, nationally and

internationally accepted standards on gender
equality, whichever offer greater protection.
• Get informed about gender issues and acquire
an engendered understanding of labour and
social issues throughout the supply chain.

Conflict commodities
Issues
Human rights risks that companies operating in
Wars need money. Natural resources such as tim- or sourcing from conflict zones should take into
ber, diamonds and minerals play an increasingly account include:
prominent role in providing this money, which is
often used to fund armies and militias who murder, • The expelling of people from their communi-
rape and commit other human rights abuses ties.
against civilians. Global Witness defines conflict • Forced labour and other forms of workers
resources as natural resources whose systematic exploitation, including child labour.
exploitation and trade in a context of conflict con- • The handling of questionable assets.
tribute to, benefit from or result in the commission • Illicitly made payments, such as bribes.
of serious violations of human rights, violations • The abusive engagement of security forces.
of international humanitarian law or violations • The trading of goods in violation of interna-
amounting to crimes under international law. tional sanctions.
• Allowing the use of company assets for human
Companies operating in or sourcing from conflict rights abuses.
zones can face a number of specific human • Directly or indirectly providing the means to kill
rights risks. The electronics industry as a whole and financing international crimes.
consumes significant quantities of various metals • Contributing to a climate enabling sexual
sourced from conflict areas. Tin (solder), tantalum violence against women.
(capacitors and deposition targets), cobalt (bat-
teries and magnetic recording media), tungsten
(circuit boards) and gold (motherboard contacts) Standards
are important.
• The Extractive Industries Transparency Initia-
As a result of developing notions on extended tive (EITI) sets a global standard for transpar-
supply chain responsibility beyond the first or ency in oil, gas and mining. The EITI is a coali-
second tier suppliers, electronics companies are tion of governments, companies, civil society
increasingly acknowledging that the mining phase groups, investors and international organisa-
is part of their supply chain. tions. The EITI is a standard for companies to
Ores mined in the Democratic Republic of Congo include cobalt, (cobaltite), tin (cassiterite), tantalum
(coltan) and tungsten (wolframite), and gold. These resources have fuelled one of Africa’s most brutal
wars and have contributed to grave human rights abuses by Congolese and foreign actors. Politi-
cians, military and militia groups have plundered the country’s natural wealth and used it to enrich
themselves at the detriment of the population. The frequent use of child soldiers and the brutal
sexual violence against women characterise this conflict (The Enough Project, 2009). This said, an
overly facile equation of mineral export wealth and war-fighting capacity should be avoided. Reform
of the natural resource sector in the DRC in the sense of ending the trade in natural resources or
bringing it under government control does not equal peacebuilding (Pole Institute, 2009).

publish what they pay and for governments can be a motor behind development and sta-
to disclose what they receive. The EITI, in a bility instead of a source of conflict. Revenues
nutshell, is a globally developed standard from natural resources often stimulate or
that promotes revenue transparency at the continue conflict and human rights violations
local level. and threaten the just established fragile peace.
In the mean time only companies, some indi-
viduals and corrupt governments profit while
Existing initiatives the local population hardly benefits from their
countries’ natural wealth.
• makeITfair is a European project focusing
on the electronics industry, especially on
consumer electronics like mobile phones, lap- Recommended steps
tops and MP3 players. makeITfair publishes
information on the use of metals in computers, • Extend supply chain management to include
mobile phones and cars, and has released a the sourcing and mining of metals. Electron-
List of Principles on the extractive phase of ics companies should create a tracing system
the electronics supply chain. paired with credible monitoring of the system
• In June 2009, EICC-GeSI initiated a Sup- by independent third parties.
ply Chain Mapping Project, in response • Demonstrate, with credible written evidence,
to makeITfair campaigning pressure. This the exact origin of mineral supplies, the routes
research project lead by Resolve. will they have taken and the identity of those
investigate the supply chain for tin, tantalum involved in the chain of custody, including
and cobalt used in electronics. The purpose intermediaries or third parties who have han-
of this project is to create a picture of the dled them.
electronics supply chain for these metals; • When sourcing from conflict or high-risk
assess suppliers’ use of codes of conduct zones, exercise stringent due diligence regard-
addressing social, environmental, health, and ing mineral suppliers. Companies should find
labour issues; and to identify the challenges out exactly where the minerals were produced
of collecting this data and consider ways to (not only the broad geographical area, but
enhance and maintain transparency of the the precise location and mine), by whom they
supply chain. were produced and under what conditions
• Raise Hope for Congo, a campaign by the (including use of forced labour, child labour,
Enough Project, lobbies companies to under- health and safety and other labour conditions)
sign the Conflict Minerals Pledge. (Global Witness).
• Fatal Transactions is an international network • Refuse to buy minerals if such information is
of NGOs that believe that the natural richness not available or if there are indications that the
of Africa, be it gold, diamonds, oil or copper, minerals have passed through the hands of
In August 2008, the UK trading company Afrimex was condemned for breaking the OECD Guide-
lines by sourcing minerals from a Congolese war zone. In the Afrimex case, the UK National Contact
Point (NCP) – the British government body which considers complaints brought under the OECD
Guidelines for Multinational Enterprises – affirmed that Afrimex initiated demand for minerals from a
conflict zone and used suppliers who had made payments to RCD-Goma. It concluded that Afrimex
had failed to contribute to sustainable development in the region and to respect human rights. The
NCP also stated that Afrimex applied insufficient due diligence to the supply chain, sourcing minerals
from mines that used child and forced labour (Global Witness, 2008).

warring parties, benefited them in other ways,
or otherwise involved human rights abuses.
• In extreme situations, consider a ban on
sourcing from conflict areas where there is
a likelihood of money or services directly or
indirectly supporting rebel groups or state
actors committing war crimes and other seri-
ous human rights abuses (Global Witness,
makeITfair).
• Work to make the trade in minerals from con-
flict zones more transparent, thereby assist-
ing the formalisation of the sector (Resource
Consulting Service). This would also benefit
artisanal miners.
• Address resource-related conflicts in a way
that tackles their particular character: in other
words, by proactively addressing the trade
that underlies the war, as well as the war itself.
• Ensure investment in the natural resource sec-
tor is equitable, sustainable, transparent and
non-corrupt, and brings long-term benefit to
the state and the population, thereby helping
to prevent the seeds of future conflict (Global
Witness). Support livelihoods and economic
opportunities for miners, including artisanal
miners (Enough Project).
• Call for a public statement of concern
denouncing the injustices occurring at the
extractive phase (makeITfair).
• Positively contribute to reforming international
policy, especially pushing for the international
community, at UN level, to adopt a definition
of conflict resources which could be used to
trigger action to prevent natural resources
from fuelling conflict, and which could form
the basis of revised national laws allowing
people who trade in conflict resources to be
prosecuted (Global Witness).

Local communities
Issues Moreover, the arrival of well-resourced companies

seeking to win over local communities can also
Companies have an enormous impact on the lead to increased violence and social conflict, as
rights of individuals and communities. Allegations some people are excluded from the benefits of
of human rights abuse are particularly high in the economic development. This can be exacerbated
extractive industry. Mining sites are often estab- by the lack of transparency in the way companies
lished in rural areas where people live and work. award community contracts and payments. Affect-
Also, manufacturing facilities as well as e-waste ed communities are frequently denied access to
dismantling sites or dumping grounds are often information about the impact of company opera-
set up in the close vicinity of human settlements. tions and excluded from participating in decisions
The rights and livelihoods of local communities are that affect their lives, increasing insecurity and
not necessarily well served with the introduction of deprivation. When human rights abuses do occur,
such economic activities. Communities have been governments cannot or will not hold companies
forcibly removed from their lands to make way for to account. States have privatised many state
extractive or manufacturing activities. The social services including the right to education, health,
and environmental impact of mining, but also of and water. However, states often fail to ensure that
manufacturing and irresponsible e-waste disposal companies deliver these services without discrimi-
on local communities can be most disrupting. nation (Amnesty International, 2009).
Agricultural fields, forests and sources of water are
destroyed by contamination, pollution or overuse. In the case of large scale mining operations, small
Often it concerns marginalised peoples, including scale artisanal miners are often obliged to make
in some cases indigenous peoples, with very inad- way. Military and paramilitary oppression by state
equate access to social services, including poor and private forces, acting on behalf of mining
access to justice. Land rights of (indigenous) peo- companies, is a serious issue. It happens that
ple have been violated, their ancestral domains mining laws are changed to accommodate the
not being well protected. As a result, traditional interests of mining companies, while protocols
livelihoods are endangered. protecting indigenous peoples and the environ-
ment continue to be diluted (Mines and Communi-
ties, 2008).
In 1959, the Dutch manufacturing giant Philips Electronics set up a manufacturing plant in Pamplona,
Las Piñas, in the Philippines, to produce light bulbs and (later) consumer electronics. The factory
was closed in 1995 but 12 years later residents living in communities around the Philips plant were
shocked to learn that the water in their wells was contaminated. Philips admitted to using a highly
toxic chemical known as TCE, (trichloroethylene), a solvent used mainly to remove grease from
metal parts at the Las Piñas plant. The use of TCE, a highly toxic chemical linked to cancer and other
serious health effects, was banned globally under the Montreal Protocol in the early 1990s. Two
years after the initial disclosure of TCE contamination, the residents of the affected areas still do
not have a clear picture of the extent and impact of the contamination, reports the Philippines NGO
Kaisampalad.

Standards Recommended steps
• United Nations Declaration on the rights of • Comply with all applicable laws, nationally and
indigenous peoples. internationally accepted standards on commu-
• ILO Indigenous and Tribal Peoples in Inde- nity rights, whichever offer greater protection.
pendent Countries Convention No 169. • Apply the principle of free, prior and informed
consent to all communities that are likely to be
A key element of both the UN Declaration and the affected by business operations.
ILO Convention is the principle of free, prior and • Refrain from operating in places where com-
informed consent of indigenous peoples for communities are opposed to corporate presence.
panies to start their operations. This form of con- In this sense ‘community consent’ may be
sent requires the participation of indigenous peo- a stronger norm than the increasingly heard
ples at all stages in the decision making, planning, phrase ‘social license to operate’.
implementation, and evaluation of any activity that • Where applicable, ensure that an agreement
affects their rights and interests. Their consent is reached with communities on just and fair
must be sought and obtained without recourse to compensation of losses suffered.
coercion. The process of obtaining consent must • Where possible, ensure that communities are
allow sufficient time for all concerned to learn offered the option of return.
about the process, obtain information, engage • Contribute to putting in place a system of
in full discussion, and reach an agreement. All regulation that ensures redress for those
relevant information must be made available to the affected and prevents the pursuit of profit at
community. Consent must be clearly demonstrat- the expense of human rights.
ed, in keeping with the decision making structures • Inclusion of such standards and principles in
of the indigenous peoples involved company or industry codes of conduct that
cover the entire supply chain.
Existing initiatives
• Mines and Communities exposes the social,

economic, and environmental impacts of
mining, particularly as they affect indigenous
and land-based peoples. The organisations
and individuals behind Mines and Communi-
ties demand far greater accountability and
transparency on the part of the minerals’
industry. The key demands are encapsulated
in The London Mining Declaration, originally
launched in 2001 and revised in 2008.
The Bushveld Igneous Complex is an important reservoir of platinum group metals in South Africa.
The company Anglo Platinum is operating a mine in Potgietersrust, in the Northern Limb of this
region. To allow for an intended output increase to approximately 12,190 kilograms per annum, Anglo
Platinum required the resettlement of three local villages with a total population of 17,000 people. In
2001, the village of Ga Pila was removed. The villagers are now living in poor conditions at a nearby
farm. According to a South African NGO: “Ga Pila residents were subjected to forced removals like
those in the time of apartheid”. The people of the two other villages, Ga Puka and Ga Sehaolelo, have
continued their protest against the planned removal by Anglo Platinum (SOMO, 2007).

Organising and collective
bargaining
Issues It is also one of the most difficult human rights

standards to monitor.
The global electronics sector provides millions Discrimination of workers who openly join a union
of jobs, mainly in developing countries. Whereas or attend union activities is frequently observed.
electronics production falls largely within the Workers are subject to dismissal, discrimination,
formal economy, informalisation is undermining harassment, intimidation or retaliation because
compliance to labour standards. Equally, employ- they join a trade union or participate in trade union
ment in the informal economy – such as the min- activities.
ing of metals used in electronic equipment and the
disposal of electronic waste - is mainly precarious. As a consequence, workers are unable to defend
Both formal and informal workers are in the main their rights and interests. Flexible, insecure, infor-
unorganised; the levels of unionisation in the elec- mal, precarious and migrant workers have very
tronics industry are very low. limited possibilities for collective action or power
to negotiate with employers. Notably, women
The very nature of precarious employment consti- workers are overrepresented in these categories.
tutes an obstacle to electronics workers exercising Dialogue between companies and organised
their right to freedom of association, for the same labour is all but absent at national and interna-
reasons that such workers the world over remain tional levels. Additional factors are the structure
un-unionised: temporary workers have no guaran- and complexity of electronics supply chains. The
tee of remaining in the workplace for an extended main barrier to organising and collective bargain-
period (although many in fact do); agency workers ing is the traditional hostility towards unions on
have an indirect employment relationship with the part of the major companies in the electronics
the company they work for; legislation or union sector. Precarious employment practices are intro-
statutes prevent contract workers from joining the duced precisely to prevent workers unionising.
same unions as the permanent workforce; unions The assumption seems to persist that admitting a
find it hard to make contact with such workers trade union will lead to business closures.
who are likely to be on different pay and condi-
tions from the permanent workforce; and of course
the biggest barrier of all: workers’ fear of loss of Standards
current or future employment.
• ILO Freedom of Association and Protection
Freedom of association and collective bargaining of the Right to Organise Convention No 87.
are known as enabling rights, because they give • ILO Right to Organise and Collective Bargain-
workers tools to monitor their own workplace and ing Convention No 98.
to negotiate with management on the improve- • ILO Workers’ Representatives Convention
ment of working conditions. This standard is No 135.
routinely denied in both law and practice. • ILO Declaration on Fundamental Principles
and Rights at Work.

Existing initiatives • Refrain from forming an employee committee
or joint labour-management committee in such
• ILO Better Work Programme, a partnership a manner that it undermines the role of any
with the International Finance Corporation. duly registered union at that factory.
The main aim of Better Work is to improve • Refrain from intimidation, harassment, demo-
labour standards in global supply chains. tion, transfer, promotion, or termination of
workers based on their association with a
Recommended steps union.
• Refrain from discriminating between or
• Comply with all applicable laws, nationally express favouritism to one union or another,
and internationally accepted standards and especially at factories where there is more
industry standards on organising and collec- than one legally registered union.
tive bargaining, whichever offer worker greater • Provide opportunities for unions to dissemi-
protection. nate information regarding freedom of asso-
• Inclusion of such standards and principles in ciation and unions (such as billboard space
company or industry codes of conduct that for posting information or a space near the
cover the entire supply chain. factory entrance or exit where information can
• Write freedom of association and the right be distributed).
to organise and bargain collectively into the • Assist with dues check-off if a union requests
contract between buyer and suppliers. it. If there is more than one union present at a
• Enhance a positive corporate understanding of factory where check-off is taking place, and
social dialogue and the role and the activities if one or more of those unions alleges that
of trade unions. the records management is using to manage
• Make use of social dialogue to improve work- the check-off process do not reflect workers’
ing conditions in the electronics sector. free choice, then there should be a verification
• Facilitate capacity building of trade unions and process to ensure that workers have freely
employers throughout the supply chain for authorised the union and management to
meaningful social dialogue at plant level, as deduct dues from their wages. This process of
well as at national and international level. verification needs to be independent, transpar-
• Support the ILO’s Better Work Programme. ent and credible.
• When sourcing from a country where freedom • If a union forms, enter into good faith negotia-
of association and collective bargaining are tions for a collective bargaining agreement. If
restricted by law (eg, China), take specific a factory has more than one union the legal
steps to encourage decent working condi- obligation of management is only to negoti-
tions. ate with the majority union, but management
• Adopt and post a “Freedom of Association should make every effort to consider the
Policy” for all facilities. This policy should be minority union’s opinion as well.
read aloud to all employees at least once (for • Moves to trim production methods should not
example, by a supervisor during a morning intensify pressure on workers or contribute to
meeting) and it should be posted in the local undermining freedom of association and col-
languages within easy view in several popular lective bargaining agreements.
locations around the factory grounds.
• Do not assist, inhibit, or interfere in any way
with the formation of a union.

Forced labour
Issues • Migrant workers are particularly vulnerable to

forced labour.
Globalisation and the growing links across • Workers working without a contract, who are
countries and firms have raised forced labour and more likely to not know their rights, including
trafficking in persons as significant issues within their right to leave their employment.
global supply chains. Forced labour and human
trafficking are truly global phenomena, affecting These phenomena are not uncommon to the
all countries in the world today. Forced labour is global electronics supply chain. In the extractives
defined as all work or service which is exacted phase, in particular in conflict areas, forced labour
from any person under the menace of a penalty is frequently observed. Prisoners, villagers held
and which the person has not entered into of his hostage by rebel groups, impoverished farmers,
or her own free will. It occurs where work is forced are among the groups of miners that are involved
by the state or by private enterprises or individuals in the mining of metals used in electronic equip-
who have the will and power to impose on workers ment. In the production phase it frequently hap-
severe deprivations, such as physical violence or pens that the fear of dismissal drives employees to
sexual abuse. Forced labour can include practices work overtime beyond what is allowed by national
such as restricting people’s movement; withhold- law. In other cases, workers may feel obliged to
ing wages or identity documents to force them to work above the legal maximum because this is
stay on the job; or entangling them in fraudulent the only way they can earn the minimum wage
debt from which they cannot escape. Forced (for example, where remuneration is based on
labour is a criminal offence and a violation of productivity targets). In these cases, although
fundamental human rights. workers may in theory be able to refuse to work,
their vulnerability may mean that they have no
Some signs pointing at the possibility of forced choice and are therefore obliged to do so in order
labour are: to earn the minimum wage or keep their jobs, or
both. This then becomes a situation of imposing
• Indebted workers. Workers who are or may work under the menace of a penalty and can, thus,
become indebted can become coerced into be considered forced labour (ILO, 2008).
working for a particular employer to repay the
debt.
• Prison labour. Use of prison labour is not
necessarily forced labour. However, prisoner
workers should be hired to companies only on
a voluntary basis, and conditions with regard
to wages, benefits and occupational safety
and health should be comparable to condi-
tions for free workers.
• Exploitative practices such as forced overtime
or the lodging of deposits (financial or per-
sonal documents) for employment.

This case study focuses on allegations of forced labour in factories in China and on the actions taken
in response by one major US electronics company. The factories in question were owned by two dif-
ferent companies and both were assembling separate products for the US multinational. One factory
in particular attracted greater criticism in the media. The descriptions of working conditions ranged
from workers who were forced to work very long hours, live in cramped and insufficient accommo-
dation, forced to pay for accommodation and food, and prevented from leaving the facility. In addi-
tion, there were allegations of child labour in the manufacture of some products, and use of discipli-
nary actions which involved workers being made to stand still for long periods. The allegations first
appeared in a report which was not available on the Internet but which included some pictures of
factory conditions that were later reproduced in the international press. The story was first published
by a UK paper and then, shortly afterwards, by a business journal in China.
Business responses to the issue

The US company in question responded with a statement within 3 days of the above-mentioned
allegations. It stated that the company was taking steps to investigate the situation and that it took
the allegations seriously. The US company took steps to investigate the allegations through exten-
sive factory visits and worker interviews. It published a report on its website within six weeks of the
initial media coverage. In the report, the company states that an audit team sent to the factory was
made up of staff from its human resources, operations and legal departments, and that the evidence
gathered was cross-checked against many sources of information from employees, manage-
ment and staff records. It also points out that, in auditing for forced labour, security records were
checked to look for false identification papers. The report goes on to summarize findings related to
the working and living environment, compensation, overtime, and worker treatment. Although the
company report states that there was no evidence of forced labour or child labour, it made public
the observation that the company’s own weekly limit on hours worked, as stated in the company’s
code of conduct, was being exceeded. The company stated that, as a result of its findings, the sup-
plier was changing its policy to ensure compliance with the weekly overtime limits. In addition, the
company noted that improvements to the sleeping facilities were required but that the supplier was
in the process of acquiring more land to build further facilities. The supplier in question was quoted
as having opened the factory to its customer and provided access for the audits to take place. It
is noteworthy that this supplier is a significant company in the industry and has grown rapidly in
recent years. The supplier was quoted as being satisfied that the US company’s report cleared up
the allegations about working conditions in their factory. It is also quoted as saying that the incident
resulted in the company reflecting on being more open about its business than it had previously
been. It is interesting to note that the Business and Human Rights Resource Centre, which has a
policy of requesting responses from companies cited in human rights abuse allegations, records this
particular case in its summary as having been resolved prior to the company responding. It is the
only case which appears with this indicator.
Initial lessons from the issue

The US company in question was using around 15% of the total workers employed by the factory
in China. The same factory was being used by other major high street electronics brands although
there is little mention of these companies’ reactions to the story. Nevertheless, this percentage share
did not limit the access the company had in producing its audit findings. The story also highlighted
the Electronics Industry Code of Conduct, a sector-specific tool and initiative which brings together
over 40 (as of September 2008) companies working in the electronics industry. This initiative is aimed
at improving working conditions in the industry supply chain. At the time the story was published, the

China-based supplier was a member of the EICC but the US company was not. However, in its report
detailing the audit and its findings, the latter indicated that it would be joining the EICC. Shortly after
the publication of the company report, a related human rights issue was highlighted by the interna-
tional media, involving the journalists who had initially published the story in the British and Chinese
press. A wholly-owned subsidiary of the subcontractor based in China took legal action on grounds
of defamation against the journalists in their own personal capacity. The lawsuit demanded a large
sum of money and once the court accepted the case, the journalists’ assets were frozen. The paper
in question stood by its journalists and criticised the action being brought. There followed requests
from press freedom NGOs to both the supplier and to the US company asking them to act so that the
case could be dropped. The US company said that it was working behind the scenes to help solve
the issue. The case was dropped shortly thereafter. This case demonstrates that by acting quickly
and being thorough in their response, the company quelled concern about the particular working
conditions involved in the manufacture of key products. In addition, when the story took a different
turn and moved into the sensitive political field of press freedom, it seems that the company was
prepared to remain involved. Nevertheless, the case highlights the difficulties in ensuring compliance
with company codes in situations where there is extensive outsourcing. The US company’s decision
to join the EICC demonstrates again the added value of working in cooperation with other compa-
nies facing similar difficulties which may be seen as endemic to the industry (ILO, 2008).
Standards the policy applies to all entities involved in a

company’s product and supply chains.
• ILO Declaration on Fundamental Principles • Have a clear and transparent company policy,
and Rights at Work. setting out the measures taken to prevent
• ILO Forced Labour Convention No 29. forced labour and trafficking. Train auditors,
• ILO Abolition of Forced Labour Convention human resource and compliance officers in
No 105. means to identify forced labour in practice,
• ILO Private Employment Agencies Convention and seek appropriate remedies.
No 181. • Ensure that all workers have written contracts,
in language that they can easily understand,
specifying their rights with regard to payment
Existing initiatives of wages, overtime, retention of identity docu-
ments, and other issues related to preventing
• The ILO Special Action Programme against forced labour.
Forced Labour has released a series of recom- • Ensure wages are paid regularly and methods
mendations to strengthen employers’ activities of payment are prohibited that deprive work-
against forced labour. ers of the genuine possibility of terminating
employment. Wage payments shall not be
delayed or deferred such that wage arrears
Recommended steps accumulate. Wages shall be paid directly to
the worker and should be paid in legal tender,
• Comply with all applicable laws, nationally and or by cheque or money order where permit-
internationally accepted standards on forced ted by law, collective agreement or with the
labour, whichever offer greater protection. consent of the worker. Payment in the form
• Develop company policies to act as guidelines of vouchers, coupons or promissory notes is
on recruiting (migrant) workers. Clarify that prohibited.

• Establish a company policy on overtime that
clearly states it will only be undertaken vol-
untarily. Train human resource personnel and
supervisors on this policy. See to it that work
or service outside normal daily working hours
shall not be imposed by exploiting a worker’s
vulnerability under the menace of a penalty.
• Use only recruitment agencies that are
licensed or certified by a competent authority.
• Ensure that private employment agencies do
not engage in fraudulent practices that place
(migrant) workers at risk of forced labour and
trafficking for labour exploitation.
• Ensure that fees or costs related to recruit-
ment are not borne by workers but by the
contracting company.
• Promote agreements and codes of conduct by
industrial sector, identifying the areas where
there is risk of forced labour, and take appro-
priate remedial measures.
• Contribute to programmes and projects to
assist, through vocational training and other
appropriate measures, the victims of forced
labour and trafficking.
• Build bridges between governments, work-
ers, law enforcement agencies and labour
inspectorates, promoting cooperation in action
against forced labour and trafficking.
• Address the root causes that can lead to per-
sistent use of overtime; for example, consult
with buyers on questions related to production
requirements and deadlines.

Child labour
Issues Standards
In developing countries one often sees children • UN Convention on the Rights of the Child.
working. Some of these children might do their • ILO Minimum Age Convention No 138.
work proudly, others are little more than slaves. • ILO Worst Forms of Child Labour Convention
But what all of them have in common is that they No 182.
are missing out on education and time to play.
Child labour is not just a consequence of the
low wages of parents. In fact, children working Existing initiatives
depresses the wages and employment opportuni
ties of their parents. A child who spends even part • Stop child labour – School is the best place
of the day working, instead of going to school, to work. The Stop Child Labour campaign is a
remains under-educated or uneducated and joint lobby, education and awareness raising
is condemned to badly paid jobs. Companies campaign that seeks to eliminate child labour
increasingly seek well educated employees and through the provision of full time formal educa-
will not invest in countries where the population is tion. The Stop Child Labour campaign has
lacking even the most basic educational qualifica- developed an action plan for companies to
tions. Children’s rights are human rights. Children combat child labour.
have the right to be free from child labour and • The International Finance Corporation (IFC) is
the right to education. But rights also imply that a unit of the World Bank that provides project
others have duties. Companies have obligations advice and funding to companies - typically
to contribute to the realisation of internationally- for major projects. The IFC has developed an
recognised rights (Stop Child Labour, 2008). extensive policy on CSR and also provides
advice on the implementation of fundamental
Child labour is found throughout the global labour standards including child labour. In
electronics supply chain, especially in the mining its 20-page Good Practice Note ‘Address-
and disposal phases. In manufacturing, child ing Child Labor in the Workplace and Supply
labour may not seem to be a widespread problem, Chain’, the IFC spells out several recommen-
although production workers as young as 15 dations for combating the ‘harmful’ types of
years old have been spotted. Children partake child labour.
in the mining of metal used in electronic equip-
ment, for example in cobalt, tin and coltan mines
in the Democratic Republic of Congo. Children Recommended steps
work in the electronic waste disposal, for example
in Ghana and China. The working conditions in • Comply with all applicable laws, nationally and
these sectors are most appalling, even more so for internationally accepted standards on child
children. labour, whichever offer greater protection.
• Make explicit in policies and codes of conduct
that all forms of child labour prohibited by
the two ILO Conventions (138 and 182) will

be proactively prevented and, if nevertheless employ adults (or youngsters older than 14
found, be combated and eliminated. or 15) instead, offering them decent pay and
• Make explicit in contracts with suppliers that conditions. If needed, also adjust other ele-
they must eradicate child labour and realise ments of the company’s sourcing policy with a
labour rights across all sub-contracted opera- view to implementing the company’s ‘no child
tions. labour’ policy and ensuring that fundamental
• Ensure that children hitherto employed at the workers’ rights are complied with.
company’s own plants or service operations, • Whenever possible, try to transfer the job hith-
and/or in out-sourced or sub-contracted erto done by children to their parents or other
operations across the entire supply chain, are close relatives, or offer the parents alternative
transferred to free, full-time regular education. suitable employment.
• Make sure that young people aged 15 to 18, • Create, independently or working with others,
who are allowed to work according to inter- facilities such as crèches and daycare centres
national agreements, are not engaged in the for employees, to help them keep their chil-
worst forms of child labour as specified in ILO dren out of the child labour market.
Convention 182. At least comply with agree- • Invest in a credible management system to
ments - required by the Convention - between combat child labour. This includes: pro-active
governments, labour unions and industry investigations into child labour in the sup-
umbrella associations on hazardous, danger- ply chain, a solid self-monitoring system
ous work. and complaints mechanism, reporting and
• Involve staff and suppliers in combating child transparency on policy and practice, third-
labour: inform them and involve them in the party monitoring and verification, and involving
company’s action plan against child labour. those directly concerned and/or affected.
• Collaborate and team up with other segments
of society, for example local and/or national
governments, to achieve full-time schooling
for former child labourers up to the age at
which they are allowed to work under Conven-
tion 138 or national law.
• Make a special effort where needed to
address the specific challenges faced by chil-
dren from groups suffering discrimination and
other marginalised groups so that they too can
make the transition from work to school.
• Verify the authenticity of birth certificates and
lobby jointly with other parties for the estab-
lishment of reliable birth registration systems
in areas where these are absent.
• Combating child labour must always go hand
in hand with compliance with the ILO’s other
core labour standards and other broadly
agreed workers’ rights.
• Work with trade unions both to tackle child
labour and to make sure that labour rights are
implemented.
• Pay a procurement price to suppliers enabling
them to avoid using child labour and to

Discrimination
Issues the world continue to be subject to discrimination.

In the global electronics sector discrimination is an
ILO Convention 111 defines discrimination in issue too.
respect to work and employment as ‘any distinc-
tion, exclusion or preference made on the basis Women, migrants and young workers are often
of race, colour, sex, religion, political opinion, subject of discriminatory policies and practices.
national extraction or social origin, which has the Gender and migrant labour issues are described in
effect of nullifying or impairing equality of oppor- separate chapters. Other forms of discrimination
tunity or treatment in employment or occupation’. that occur in electronics manufacturing include
The UN Global Compact further defines discrimi- discrimination of the basis of age and marital
nation in employment and occupation as “treating status. Young workers are preferred above mar-
people differently or less favourably because of ried people. The bulk of the labour force is made
characteristics that are not related to their merit up of young, single women. A serious form of
or the inherent requirements of the job. These discrimination concerns the unequal treatment of
characteristics commonly include: in the national trade union members. When applying for a job,
law, race, colour, sex, religion, political opinion, workers are interrogated about their trade union
national extraction, social origin, age, disability, sympathies and actively discouraged to join a
HIV/AIDS status, trade union membership, and trade union. Membership is too often a reason for
sexual orientation.’ It is agreed that all workers harassment or even dismissal. In the mining and
should enjoy equal rights. Yet workers throughout disposal phases, the effects of societal discrimina-
A very specific form of discrimination concerns caste-based discrimination. Caste-based discrimina-

tion is a form of discrimination, prohibited by international human rights law, that globally subjects
an estimated 260 million people to discrimination on the grounds of work and descent. This form
of discrimination is an entrenched human rights violation, which is mainly found in South Asian
countries but also occurs in communities in Japan, Yemen, some African countries and Diaspora
communities. Victims suffer a hidden apartheid of segregation, modern-day slavery and other forms
of discrimination as a result of having been born into a marginalized group or caste. Caste discrimi-
nation constitutes one of the most serious and widespread global human rights challenges today,
affecting large proportions of societies in many regions of the world, and continues to function as
a deeply rooted system of grave human rights violations. Caste-based discrimination includes dis-
crimination in employment where people affected often serve in low level positions and suffer from
both open and ‘hidden’ discrimination, drastically affecting their ability to amass and provide for their
families. The number of foreign companies operating in and sourcing from India and other South
Asian counties is increasing, and the majority of these companies will have limited knowledge of the
scope and dynamics of caste-based discrimination. An intrinsic element of South-Asian and other
societies, caste-based discrimination and exclusion is often invisible to the outsider. As a conse-
quence, companies may unknowingly contribute to and benefit from caste-based discrimination and
exploitation (IDSN 2009). That goes for electronics companies too.

tion and exclusion are also visible. It is generally Recommended steps
the people with less chances on the labour market
that end up in the lower strata of the informal sec- • Comply with all applicable laws, nationally
tor, doing unskilled, low-paid and hazardous work. and internationally accepted standards on dis-
crimination, whichever offer greater protection.
Discrimination of particular groups of workers • Take full responsibility for the workforce, both
may have its effect in a whole range of labour con- direct and sub-contracted, including the sup-
ditions. A number of aspects are to be taken into ply chain.
account when analysing a situation of discrimina- • Get informed about the risks and occur-
tion, including hiring procedures, job allocation, rence of discriminatory policies and practices
(in-)equal opportunities, dismissal, remuneration throughout supply chains.
and benefits, training and career development, • Fight discriminatory policies and practices that
harassment and abusive treatment, segregation put women, migrant workers, young people
and exclusion in the workplace, as well as the (in-) and other vulnerable components of the
accessibility of grievance procedures. labour force such as victims of caste-based
discrimination in a disadvantaged position.
• Promote equal opportunities in the workplace
Standards throughout the supply chain.
• Get acquainted and work with specific anti-
• ILO Discrimination in respect of employment discrimination principles and tools, such as
and occupation Convention No 111. the aforementioned Dalit Discrimination Check
• ILO Equal remuneration for men and women and the Ambedkar Principles.
workers for work of equal value Convention • Consider forms of affirmative action to answer
No 100. to the specific position of disadvantaged
workers.
• Contribute to improve unionisation rates
Existing initiatives among women, migrant workers, young work-
ers and other disadvantaged groups.
• The Dalit Discrimination Check is a tool devel-
oped specifically to help companies prevent
discrimination and exploitation of Dalits in
their Indian operations and suppliers. The tool
is designed as a comprehensive checklist
consisting of self-guided questions and indi-
cators that highlight possible violations. The
tool provides simple descriptions of what the
components of Dalit discrimination looks like
in the business context, and allows managers
to check their company’s policies, procedures
and performance (Danish Institute for Human
Rights 2008).
• The Ambedkar Principles form a set of
employment and additional principles on
economic and social exclusion formulated to
assist all foreign investors in South Asia to
address caste-discrimination (IDSN, 2006).

Security of employment –
precarious work
Issues • disguised employment training contracts;

• on call/daily hire;
The majority of activities in the global electronics • illegal or involuntary part-time work;
sector are part of the formal economy. That is to • home working (IMF, 2007).
say that these activities are taxed, government
monitored and socially and legally regulated by It is estimated that currently in many instances
societal institutions. However, informal workers 50% of the labour force in a given electronics
make an important contribution to the electron- factory consists of contract workers, and at times
ics supply chain, especially in the mining and even up to 90%. Within the broader metal sector
disposal phases. These workers do not enjoy any the electrical & electronic industries stand out as
form of social or legal protection to shield them the industries which have been more affected than
from the harsh implications of illness, disability or others by the informalisation of employment (IMF,
unemployment. Long working hours, meagre pay, 2007).
exploitation, discrimination, etc. are no exception
for mine workers and informal waste workers. While labour flexibilisation may have a positive ring
to it, especially for employers, the reality is that for
Moreover, employment in the manufacturing phase workers it oftentimes means increasing insecurity
is increasingly characterised by informalisation. of employment, income and livelihood. Wages of
Other terms for the same and related processes contract workers are generally significantly lower.
are casualisation or contractualisation of employ- Contract workers can lay no claim to employ-
ment. The common feature: it makes employment ment rights which means: no paid sick leave; no
increasingly precarious. The employment practices holidays; no annual leave; none or smaller allow-
associated with precarious work include: ances for transport or energy costs; none or lesser
annual bonuses or incentives for diligence since
• direct hire on temporary labour contracts for these are usually granted only to regular workers,
fixed or limited term or fixed task; etc. Workers employed through an employment
• hiring in labour via employment agencies or agency are treated differently for the same work.
labour brokers; Apart from being paid lower wages, these workers
• contracting out functions to other companies also have to pay for safety clothing and medi-
(off-site or on-site); cal tests, while for regular workers the employer
• personal labour contracts as bogus ‘self- would bear such costs. A company can terminate
employed’ workers; the services of a contractual or temporary worker
• the replacing of regular contracts by renew- at any time. Often access to social services is
able, short term contracts. A company may for limited as well.
example employ a minimum of skilled workers
and hire other workers, often less skilled and The current global economic downturn, exacer-
cheaper, on a contractual basis, dealing with bates the precarious situation of workers. Again,
fluctuations by adding workers on a short term women are being disproportionately affected as
basis; the first jobs to be cut have been those primarily
• abusive probationary periods; held by women.

Standards Recommended targets
• ILO Tripartite Declaration of Principles Con- • Comply with all applicable laws, nationally
cerning Multinational Enterprises and Social and internationally accepted standards on
Policy, articles 24-28. employment security, whichever offer greater
protection.
• Ensure suppliers have legal contracts and rec-
Existing initiatives ognised employment relationships with their
employees that are in accordance with their
• International Metalworkers Federation (IMF) national law and good practice.
“Precarious Work Affects Us All” is a global • Treat casual or temporary workers equally to
union campaign to stop the rise in precarious regular workers.
employment and regain power and justice for • Provide regular employment to workers in the
working people. supply chain.
• European Metalworkers federation (EMF) • Commit to converting temporary contracts
“For more secure employment - against pre- into regular contracts.
carious work”. • Include employment agencies in codes of con-
The objectives of both campaigns are: duct and make employment agencies comply
• with the code of conduct.
ecarious work does exist, wages and conditions • Restrict the use of temporary/contract
must be equal to those of regular workers and full employment to cases of genuine need. Poten-
coverage of social security should be guaranteed; tial or actual fluctuations in production do not
• workers should be directly hired and indi- automatically sanction the use of temporary/
rect employment discouraged; contract work. Setting a proportional maxi-
• basic job security has to be guaranteed, mum of contract workers may be necessary.
as well as full protection in the field of • Protect historically established social benefits
health and safety. of workers in their supply chains such as
annual leave, severance payment, maternity
benefits and profit sharing.
Women make up the bulk of temporary and contract workers in export oriented global supply chains.
The increasing informalisation of labour leaves a growing number of women workers outsides wel-
fare and social protection regimes. There are indications that women remain in precarious employ-
ment longer than men. The erosion of working conditions for precarious workers is having a severe
impact on families. Without permanent employment and lower wages, planning to have children
becomes more difficult and taking time off in case of illness or for vacations is less easy. As women
are often the main breadwinners the importance of women’s income to families should not be under-
estimated. Unpredictable work hours, conflict over the division of household tasks, relationships
under pressure, domestic violence, increased stress, negative health implications and prematurely
forced independence for children are reported consequences of women’s precarious employment
(Farley, 2009).

Occupational health
and safety
Issues dangerous group of chemicals in the electronics

industry. Acids include hydrofluoric acid, which
Occupational health and safety issues are present represents one of the most serious acute environ-
throughout the supply chain. Many health and mental and health risks (CBI, 2008). Workers can
safety hazards occur during the extraction of be exposed to electromagnetic fields as well as to
primary materials used in electronics equipment. ionising and non-ionising radiation (HESA newslet-
In most cases, mining is strenuous, backbreaking ter, 2008).
and dangerous work. Basic safety measures are
often lacking and a wide range of health haz- There are many health problems that can result
ards are linked to toxic materials, dust, confined from working in this industry: breathing in chemi-
spaces and working in hot, cold or wet conditions. cal fumes and vapours or metallic dust may cause
Equipment may be minimal or broken. Ergonomic respiratory problems. Contact with cleaning
problems may be considerable. Medical or health agents may cause burns, eye irritation and skin
facilities are very often inadequate or simply diseases such as eczema. Accidental release of
absent. Hazardous situations are even more likely dopants may damage the nervous system and red
to occur in informal mining, or illegal mining in blood cells, cause cancer or even death. Chronic
conflict areas, where any form of regulation will be effects of acid contamination may be lung cancer,
absent. bone damage and erosion of teeth. Overexposure
to solvent vapours may cause headaches, fatigue,
Production workers in the electronics industry and drowsiness, lack of co-ordination or uncon-
usually work in seemingly clean and relatively sciousness. Long-term exposure to solvents may
noise-free environments. Microchips, for example, cause liver and kidney failure (CBI, 2008).
are manufactured in temperature- and moisture-
controlled aseptic ‘clean rooms’ in which the air Women workers in the electronics industry are
is filtered and workers wear special garments. faced with specific health concerns. In the 1980s
Nevertheless this work still poses many health and 1990s, rumours and reports abounded about
threats. Several processes in electronics manu- the damage to women’s reproductive health
facturing, eg, soldering, doping, photolithography, caused by chemicals in the semiconductor indus-
electroplating, vapour deposition, etching and try. Prolonged and irregular menstruation cycles,
crystal polishing, involve working with hazardous reduced fertility and increased risk of spontaneous
substances. Reportedly, between 500 and 1,000 abortions were among the reported effects. Glycol
different chemical are used in the semiconductor ethers, chemicals then widely used as solvents
industry, including carcinogens such as solvents, in the semiconductor industry, were singled out.
arsenic-based substances, and heavy metals While most semiconductor manufactures have
like cadmium and lead (HESA newsletter, 2008). since then gradually reduced their reliance on
Soldering liquids contain resins, metallic salts or glycol ethers, the industry is still using other repro-
fluoric borates. Cleaning agents can consist of toxins (HESA newsletter, 2008).
metallic dust or halogen or non-halogen organic
solvents. Dopants such as diborane, arsine and In a groundbreaking article published in 2007
phosphine are considered the most potentially the serious health concerns of semiconduc-

tor workers have been documented, detailing with considerable health hazards, especially in
cancer and reproductive health hazards (Ladou the case of the informal and unregulated waste
and Bailar, 2007). Several epidemiological studies disposal that often takes place in developing
done in the US in the 1980s all found high rates countries. Many of the electronic products contain
of miscarriages among semiconductor workers. countless hazardous chemicals and materials and
IBM maintained a Corporate Mortality File which therefore the recycling and disposal of e-waste
documented that, over a 30-year period, IBM poses a threat to the environment and to human
workers with exposure to chemicals died younger health. In known e-waste dumping grounds in
and more frequently from toxic-related cancers Nigeria, Ghana, China and India electronic waste
than the national average (Clapp, 2006). The Scot- is taken apart at open-burning sites. Toxic metals
tish Health and Safety Agency conducted a health found in soil and sediment samples in Ghana
study of workers at National Semiconductor in include lead in quantities as much as 100 times
Scotland and found disproportionately high rates above levels found in uncontaminated samples.
of cancer among them. In 2005, after years of In the Ghanaian samples other chemicals such as
resistance, the American Semiconductor Industry phthalates, which interfere with reproduction, and
Association has commissioned Vanderbilt Univer- high levels of chlorinated dioxins, known to cause
sity to conduct a chip industry worker health study cancer, were found as well. The exposure of work-
to assess the cancer risk to semiconductor workers and bystanders to hazardous chemicals may
ers. The results are expected in 2009 (Business be substantial. In areas in other countries where
Wire, 2005). e-waste recycling takes place, increased exposure
to toxic chemicals has been reported for workers
Ergonomic problems arise as a result of the strict and/or local residents, including for chlorinated
working regimes that are oftentimes imposed on dioxins and furans (PCDD/Fs), certain PBDEs, and
workers. Where ‘standing operations’ policies the toxic metal lead (Greenpeace, 2008).
apply, for example, workers are not allowed to sit
down. In some cases, companies even dictate the
pace at which workers have to walk, under penalty Standards
of a disciplinary measure of some sort.
• ILO Occupational Safety and Health Conven-
Research demonstrates that part-time workers tion No 155.
with no job security are more likely to develop • European Commission Directive 2002/95/
physical and mental health problems than regular EC on the Restriction of the Use of Certain
workers. Migrant workers often have limited or no Hazardous Substances in Electrical and Elec-
access to health insurance or health services. tronic Equipment (RoHS). The major provisions
The handling of electronic waste is associated include that Member States shall ensure that,
In 2004, an outbreak of cadmium poisoning cases occurred in four subsidiary factories of Gold Peak
Batteries in mainland China as well as in Hong Kong. One case concerned the cadmium poisoning
of workers of the Gold Peak Batteries plant in Hong Kong. Another case concerned the cadmium
poisoning of workers at JetPower, a Gold Peak subsidiary based in Shenzhen, China. For years
now, workers have been campaigning for fair compensation. Cadmium is a toxic heavy metal and
an important constituent of nickel-cadmium batteries as produced by GP Batteries. Cadmium is a
known human carcinogen that causes damage to lungs, kidneys and bone tissue in case of long-
term exposure. Gold Peak Batteries has long-established supply agreements with some of the
world’s biggest consumer brands. Its (rechargeable) batteries and components are found in cordless
and wireless phones, toys, power tools, and are sold across the world (Globalization Monitor, 2009).

from 1 July 2006, new electrical and electronic • Occupational Health and Safety Assessment
equipment put on the market does not contain Series (OHSAS 18001) - an international
any of the six banned substances: lead, mer- occupational health and safety management
cury, cadmium, hexavalent chromium, poly- system specification.
brominated biphenyls (PBB) or polybrominated
diphenyl ethers (PBDE), in quantities exceed-
ing maximum concentration values. Existing initiatives
• European Commission Directive 2002/96/EC
on Waste Electrical and Electronic Equipment • Silicon Valley Toxic Coalition and the Interna-
(WEEE). tional Campaign on Responsible Technology,
• European Commission Directive 2006/66/EC 1970s pioneers in addressing occupational
on batteries and accumulators and waste bat- health impacts and community health issues in
teries and accumulators Silicon Valley, California, US.
• Directive 2006/121/EC of the European Parlia- • PHASE Two, People for Health and Safety in
ment and of the Council concerning Registra- Electronics, a campaign launched in 1997 by
tion, Evaluation, Authorization and Restriction Jim McCourt.
of Chemical substances (REACH), entered • The Asian Network for the Rights of Occupa-
into force on June 1, 2007. The aim of REACH tional Accident Victims (ANROAV) has a focus
is to further improve the protection of human on electronics workers’ health and safety.
health and the environment through the better • The New England Lead-Free Electronics
and earlier identification of certain chemical Consortium - a collaboration of industry,
substances. It is legislation from the European government, and academia, launched by the
Union, and applies to all suppliers (inside Toxics Use Reduction Institute (TURI) and the
and outside Europe) that want to sell, import University of Massachusetts Lowell to help the
or manufacture chemicals and/or products electronics industry find alternatives to lead.
containing certain chemicals in the European • The Agreement on Minimum Requirements for
Union. Part of REACH is a list of Substances Plant Level Joint H&S Committees, concluded
of Very High Concern (SVHC). Critical note: between ArcelorMittal and the International
the effect of REACH is not yet known and the Metalworkers Federation, June 2008.
process of prioritising and reviewing substanc- • The European Work Hazards Network has
es may take decades. included workshops on electronics health and
safety at its conferences.
The recycling of printed circuit boards in Guiyu, China, a village intensely involved in e-waste
processing, may present a significant environmental and human health risk. To evaluate the extent of
heavy metals (Cd, Co, Cr, Cu, Ni, Pb, Zn) contamination from printed circuit board recycling, surface
dust samples were collected from recycling workshops, adjacent roads, a schoolyard and an out-
door food market. ICP-OES analyses revealed elevated mean concentrations in workshop dust (Pb
110000, Cu 8360, Zn 4420, and Ni 1500 mg/kg) and in dust of adjacent roads (Pb 22600, Cu 6170, Zn
2370, and Ni 304 mg/kg). Lead and Cu in road dust were 330 and 106, and 371 and 155 times higher,
respectively, than non-e-waste sites located 8 and 30 km away. Levels at the schoolyard and food
market showed that public places were adversely impacted. Risk assessment predicts that Pb and
Cu originating from circuit board recycling pose potentially serious health risks to workers and local
residents of Guiyu, especially children, and warrants an urgent investigation into heavy metal related
health impacts. The potential environmental and human health consequences caused by uncon-
trolled e-waste recycling in Guiyu serve as a case study for other countries involved in similar crude
recycling activities (Leung, 2008).

Recommended steps • Provide first-aid facilities.
• Ensure medical care is provided to victims of
• Comply with all applicable laws, internation- occupational accidents.
ally and nationally accepted standards and • Ensure fair compensation of victims of occu-
industry standards on occupational health pational accidents.
and safety, whichever offer workers greater • Commit to the phasing-out of hazardous
protection. chemicals. Commit to toxics use reduction
• Set minimum standards in every site as well as strategies.
in the facilities of suppliers. • Commit to the design of products with greater
• Recognise that trade unions and worker safety life spans, that are safer and easier to repair,
representatives have a vital role to play in upgrade and recycle.
improving health and safety. • Practice transparency about occupational
• Allocate trade unions and workers safety rep- health issues.
resentatives inspection powers and the right • Collaborate with large-scale surveys - includ-
to be consulted on occupational health and ing substantial samples of exposed workers
safety matters. - regarding the exposure to toxic products and
• Commit to form joint management/union other occupational health issues in electronics
health and safety committees with at least manufacturing.
50% participation of workers.
• Allow such committees the authority to control
investments in occupational health and safety
measures or to stop production in specified
situations, as defined by national legislation
• Commit to provide workers with intelligible
information, and training and education pro-
grammes, specifically targeting new employ-
ees and women workers.
• Allow workers to raise health and safety mat-
ters anonymously, without fear of reprisal
• Ensure maintenance controls and cooperate
with labour and safety inspections.
• Minimise fumes, vapours, dust production,
noise, etc.
• Ensure high quality protective clothing and
gear including gloves, earplugs etc. are made
available free of cost for all workers, including
contract workers.
• Ensure warning notes or information on safe
handling methods are posted and visible for
all workers.
• Ensure manufacturing facilities are equipped
with sufficient lightning, systems for ventilation
and extraction.
• Establish systems to deal with uncontrolled
emissions of toxic substances, ie, emergency
procedures, warning systems, evacuation
plans, including information for the community
where production facilities are located.

Working hours
Issues workers in a poverty trap. Under these conditions,

workers will want to work every extra hour they
Long working hours and forced overtime work are can.
widespread phenomena in the global electronics
sector. This damages people’s health and under- Refusal of overtime is often not an option anyway.
mines family life (ETI). In the computer manufac- Workers refusing overtime run the risk of being
turing industry, for example, excessive compulsory punished or even fired.
overtime is found, coupled with non-payment
of this overtime. In the Philippines, Thailand and As argued in the chapter on gender, overtime is
China working hours can run to 12-hour working an important gender issue. Women workers in
days, and weeks without a day off; amounting to particular have difficulties in making arrangements
working weeks of 7x12 hours= 84 hours. This is for child and family care, especially at short notice,
way over the maximum of what is internationally and have to juggle work and domestic responsi-
accepted, ie, 48+12=60 hours per week and at bilities.
least one day off every 7 days (SOMO, 2009).
Electronics companies do acknowledge that long
There is a pertinent relation between overtime and working hours, forced overtime and non-payment
low wages. The minimum wages paid for normal of overtime are unacceptable, but so far are failing
working hours become in fact a ceiling, keeping to effectively address problems.
The EICC has identified a number of root causes that impact work hours through input of its
members, benchmarking research, and detailed analysis completed by the EICC Working Hour
Task Force. The following areas were identified for focus given the fact that EICC members have
greater sphere of influence or ability to control them.
For brands:
• ad-hoc orders which are difficult to plan for and may require short term ramp ups;
• ongoing fluctuation in customer demand, as well as non-linear orders, which create
supplier difficulties in responding to volume changes;
• lack of customer awareness of how their decisions impact the downstream supply chain;
• potential lack of alignment between business decisions and CSR;
• strong pressure from brands to suppliers for cost reduction across the supply chain;
• cost reduction strategies may not be aligned to CSR.
For suppliers
• inconsistent messaging and inability to push back on customers for fear of damaging
relationship;
• lack of effective tools to manage and control working hours across the supply chain;
• Lack of clear business case for implementing change (EICC Working Hours Task Force, 2009).

The problem is that codes of conduct do not
provide for a clear cap on working hours and
overtime, or measures against forced overtime.
As codes of conduct lay down the standards that
buying companies expect from their suppliers, this
is a clear message about what is expected from
manufacturers.
Standards
• ILO Observance of maximum number of work-

ing hours Convention No 1.
Recommended steps
• Comply with all applicable laws, international

accepted standards and industry standards
on working hours, whichever offer workers
greater protection.
• Ensure that a regular workweek shall not
exceed 48 hours.
• Ensure that workers are provided with at least
one day off after six consecutive days of work,
as well as public and annual holidays. Ensure
that overtime work shall under no circumstances
exceed 12 hours per employee per week.
• Ensure all overtime work is voluntary and shall
not be demanded from workers on a regular
basis.
• Ensure workers throughout their supply chain
are provided with written and understandable
information about their employment condi-
tions, including working hours, before entering
employment.
• Ensure that the wages for a normal working
week amount to a living wage.
• Reimburse all overtime work at least at such
a premium rate as required by law. In those
countries where a premium rate for overtime is
not legally required, companies are to ensure
that workers are compensated for overtime
at a premium rate of at least 150% of their
regularly hourly compensation rate.
• Include the above clauses into their codes of
conduct as well as in company level collective
bargaining and industry framework agree-
ments.

Wage
Issues workers in global supply chains, even in the first

tier of supply chains. In many countries the situa-
In many countries, minimum wages set by the tion is worsening as the cost of staple foods and
government fall far short of what many estimate fuel escalates (ETI, 2008). The current economic
to be a living wage. Minimum wages are generally downturn is not making things any better.
low, often too low to sustain a decent livelihood.
Signs of poverty wages include taking on extra An additional worrying aspect is that women work-
work, eg, homework or another factory job (ETI, ers generally earn less than their male colleagues
2008), or even children being forced to work. The and equal pay for equal work is not yet a reality
relation between wages and overtime is strong. (ILO, 2008).
This is certainly the case for many workers in elec-
tronics supply chains. A living wage means that One reason for low wages in export-oriented man-
wages and benefits paid for a standard working ufacturing sectors is the very low level of unioni-
week must always be sufficient to meet the basic sation and consequent absence of any form of
needs of the workers and their families, such as collective bargaining, while workers and employ-
housing, clothing, food, medical expenses, educa- ers bargaining freely is the most sustainable and
tion, and additionally provide some discretionary legitimate way of calculating and maintaining a liv-
income (savings). A living wage must reflect local ing wage (ETI, 2008). In this absence, the statutory
conditions and may therefore vary from country minimum wage therefore becomes the sole norm
to country or even region to region (Clean Clothes for wage setting (Asia Floor Wage Campaign,
Campaign, 2008). In other words, a ‘needs based 2005). As with other labour rights, workers are
minimum wage’ (Asia Floor Wage Coalition, 2005). often afraid to fight for better wages, for fear they
might be fired or the factory might pack up and
In addition to being generally too low, legal mini- move to a country or region where wage levels are
mum wages are often taken as standard or even lower and workers are even less demanding.
a maximum, instead of being taken as a floor.
So, even when buying companies are encourag- Often, workers are uncertain about their actual
ing their suppliers to pay workers their statutory wages, as written contacts and regular pay slips
entitlements (the national minimum wage, plus any may not be provided, or may be incomprehensibly
additional benefits such as sick pay, overtime pay framed, especially for illiterate workers.
and pension contributions), workers still have huge In computer manufacturing in China, excessive
problems to eke out a decent living for themselves and unjust wage reductions are applied when
and their families. There is still no systematic workers make mistakes or are too late for work
payment of a living wage to the vast majority of (SOMO, 2009).
Violations of wage and benefit also emerged as a key area of non-conformances and included
instances of paying workers less than the required wages, overtime premiums, and imposing disci-
plinary wage deductions. This emerged from the results of 36 of the second-round pilot shared audits
completed by the EICC in 2007 and 2008 (EICC, 2008).

Buying company pricing and retailing policies are Recommended steps
very important to any discussion on living wages.
Brand name companies speak with suppliers • Comply, as a floor, with all applicable laws,
about comparative wage rates across their supply regulations and industry minimum standards
chain as an element of competition. Yet there is regarding wages.
a sharp discrepancy between the pricing policies • Accept as a principle that workers shall have
of brands and what they expect local factories to the right to a living wage.
pay their workers (JO-IN, 2005). This pressure on • Include these standards and principles into
prices is huge in the garment sector and the same codes of conduct, buying practices, as well
goes for the electronics sector. The argument as into collective bargaining and framework
that is used by the industry to counter demands agreements.
for higher wages is that the margins available • Find out what wage benchmarks exists in the
to industry do not allow increase in wages. This sourcing countries as well what workers in the
argument does not hold true when manufacturing supply chain are being paid, while taking into
activity and labour costs are located within the account non-monetary benefits (food, trans-
totality of the supply chain. Arguably, if custom- port, housing, medical care), as well as social
ers would pay a fair price, the ability of the supply security and tax payments.
chain to absorb wage increases at the manu- • Ensure that throughout the supply chain
facturing end would increase very substantially wages and benefits paid for a standard work-
(Asia Floor wage Coalition, 2005). Retailer policies ing week shall, as a floor, be sufficient to meet
are therefore directly relevant for discussions on basic needs of workers and their families and
wages. provide some discretionary income.
• Jointly agree upon the definition and a way of
calculating and maintaining a living wage with
Standards concerned stakeholders including workers’
representative organisations.
• UN Declaration of Human Rights, article 23, • Make sure the living wage principle applies
paragraph 3. to all workers of the workforce in the supply
• ILO Tripartite Declaration of Principles, article chain.
34. • Take a step-by-step approach to raising
• ILO Minimum Wage Fixing Convention No 131. wages, like the JO-IN ‘wage ladder’; allowing
wage levels to be plotted over time against
various objective criteria.
Existing initiatives • Be clear about how the wage increases will
be paid for (increasing prices for consum-
• ETI living wage project in Bangladesh. ers, absorbing costs by increasing internal
• The JO-IN ‘wage ladder’ approach. The ‘wage efficiency, increasing overheads or improving
ladder’ tool offers a pragmatic benchmarking productivity).
system for charting factory progress in improv- • Ensure the level of wages and benefits are
ing wages (JO-IN, 2008). reviewed on a regular basis.
• The Asian Floor Wage Coalition. The pro- • Refrain from making deduction from wages for
posal for an Asian floor wage was developed disciplinary purposes.
by union leaders, international NGOs and • Ensure workers throughout their supply chain
activists in India, later in Asian countries and are provided with written and understandable
internationally. information about their employment condi-
tions, including wages and benefits, before
entering employment.

• Ensure that workers are provided with the
particulars of their wages for the whole pay
period each time they are paid; that remunera-
tion is rendered in a manner convenient to
workers, either in cash or check form; and that
wages and other benefits are paid on a regular
and timely basis.
• Engage in a coordinated effort with govern-
ments to support the drive of suppliers for
productivity aiming for stable, long-term
buyer-supplier contracts.
• Advocate and/or support advocacy towards
national governments for increases in the
minimum wage consistent with ILO Conven-
tion 131.

Home work
Issues Home work appears to be on the rise around the

world, because of shrinking formal employment
Home working is a form of employment under- opportunities and competitive pressures in the
taken by people either in their homes or in their global economy leading to more outsourcing and
yards, garages or fields nearby for a cash income. subcontracting.
Home working is found in many different sec-
tors of industry, all over the world. However, it In the case of electronics, various forms of home
is generally hidden and home workers are rarely working occur. The mining phase, the extraction
acknowledged as part of the workforce or counted of metals used in electronic products, is to a large
in official statistics. Trade unions are often not able extent part of the informal economy. Labour laws
to organise and protect home workers. Women do not apply, labour inspection is a fiction. Parts
constitute over 90% of all home-based work- of the extractives process can be described as
ers worldwide. Pay and conditions are often well home work, for example when miners have set up
below minimum or average levels (HomeWork their homes at mining sites as is often the case
Worldwide, 2009). in African countries. In the manufacturing phase,
a number of products and processes are done
Home workers make up a flexible workforce; often by women at home, including the assembly and
they are piece-rate workers, who usually have no soldering of printed circuit boards; assembly of
guarantees of a regular flow of work, low rates switches and cables or other assembly work with
of pay, no social security and little health and small components. Often the work is manual, but
safety protection. When they are sick or too old sometimes small tools are used and in the case
to work they have no sick pay or pension. Any of soldering, a soldering iron. This type of home
hazards from the work affect all members of the working is not limited to developing counties, but
home worker’s family including young children and has been found in the UK as well, for example.
elderly people. Home working increases the risk The recycling of e-waste, including the dismantling
of child labour, as children may be involved when of computer parts, is also typically done by home
work is brought into the home. Home-based work workers, eg, in China and Indonesia.
is almost always informal, in the sense that it takes
place outside formal systems of labour or social
regulation. Standards
Home work is usually found in labour-intensive • ILO Home work Convention No 177.
parts of the production process, with relatively • Accompanying Recommendation No 186.
simple machinery being used. The work done
by home workers is often similar to that done by
factory workers, except that the workplace is the Existing initiatives
home. Sometimes home workers get work directly
from a factory and know their employer. More Home Workers Worldwide (HWW) is a UK-based
commonly, they receive work from a subcontractor organisation set up to support the movement of
or intermediary and may not even know details of home-based workers around the world. Since the
their main employer. 1970s, there has been a growing movement to

organise for visibility and recognition, to improve
working and living conditions. HWW exists to sup-
port this movement and to help it grow.
Recommended steps
• Recognise that home workers, as well as

other categories of informal workers such as
artisanal miners, are part of the supply chain
workforce.
• Map cases of home working in corporate
supply chains and identify the home workers’
main employers.
• Ensure that home workers working in supply
chains are entitled to the same minimum rights
as other workers.
• Include ILO Convention 177 in company
codes of conduct.
• Ensure home workers are brought within the
scope of workers organisation and collective
bargaining.
• Facilitate the inclusion of ILO Convention 177
into framework agreements.
• Publicly promote full ratification of ILO Con-
vention 177, adaptation of national policies
on home working, and the setting of minimum
wages for home workers.

Migrant labour
Issues Migrant workers form a vulnerable segment of

the workforce in global value chains, but have nev-
Poverty is the major reason behind the move- ertheless received little specific attention. Migrant
ment of work-seekers from one country or region labour also can be found in all phases of the
to another. Besides migration from poor to rich electronics sector, including the mining of metals,
countries, poverty also fuels movements from one the manufacturing of equipment, and the disposal
developing country to others, or within countries. of electronic waste.
Over the past decades there has been an increase
in labour migration. This increase is related to Migrant workers provide a hardworking labour
the rise of economic inequality and increasing force in labour-intensive industries, but they are
economic insecurity, as well as the consequences also isolated and often heavily indebted. Reports
of political and armed conflict. The increasing of abuse, forced labour and human trafficking are
informalisation of and competition within the increasingly common. Companies seem to prefer
global economy has led to more flexible labour migrant workers to local workers, as they are often
markets and the demand for cheap labour, trigger- less articulate in claiming their rights. Lack of
ing migration. knowledge of the local language and local employ-
ment conditions prevent migrant workers from
Currently, labour migrants represent roughly 200 enforcing their rights and from seeking assistance.
million people, or about three percent of the world Migrants are likely to fall prey to unscrupulous
population, an increasingly vital part of the global recruiters, transportation companies and employ-
workforce. 90 million people migrate for work ers. Sometimes, migrant labourers are issued the
globally every year and an increasing percentage wrong visa – business visa instead of work visa,
of those workers are moving between emerging for example, causing them trouble in looking for
economies (BSR, 2008). Today, around half of the work. Sometimes, workers are required to lodge
world’s migrants are women (OSCE, 2009). The identity papers (such as passports, travel or
feminisation of migration is a global trend; more residency permits) with their employer which puts
women are migrating and the demand for work- them in an excessively dependent relation to their
ers in female-dominated sectors in countries of employer. Due to these handicaps they are disad-
destination is ever-increasing. Male migrants often vantaged on the labour market. Where national or
leave behind wives and families who have to fend local workers may decline to work for low wages
for themselves, depending on unstable, insecurely or in lesser working conditions, migrants have less
transmitted funds. choice (La Strada, 2008). A widespread tendency
The Mexican labour rights organisation Cereal supports workers in the electronics sector. The Mexi-
can electronics manufacturing industry is employing a considerable number of migrant workers.
Labour rights organisation Cereal estimates that nearly 50% of the workers of the Mexican electron-
ic industry are internal migrants, often on their way to the United States. Workers are known to come
from different southern Mexican provinces.

is to regard migrants as a complementary labour are guaranteed under international treaties and
force, and to assign them to the jobs with the national laws (UNHCHR, 2009).
least attraction for nationals. As a result, migrant There are, in certain cases, bilateral agreements
workers have become akin to other sourced between states covering migrant labour. Overall,
commodities, with a premium on price over rights current regulation in emerging economies largely
and protections (BSR, 2008). Migrant workers are fails to adequately protect (migrant) contract work-
vulnerable to the seasonality of the demand for ers. In some countries, laws mandate differential
work. When orders are low, migrant workers who treatment of migrant workers. In others, no legal
are often on temporary contract are the first to regulations are specific to migrant workers and are
lose their jobs. In short, migrant workers are the rarely enforced in favour of their protection. Export
quintessential precarious workers. Processing Zones (EPZs) and Free Trade Zones
(FTZs) often have independent legislation regard-
Migrants may have difficulties adapting to the ing worker rights and protections, which usually
new societal environment and stand out for that. fall short of protecting migrant workers. Compa-
As such they are an easy target for discrimina- nies’ Codes of Conduct generally do not include
tion. Illegal or irregular migrants suffer from clauses on agent fees, legal status, minimum
fear and stress – fearful to be found out by the length of service etc, all of which are important
immigration police, or to fall ill – as they often to migrant workers. Apple’s supplier code is an
do not have medical insurance. Living condi- outstanding exception.
tions of migrant workers are often unsatisfactory.
Low incomes, high rents, housing shortages, Typically, migrant workers incur debts to cover
the size of migrants’ families and local prejudice travel expenses, visa costs, recruitment fees,
against foreign elements in the community are the obligatory health checks. In addition of that,
main factors which combine to cause a serious migrant workers are faced with non-payment of
accommodation problem. Often, migrants even wage supplements, bonuses and wage refunds, as
pay more for housing provided by the employer. well as with unlawful wage deductions.
Most migrants are unaware of the human rights
protection and fundamental freedoms which they
In the Czech Republic, Vietnamese (electronics) workers are easily laid off – once laid off, it is hard
to find a new job, as migrants usually have visas for business license holders and are not entitled to
work elsewhere. Formally, migrant workers lose their work visa and residence permit when they are
laid off. Therefore, migrant workers try to keep their job regardless of circumstances, which makes
them extremely vulnerable to abuse by their employers, such as forced overtime (La Strada, 2008).
In its Supplier Responsibility 2009 Progress Report, Apple writes about migrant labour: Our most
significant discovery involved recruitment practices in which our suppliers had hired workers
from one country to work in factories in another country. Of the 83 facilities audited, we found six
facilities where these contract workers stated they had paid recruitment fees that exceeded the
applicable legal limits—often requiring them or their families to incur a debt. We classified this over-
charge as a core violation, our most serious category of violation, since these workers may not feel
at liberty to leave employment until the debt is paid. In addition to demanding reimbursement, Apple
has updated its Code to require that suppliers take responsibility for the entire recruitment process,
including the recruitment practices and fees of labour agencies in the workers’ home countries
(Apple, 2009).

Standards consulting, research, and cross-sector col-
laboration.
• ILO Migrant Workers (Supplementary Provi- • La Strada International is a network of inde-
sions) Convention No 143. pendent human rights NGOs aiming to prevent
• ILO Forced labour Convention No 29. trafficking in human beings with a focus on
• ILO Abolition of Forced Labour Convention women in Central and Eastern Europe. The
No 105. primary goal is to improve the position of
• ILO Private Employment Agencies Convention women and to promote their universal rights,
No 181. including the right to choose to emigrate
• UN International Convention on the Protec- and work abroad and to be protected from
tion of the Rights of All Migrant Workers and violence and abuse.
Members of Their Families. • Global Forum on Migration and Development
(GFMD).
• Tenaganita – protecting the rights of women
Existing initiatives and migrants in Malaysia. Tenaganita’s mission
is to undertake research, advocacy and action
• Business Social Responsibility (BSR) works to prevent, solve and address grave abuses
with its global network of more than 250 that happen to migrants and refugees.
member companies to develop sustainable
business strategies and solutions through
In Malaysia, the authorities have a stake in the trafficking of workers. Migrants obtain work permits
through employment agencies, permits which are approved by the government. At the Malaysian end
companies only need to state that they want to have an X number of workers to get an X number of
permits. This system is being misused as importing workers is a profitable business. Employment
agencies are easily tempted to make money out of labour migration and look the other way when
it comes to enforcing obligations under the contracts between workers and their intermediaries.
Cases are reported of corrupt officials working hand in glove with unofficial intermediaries. One
of the injustices migrant workers face for example in Malaysia is the deduction of levy from their
wages. The levy (1800 MYR, or about €357 per year) is a tax, supposedly to be borne by the employer
to discourage them from hiring migrants. However, almost all employers deduct this levy from the
migrant workers, effectively making it a tax on them. As many migrant workers work only part time,
this is felt as a disproportionate deduction (Tenanganita, 2009).
Flextronics provided seed money to help the Beijing-based Culture and Communications Center for
Facilitators (CCCF), an NGO committed to migrant worker issues, set up the Zhuhai Social Work and
Education Development Center for Facilitators (SWEDCF). This centre, in the vicinity of the Flextron-
ics industrial park in Zhuhai, aims ‘to enhance migrant talents, give them a sense of belonging in the
community, help them assimilate into society, provide them with case and group counselling, and
train up more volunteers for community work to create a harmonious society.’ Launched in May 2009,
SWEDCF is the first officially-registered, non-governmental organisation in China that is sponsored
by a private company and backed by the Chinese government. In conjunction with the launch of the
Centre a seminar on migrant worker issues was conducted (Flextronics’ email message to GoodElec-
tronics, 26 June 2009).

Recommended steps • ensure that migrant workers have employ-
ment contacts, and that suppliers comply
• Comply with all applicable laws, nationally with local law regarding minimum length of
and internationally accepted standards on service, duration, renewal or other terms
protection of migrant workers, whichever offer of such contracts;
greater protection. • make sure the terms of policies regarding
• Develop and implement ethical recruitment migrant workers are aptly communicated
policies incorporating specific notions con- to the workers concerned.
cerning migrants and women (OSCE, 2009). • Include such protections into codes of con-
• Gain a more complete understanding of the duct. See for example the policies developed
use of migrant labour within the supply chain, by Nike (Nike, 2009) and Apple (Apple, 2009).
including migrant workers’ countries of origin, • Include (migrant) workers employed by
recruitment process and terms of employment, employment agencies into collective bargain-
through (field) research and conversations with ing agreements.
suppliers. • Make sure migrant worker issues are
• Conduct a risk assessment of the supply addressed by auditing activities, and that
chain examining the use of migrant labour and migrant workers are adequately included in
determine the level of protections in place for audit interviews.
migrant workers in policies and implementa- • Employ on-site migrant worker coordinators
tion: by government and regional bodies; who speak the languages of both the migrant
under existing codes of conduct. workers as well as the factory management.
• Integrate greater protections for migrant work- • Support programmes strengthening the rights
ers in the supply chain and engage directly of migrant workers such as the funding of
with suppliers on training and verification. community centres catering to the needs of
• Contribute to informing migrant workers about migrant workers.
their rights and the general conditions in the • Include migrant labour issues in CSR
country or region of employment, as well as on reporting.
visa procedures, wages and working condi-
tions.
• Develop and implement anti-discrimination
protections for migrant workers in the supply
chain:
• migrant workers should be provided the
same terms and conditions of employment
as non-migrant workers;
• migrant workers shall not be required to
lodge identity papers with their employers.
Employers may provide safekeeping of
such documents;
• ensure suppliers are taking responsibil-
ity for the payment of all legally allowed
fees and costs. Such fees and costs,
including health check, visa, work permit
or registration fees, may not be passed
on to employees in any form such as
wage deductions, garnishments, ‘levies’,
‘deposits’ or ‘guarantee monies’;

Part 3.
Environmental aspects
Energy
Issues insufficiently sustainable design of electronics

devices. Most products are burning up at least half
The environmental impact of electronic products as much power when idle as when they are flat
is huge. Some factors to take into account are eg, out. Machines with external power supplies draw
the effects of the irresponsible mining of precious current, even when the device itself is switched
metals required for electronic products, or the off. Cathode ray tube screens consume power
pollution caused by toxic chemicals used during continuously, compared to flat screen monitor
manufacturing. Life Cycle Analysis (LCA) shows that consume little or no energy when in stand-by
that one of the most critical factors is the massive mode. Typical ‘thick client’ hardware has much
consumption of energy during mining, component higher energy consumption than ‘thin client’ hard-
manufacturing and recycling of electronic equip- ware. Another factor that comes into play is the
ment. One of the factors contributing to this high substantial increase of the number of data centre
level of energy consumption is the obsolescence over the past decades. Data centres nowadays are
of electronic equipment. In developed countries, full up with energy consuming hardware. Storage
mobile phones have a life cycle of less than two technology is becoming the biggest energy con-
years; the average lifespan of computers has sumer in contemporary data centres. The cooling
dropped from six years in 1997 to just two years of such data centres is highly energy consuming.
in 2005. (Greenpeace). This obsolescence has two
sides: ‘planned’ and ‘perceived’ obsolescence. Careless consumer behaviour is not helping.
Planned obsolescence refers to the fact that this Mobile phone chargers are left plugged in. Com-
type of equipment is not designed to last. The puters are left on when, in stead of being turned
‘perceived’ obsolescence adds to this; influenced off. Some estimates claim that as much as 60%
by marketing and retailing practices consumers of the capacity of every disk that is used to store
are convinced they need new stuff all the time, as business information contains stale, duplicated
a consequence they keep on replacing ‘obso- or otherwise useless data as a result of poor data
lete’ products with newer models. (Story of Stuff, discipline (Greendata, 2009).
2007). The overall use of electronic products is
supposed to increase in the coming years, due to Slowly, companies are developing policies on
various factors, like the continuing multiplication of energy efficiency as part of their environmental
products per household, the increase of computer policies, focusing on reducing the energy needed
and television screen sizes, and the switch to high to manufacture and use their products. These poli-
energy consuming high definition. cies are generally limited to the companies’ own
operations – a supply chain view has not yet taken
Then there is the high energy consumption of root here.
electronic products itself. Again, this relates to
Nokia has worked out that, if 10% of worldwide mobile phone subscribers unplug their charges
once their mobile phone is fully charged, enough energy would be saved to supply 60,000 European
homes with energy for a one year (Consumers International, 2008).

Standards the acceleration of power consumed by data
centres is to manage data better.
• Regulation (EC) No 106/2008 of the European • The Dutch ICT trade association ICT~Office
Parliament and of the Council of 15January has developed an action plan to contribute to
2008 on a Community energy-efficiency label- improve energy efficiency, by joining the Mul-
ling programme for office equipment. tiple Year Energy Efficiency Agreement (MJA)
• Directive 2005/32/EC on the eco-design of established by the Dutch Ministry of Economic
Energy-using Products (EuP). Affairs in July 2008. ICT companies subscrib-
ing to the objectives of this Agreement, com-
mit to make an effort to improve their annual
Exiting Initiatives energy efficiency with 2%, to bring about a
30% energy use reduction in 2020 compared
• Various voluntary environmental performance to the 2005-level.
eco-labels have developed criteria for lower
energy consumption during use and standby
of electronic appliances, including the Global Recommended steps
Ecolabelling Network (GEN) and the Euro-
pean Ecolabel (Green Flower). GEN is a third • Comply with the highest international stand-
party programme that awards a license that ards regarding energy use.
authorizes the use of environmental labels • Improve and promote energy efficiency – in
on products indicating overall environmental the own operations and throughout the supply
preferability of a product within a particular chain.
product category based on life cycle consid- • Increase and promote the amount of renew-
erations. GEN has eg, formulated Core Criteria able energy 1 – used in the own operations and
for personal computers, and encourages its throughout the supply chain.
members to consider inclusion of these core • Invest in design for sustainability or design
criteria in their own programme criteria docu- for recycling. More specifically, improve the
ments and processes. The European Eco-label energy efficiency of new models of specified
has developed criteria for personal and port- products, taking the latest Energy Star stand-
able computers. ards as a reference.
• Energy Star standard, a joint program of the • Develop innovative solutions enabling other
U.S. Environmental Protection Agency and sectors, industries and companies to reduce
the U.S. Department of Energy, is helping their energy use. Promote energy saving atti-
to protect the environment through energy tudes among users of electronic equipment.
efficient products and practices. Other well- • Reform data centres. Apply rigorous data dis-
known eco-labels include TCO, an eco-label cipline. Choose smart, energy-efficient cooling
for IT products and the Blue Angel. The Energy systems.
Star energy standard is increasingly taken as a
minimum requirement.
• Greenpeace Guide to Greener Electronics
with specific criteria on energy use. Again, the 1 “Renewable Energy Sources (RES)” shall mean renewa-
Energy Star standard is taken as a benchmark. ble non-fossil fuels (wind, solar, geothermal, wave, tidal,
• The Green Grid is a voluntary global corporate hydroelectric installations with a capacity below 10 MW and
biomass which means products from agriculture and forestry,
consortium that is developing standards to vegetable waste from agriculture, forestry and from the food
measure data centre efficiency, which includes production industry, untreated wood waste and cork waste)
both the facility and the IT equipment inside of it. as in the definition used in the Proposal for an EU Directive on
the promotion of electricity from renewable energy sources in
• The Green Data project argues that the most the internal electricity Market - (http://www.recs.org/doctree/
intelligent and strategic approach to slowing EU%20documents/RES-electricity%20directive.pdf).

Carbon footprint –
greenhouse gases
Issues the total set of directly and indirectly caused GHG

emissions. Increasingly, a supply chain view is
The so-called greenhouse gases (GHG) are a taken.
by-product of land-use changes, burning fossil
fuels, biomass burning and other industrial proc- The information and communication technologies
esses. Power generation and transportation score sector is estimated to contribute between 2-3%
high in GHG emission. Carbon dioxide (CO2) of worldwide greenhouse gas emissions. As the
is the principal greenhouse gas, PFCs or per industry continues to develop globally, this is set
fluorocarbons form another class of potent GHG. to increase further. Emissions from the sector are
Greenhouse gases are at the root of far-reaching estimated to rise significantly over the coming
climate changes, most importantly the warming years – from 0.5 GtCO2e today to 1.4 GtCO2e in
of the climate. This warming-up is evident from 2020 under BAU growth (Climate Group, 2008).
numerous observations. Further effects of even This concerns energy efficiency of products and
moderate warming may include sea level rise; services in the first place. However, supply chain
massive releases of greenhouse gases from melt- emissions from activities such as processing,
ing permafrost and dying forests; more extreme packaging and transportation often exceed those
weather events such as heat waves, droughts arising from an individual purchasing company’s
and floods; increased risks of flooding and ero- own operations (Carbon Disclosure Project,
sion; natural systems will be threatened; and an 2009). Looking at the carbon implications of raw
increase in existing risks of species extinction and materials, production and disposal of electronics
biodiversity loss. The greatest impacts will be on products, throughout the different tiers of the sup-
the poorer countries least able to protect them- ply chain, by making a Life Cycle Analysis, again
selves from rising sea levels, spread of disease gives another picture.
and declines in agricultural production (Green-
peace, 2009). Scientists and economists, including The ICT industry clearly has a responsibility to
the eminent Intergovernmental Panel on Climate contribute to the much needed reduction of GHG-
Change (IPCC), show that the temperature rise will emissions. This can be done by increasing the
need to be halted well below 2°C (IPCC, 2007). A energy-efficiency of products and services and
25-40% reduction in industrial country greenhouse by making use of renewable energy sources. It
gas emissions by 2020 is recommended to avoid has been calculated that ICT companies can help
dangerous climate change, taking 1990 emis- cut projected GHG emission by 15% by 2020.
sion levels and Business as Usual (BAU) growth ICT companies could deliver approximately 7.8
as benchmarks. Carbon and climate change are GtCO2e of emissions savings in 2020 based on a
serious issues, with critical commercial, financial, Business as Usual (BAU) estimation. In economic
operational and brand implications. Therefore for terms, the ICT-enabled energy efficiency translates
companies to manage carbon and climate change into approximately €600 billion ($946.5 billion) of
in their supply chains is not an option, it is basic cost savings. A huge influence ICT companies
business sense. There are financial and business can have on climate change would be by enabling
implications in not doing it (Carbon Disclosure energy efficiencies in other sectors. For example
Project, 2009). A company’s carbon footprint is by enabling smarter transport, building energy

efficiency, smart power grids, and power transmis- Standards
sion and distribution (T&D). In this way, carbon
savings five times larger than the total emissions • The United Nations Climate Change Confer-
from the entire ICT sector could be delivered in ence in Bali in 2007 culminated in the adoption
2020 (Climate Group, 2008). Moreover, by taking of the “Bali Road Map”, which includes the
a supply chain approach – companies setting Bali Action Plan that charts the course for a
reduction goals throughout their supply chain in new negotiating process designed to tackle
collaboration with their suppliers – significantly climate change.
higher reduction goals can be achieved. • The Greenhouse Gas Protocol (GHG Proto-
col) is a widely used international accounting
An increasing number of ICT companies, including tool for government and business to under-
HP, Nokia, Microsoft, Sun, Cisco and Ericsson, stand, quantify, and manage greenhouse
Google, Dell, IBM and Lenovo, have already said gas emissions. The GHG Protocol serves as
(through the Global e-Sustainability Initiative, the foundation for multiple GHG standards
GeSI, or through the Climate Group) that they are and programmes in the world – including the
able to provide solutions that will reduce pro- International Standards Organization (ISO). In
jected GHG emissions by 15% by 2020 through IT 2001, the Greenhouse Gas Protocol Corpo-
enable solutions. Companies are already focusing rate Standard, was published. Since then the
on product and service innovation, for example GHG Protocol has built upon the Corporate
by making their own operations, data centres and Standard by developing a suite of calculation
product lines more energy efficient. Companies, tools to assist companies in calculating their
however, are mainly focusing on their own opera- greenhouse gas emissions and additional
tions. Taking a supply chain view is still rare. guidance documents. The Carbon Disclosure
Company pledges
• Dell has pledged to reduce operational carbon intensity by 15% by 2012, based on 2007 levels,
and to further reduce worldwide facilities’ GHG emissions by 40% by 2015. Dell maintains that it
has already achieved carbon neutrality in its global operations.2
• HP’s goal is to reduce energy consumption and the resulting greenhouse gas (GHG) emissions
from HP-owned and HP-leased facilities worldwide to 16% below 2005 levels, by the end of
20103.
• IBM set itself an aggressive “second generation” goal: to reduce the CO2 emissions associated
with its energy use 12% by 2012 against a 2005 base year through: a) energy conservation,
b) use of renewable energy, and/or c) funding an equivalent CO2 emissions reduction by the
procurement of Renewable Energy Certificates (RECs) or comparable instruments4.
• Vodafone: Cut emissions by 50% by 2020 (from the 2006/07 baseline). This target will be achieved
principally by improvements in energy efficiency and increased use of renewable energy.
In addition, as part of its climate change strategy, Vodafone will be focusing on developing
products and services which will help customers limit their own emissions5.
2 http://i.dell.com/sites/content/corporate/corp-comm/en/Documents/Dell_CR_Summary_Report_FINAL.pdf
3 http://www.hp.com/hpinfo/globalcitizenship/gcreport/energy/operations/greenhouse.html
4 http://www.ibm.com/ibm/environment/climate/co2_secondgoal.shtml
5 http://www.vodafone.com/start/media_relations/news/group_press_releases/2007/01.html

Project and the Global Reporting Initiative are Existing initiatives
using the GHG Protocol Corporate Standard.
• The ISO Standard 14064-1:2006 is based • Carbon Disclosure Project
upon the GHG Protocol Corporate Standard. • EICC Carbon Reporting System for Electron-
This standard specifies principles and require- ics Companies, an industry-wide system for
ments at the organisation level for quantifica- tracking carbon footprint of supply chains.
tion and reporting of greenhouse gas emis- • Greenpeace COOLITCHALLENGE, a cam-
sions and removals. It includes requirements paign to turn IT industry leaders into climate
for the design, development, management, advocates and solution providers.
reporting and verification of an organisation’s
GHG inventory.
• The 1997 Kyoto Protocol is an interna- Recommended steps
tional agreement linked to the United Nations
Framework Convention on Climate Change. • Comply with all applicable laws, nationally and
The major feature of the Kyoto Protocol is internationally accepted standards on green-
that it sets binding targets for 37 industrial- house gases emission reduction, whichever
ised countries and the European Union for sets the highest target.
reducing GHG emissions. Countries must • Integrate the measuring, management and
meet their targets primarily through national reduction of GHG emissions and climate
measures. However, the Kyoto Protocol offers change impacts into mainstream business
countries an additional means of meeting processes, by formulating a clear business
their targets by way of three market-based case.
mechanisms: emissions trading (“the carbon • Set specific, concrete GHG emission reduction
market”), clean development mechanism and targets, in both absolute and intensity terms.6
joint implementation. The Kyoto protocol cov- Companies to be specific about what gases
ers six greenhouse gases — carbon dioxide they attempt to reduce (CO2, PFC or other
(CO2), methane (CH4), nitrous oxide (N2O), gases) and what phases of their supply chain
hydro fluorocarbons (HFCs), per fluorocarbons they are focusing on, their own operations as
(PFCs), and sulphur hexafluoride (SF6). well as first and second tier suppliers.
• The United Nations Framework Convention on • Transparently and publicly report upon targets,
Climate Change (UNFCCC). This international efforts and progress of GHG emission – in
environmental treaty sets an overall frame- all areas of company operations, includ-
work for intergovernmental efforts to tackle ing first and next tier suppliers. Provision of
climate change. 192 countries have ratified aggregate carbon emission estimates, that
the Convention and it entered into force on 21 is total company emissions. Be clear about
March 1994. what is included in their GHG data. Data to
• The 1972 Declaration of the United Nations be provided in a similar format as provided by
Conference on the Human Environment, or competing companies to allow for comparison
Stockholm Declaration, was adopted on 16 with peers.
June, 1972 by the United Nations at the 21st • Participate in the Carbon Disclosure Project
plenary meeting as the first document in inter- and the CDP annual survey.
national environmental law to recognise the • Participate in the EICC Carbon Reporting
right to a healthy environment. System for Electronics Companies.
• Source items which will help shrink the carbon
footprint. Choosing less carbon-intensive
products is a good first step. Work with and
involve suppliers.

• Look into capturing and sequestering CO2,
methane, and other greenhouse gases that
would normally be released to the atmos-
phere.7
• Electronic sector leaders to call upon world
leaders to deliver a climate saving deal – at the
UN Climate Summit in Copenhagen in Decem-
ber 2009, as well as beyond – and effectively
influence urgent global climate regulation.
Support for global mandatory reduction of
GHG emissions. Heed the call of Greenpeace’
COOLITCHALLENGE.
• Provide products and services to help custom-
ers (in the supply chain) reduce their emis-
sions.
• Training of employees on climate change
issues.
• Facilitation of improvements and GHG reduc-
tions in other sectors.
• Optional: work with tradable Renewable
Energy Certificates (REC), also known as
offsets.
6 Greenhouse gas intensity is the ratio of greenhouse gas emissions to economic output.
7 Carbon sequestration is a technique that consists of capturing carbon dioxide from man-made sources and permanently storing it
somewhere other than the atmosphere (eg, terrestrial (biota), oceanic, or geologic sequestration).

Pollution
Issues The electronics industry has high resource

intensity, in terms of chemicals, energy and water
Throughout the life cycle of electronic products, demands. Hazardous or toxic substances include:
pollution is an issue. For a start, in the extrac-
tives phase pollution is a real concern. In open pit • brominated flame retardants (polybrominated
mining, rocks and soil are simply blasted away diphenyl ethers (PBDEs), TBBPA as well as
in search of the required metals, producing an phosphorus based compounds (including
enormous amount of solid waste in the process. TPP). Flame-retardants are chemicals added
The pursued metal often only accounts for a very to a wide variety of materials, including cas-
small percentage of the total extracted mass; ings and components of many electronic
to produce one ton of copper, for example, 110 goods, to prevent the spread of fire;
tonnes of solid waste and 200 tonnes of over- • phthalates; widely used as plasticizers
burden are generated. The waste may contain (softeners) in plastics;
considerable concentrations of toxic substances • certain chlorinated solvents; containing dis-
such as arsenic and lead. These are either present solved photoresist mixtures;
in the upturned soil as natural impurities of the • photo-initiator related chemicals;
ore, or may be introduced as auxiliary substances • heavy metals including soluble copper;
to facilitate the extraction of the ore. Irresponsible • The process of creating circuits utilises com-
mining may cause contamination or even the complex photochemistry, ie, exploiting chemical
plete depletion of drinking water and other water changes through exposure to ultraviolet (UV)
sources essential for farming. Air pollution by dust light. These processes create complex waste
exhausts is also frequently observed. Forest, farm- streams that include photoreactive chemicals.
and pasture-lands may be usurped by mining sites Spent Developing solution is one of the larg-
and irrevocably turned into dusty, barren moon est liquid waste streams generated by PWB
landscapes. When companies close down their manufacturing (Greenpeace, 2007).
mining operations they often do so without clean-
ing up the land. A problematic aspect concerns Irresponsible waste management at production
the difficulty in establishing the accountability sites may cause environmental contamination
of mining companies for collective environmen- through discharged wastewaters and sediments
tal impacts, as these are notoriously difficult to from discharge pipes/channels. Also at the level
attribute to one single company (SOMO, 2007). of common wastewater treatment plants (WWTP)
that receive wastewaters from different plants
Hazardous chemicals and materials are amply contamination may occur. The discharged waste-
used in electronics products. The negative effects water, even when treated, and treatment sludges/
for human health are described in the chapter on sediments of WWTPs often contain chemicals or
occupation health and safety. Much less is known heavy metals. Treatment processes may be able to
about environmental pollution at production degrade certain chemicals, but they are not effec-
locations. Preliminary research into printed wiring tive at dealing with persistent organic chemicals
board (PWB) manufacture, semiconductor chip and heavy metals in wastewaters. Ground water
manufacture and component assembly, however, pollution is one of the main risks.
points to highly problematic pollution issues.

For some chemicals identified in waste streams Standards
very little information is available on their toxicity
and environmental properties, presumably largely Also see chapter on occupational health and
as a result of rapidly changing manufacturing safety.
processes and the chemicals employed within
certain sectors. The possible impacts on human • OSPAR Convention for the Protection of the
health and the environment due to the use and Marine Environment of the North-East Atlantic;
release of these chemicals, therefore, remain the OSPAR List of Chemicals for Priority
largely unknown (Greenpeace, 2007). Action (Update 2007); and the OSPAR List
of Substances of Possible Concern (Update
In the disposal phase chemicals risk being 2002, a revised list will be published in 2009).
released to the environment without fitting precau-
tions. One of the underlying problems is that elec-
tronic products are not designed for recycling. The Existing initiatives
lion’s share of the materials in e-waste can hardly
be re-used. Moreover, the methods applied to Also see chapter on occupational health and
dispose of electronic waste are far from sophisti- safety.
cated, and that is not only in developing countries:
plastic shredding, acid processing/leeching, open • Promotion of producer responsibility. A 2006
burning, residue dumping, land filling, incinera- report by Greenpeace and others, based on
tion, stripping. According to the US Environmental existing EPR programmes and anticipated
Protection Agency, more than 4.6 million tonnes EPR legislation, demonstrates that EPR laws
of e-waste ended up in US landfills in 2000. Toxic – both those mandating substance bans and
chemicals can leach into the land over time or are setting re-use/recycling targets – do indeed
released into the atmosphere, impacting nearby prompt positive product design change. In
communities and the environment. In many Euro- particular, individual producer responsibility
pean countries, regulations have been introduced policies turn out to be more effective in creat-
to prevent electronic waste being dumped in land- ing incentives for product design change, than
fills due to its hazardous content. The exported policies requiring collective producer respon-
waste does still end up in dumps. An estimated sibility.’
10 to 20 percent of discarded computers in Hong • ISO standard 11469 Plastics -- Generic identi-
Kong, for example, go to landfills. Substantial fication and marking of plastics products.
quantities of toxic heavy metals and organic
compounds are released to the air, soils and water
courses surrounding e-waste dismantling sites. Recommended targets
In Guiyu, China, heavy metals contamination
(cadmium, cobalt, chromium, copper, nickel, lead • Comply with international and national legisla-
and zinc) from printed circuit board recycling may tion or established international standards
present a significant environmental risk (Leung, regarding pollution, whatever offers the high-
2008). Further substances include tin and organic est environmental protection.
contaminants like brominated, chlorinated and • Embrace Individual Producer Responsibility
phosphorus based mercury; cadmium; hexava- - as a principle of product policy to address
lent chromium; polybrominated biphenyl (PBB); the lifecycle issues of products – and to show
beryllium; gallium; polybrominated diphenyl ethers positive action in getting the own branded
(PBDE), and antimony (Greenpeace, 2009). products back for reuse and recycling.
• Adopt a chemicals policy that is underpinned
by the precautionary principle, meaning taking
action to substitute/eliminate a suspect chemi-

cal or group of chemicals, even if the scientific
jury is still out on whether these chemicals are
definitely causing environmental harm. Imple-
menting a precautionary chemicals policy
requires a system for collecting information on
new suspect chemicals, and mechanisms for
triggering corporate action to phase them out
and begin looking for safer substitutes.8
• Commit to eliminating PVC and all BFRs in
all applications, with a reasonable timeline by
which phase out will be complete, or to those
who have already fully implemented this com-
mitment.
• Commit to eliminating all phthalates; beryllium,
including alloys and compounds; and anti-
mony/antimony compounds within a reason-
able timeline.
• Design for disassembly and recyclability.
• Join the BAN e-Steward initiative or similar
initiatives in other countries.
• Track toxic chemicals on process level, eg,
by collecting Materials Accounting Data for
each production process, to be able to identify
opportunities for waste prevention and materi-
als efficiency (Inform, 1997).
• Make lists of restricted/banned substances
publicly accessible and describe how these
requirements are enforced along the supply
chain. In addition, provide lists of substances
being considered for future restriction or
elimination as well as information explaining
the factors they consider to make these lists
(Greenpeace, 2009).
8 Candidate chemicals for precautionary action are those whose intrinsic properties include carcinogenicity, mutagenicity or reproductive
toxicity, chemicals that are persistent, bio-accumulative and toxic (PBTs) and those that are very persistent and very bio-accumulative
(vPvBs). They can also include substances identified as having serious and irreversible effects to humans and the environment, for
example certain endocrine disrupting substances (substances disturbing the body’s hormone system) (Greenpeace, 2009).

Part 4.
Economic aspects
Purchasing practices
Issues Standards
One of the factors that contribute to the harsh • Unidroits Conventions, including the Conven-
working conditions in many sectors in developing tion relating to a Uniform Law on the Forma-
countries is the pressure exerted by companies tion of Contracts for the International Sale of
throughout the supply chain (retailers and brands Goods.
as well as first and further tier suppliers) on lead
times and prices. This pressure means that sup-
pliers need to speed up production outputs, cut Initiatives
down on labour costs, and demand longer work-
ing days. This may also cause wages to fall below • The Responsible Purchasing Initiative. This
the cost of living. This causes social hardships initiative is coordinated by three European
for the workers concerned (Procure IT fair, 2009). fair trade organisations and explores how it is
At the same time, buying companies increasingly possible to improve the impact of purchasing
demand their suppliers to comply with labour activities on the lives of people in developing
standards. This is happening in the electronics countries, by looking at the roles of EU busi-
sector as in other sectors. Companies should nesses, public authorities and consumers.
address the conflicting logic of pursuing lower • The Chartered Institute of Purchasing and
prices and shorter delivery times whilst simultane- Supply (CIPS) is an international organisation,
ously pursuing compliance with labour standards. based in the UK, serving the purchasing and
In a competitive market, standards which place supply profession. Dedicated to promoting
significant additional costs on factories may serve good practice, CIPS provides a wide range of
to undermine - rather than support - the type of services for the benefit of members and the
improvements that the standards are designed wider business community.
to bring about. Under pressure to cut costs or to
source sufficient quantities, buyers sometimes
buy from outside the standards they require. This Recommended steps
sabotages the whole relationship, undermin-
ing trust and confidence, leading to mistrust of • Comply with international and national legisla-
standards or a temptation to ‘fake’ compliance tion or established international standards,
(Traidcraft, 2008). Also, when the buying company whatever offers the highest social and environ-
constantly shifts its orders, suppliers may feel mental protection.
that there is no incentive for making the required • Develop an ethical purchasing code and
improvements (Clean Clothes Campaign, 2008). integrate responsible purchasing practices into
These are consequences of the arbitrary or unfair the code of conduct.
use of the purchasing power or influence of buying • Enter into honest contracts based on the
companies, while instead of inhibiting, purchasing Unidroits Conventions.
practices should enable suppliers to be decent • Establish close cooperation between the inter-
employers. nal procurement department, the corporate
social responsibility department and suppliers.

• Look into shortening the supply chain with an agreements and processes. These incentives
eye to reducing supplier’s transaction costs could include a premium, increased order
• Foster continuity in trading relationships with volume, long-term commitment to the supplier
individual suppliers. As well as helping with and other possible incentives. Incentives for
traceability, knowing their suppliers puts com- collective bargaining agreements should only
panies in a better position to understand their be applied in cases where the CBA includes a
problems and work together towards improve- living wage, adequate limits on working hours
ments (Traidcraft, 2008). and provision for job security. Such incen-
• Develop a contract or memorandum of under- tives should also only be applied in cases
standing with suppliers specifying the length where the union which negotiates the CBA is
of the relationship or notice period required for the appropriate collective bargaining agent,
termination of the relationship. This facilitates was not formed by management, is not under
trust, loyalty and makes it easier to make posi- external control, and is democratic through
tive long term investments (Traidcraft, 2008). following its own rules (assuming those rules
• Regularly assess the positive and negative make the union leadership democratically
impact of purchasing practices on all workers, accountable to the union’s members and that
take steps to remediate the negative impacts, all non-management workers at the factory
and communicate the results of the assess- are allowed to join that union). The process for
ment and remediation to workers throughout checking whether the union meets these crite-
the supply chain, their representatives, and the ria needs to be independent, transparent and
public. Attention should be paid to the impact credible (Oxfam Australia and Clean Clothes
of purchasing practices on more vulner- Campaign, 2009).
able groups of workers, including women, • Buyers should ensure information on product
migrants, contract workers and home workers price is available to the union to use in collec-
(Clean Clothes, 2009). tive bargaining negotiations. In order for this to
• Apply reasonable supply lead times. be feasible, both buyers and factory manage-
• Work out, together with suppliers, what would ment will have to be more forthcoming with
be a minimum sustainable product price. A information regarding costs (Oxfam Australia
sustainable product price enables the supplier and Clean Clothes Campaign, 2004).
to meet its costs of production, have sufficient • Buyers should make it clear to government
capital for investment, comply with buyers’ authorities they are prepared to ensure a fair
standards, and ensure that workers receive a product price is paid which leaves room for
living wage (Traidcraft, 2008). A minimum sus- meaningful collective bargaining at the factory
tainable product price adequately supports the level.
terms and conditions of a negotiated collective
bargaining agreement (CBA). Where no CBA
exists buyers should still follow fair sourcing
and pricing practices such that suppliers are
able to comply with internationally recognised
labour standards and function with a reason-
able enough margin through which meaningful
collective bargaining can take place (Oxfam
Australia and Clean Clothes Campaign, 2009).
• Look into the advantages and disadvantages
of a preferential supplier policy. Explore
incentives for suppliers who respect free-
dom of association and collective bargaining

Export Processing Zones
Issues In law and in practice, freedom of association

and the right to collective bargaining are at risk in
Millions of workers throughout the world work EPZs. Whether this threat is brought about by law
in Export Processing Zones, also known as or by a lack of enforcement of existing laws, the
Maquiladoras, Free (Trade) Zones, Free Ports, result for workers is the same. EPZs are often set
Special Economic Zones, economic and technol- up in economically deprived areas where labour is
ogy development zones, or high-tech industrial cheap and workers are more fearful of losing their
development zones. Whatever the precise name, jobs if they make demands. The workers pool gen-
such zones are designated industrial areas of a erally has a large share of women workers, migrant
country where government regulation, taxes and workers, young workers and temporary workers.
trade tariffs are lifted or dramatically reduced in an In short, workers in precarious employment posi-
effort to attract foreign investment. The concept of tions. Largely unorganised, these workers have
EPZs is not a new one, but since 1995 there has little or no access to unions. In some cases, physi-
been an increase in the number of countries with cal barriers in the form of fencing, gates, guards
EPZs, in the overall number of EPZs, and in the and razor wire prevent union organisers from
number of workers employed there. It is estimated making contact with workers. An absence of trade
that there are currently approximately 3,500 EPZs unions, with their pressure to improve wages and
throughout the world, operating in around 130 working conditions, is indeed one of the factors
countries and territories and employing around 66 that attract companies to locate factories in EPZs
million people (ILO InFocus, 2008). EPZs provide and as a result Export Processing Zones now
special economic incentives such as customs- provide the most radical examples of employer
free, tax-exempt and export-oriented manufactur- opposition to union membership (Holdcroft, 2009).
ing facilities and investment incentives, stream-
lined administration, cheap utilities and better A recent survey has compiled information on a
infrastructure than outside the zones. Moreover, number of issues pertaining to zones, such as
in a few countries, EPZs are given exemptions to legal restrictions on unionisation and union mem-
national labour law regulations. The lack of regula- bership, blacklisting of union officials, interference
tion in EPZs comes at a great cost to workers’ in the affairs of workers’ organisations, refusal
rights, health and safety, environmental standards to negotiate, harassment, violence and reprisals,
and social protections. legal restrictions on industrial action including its
prohibition by classifying EPZs as essential serv-
Increasingly, electronics manufacturing is found in ices, as well as exemptions and ambiguity
EPZs.
When the Malaysian government set up EPZs, it banned the formation of national unions in the
electronics industry as an incentive to foreign electronics companies to invest in the development
of that sector. According to the Trade Union Advisory Committee to the OECD (TUAC), 96 per cent
of all workers in seven EPZs in Malaysia are employed by foreign transnationals, and electrical and
electronics firms account for 65 per cent of all EPZ employment (Holdcroft, 2003). Today there is still
no national electronics union in Malaysia.

regarding the application of labour law and access tors of the economy, often in violation of national
to zones (ILO InFocus, 2008). law. Excessive overtime is linked to the nature
of many industries in EPZs or to a global chain’s
There is discrimination in terms of pay equity and requirements. Firms have seasonal demand peaks
equal treatment between male and female EPZ and may need their staff to work longer hours to
workers. Although the rights of pregnant women compensate for defect rates or to comply with
and young mothers are generally respected, dis- shipping deadlines. Overtime is often mandatory
criminatory practices still persist (such as refusal and refusing to extend working hours may lead to
to hire pregnant women, job losses and failure to dismissal or other forms of retaliation. Long and
grant maternity leave). unpredictable hours have an impact on the ability
of workers to combine paid work and domestic
In most EPZs, migrant workers are more likely obligations.
than local workers to be victims of discrimination.
Because of language barriers and restrictions Labour administrations often do not have enough
imposed by employers, immigrant workers are resources, in terms of either staff or transport,
even more difficult for unions to organise than to address non-compliance with labour laws, to
local workers. minimise labour disputes or to carry out regular
inspections in the zones. They may even be dis-
The rights of workers regarding recruitment and couraged from entering the zones.
dismissal are often not respected. Recruitment is
not always formally organised. Firms have been Many countries see export promotion as an
known to close without warning within the zones, important policy for economic growth in develop-
leaving workers without compensation, back-pay ing countries. Various measures are being adopted
or national insurance payments. There are an by the governments in these countries to promote
increasing number of complaints regarding non- export competitiveness. EPZs have generated
payment towards provident funds. employment, but they do not automatically lead to
sustainable social development and poverty alle-
In countries across the world, including China, viation. EPZs increase the dependency of devel-
Indonesia and Madagascar, EPZ workers tend to oping countries on foreign capital and can create
work longer hours than workers in other sec- unfair competition with domestic industries, which,
There are three types of employees hired in the Export Processing Zones of Batam, Indonesia. The
most exploited worker is an ’outsourced worker’. They are hired through a labour agency and usually
sign a contract with the agency which holds them liable should they lose their job, sometimes at fees
5 to 10 times their normal wage. These employees are traded like commodities, one step removed
from human trafficking. Should they get ill, pregnant or hurt on the job, the company will immediately
release them and the labour agency will likely fine the employee for breach of contract. Trade union
FSPMI has been successful in negotiating an end to all of these types of contracts for outsourced
employees. In FSPMI plants, these contracts no longer exist. ’Contract Workers’ are generally hired
by the principal company or recruited by an intermediary but contracted with the company directly.
Contracts range from three months to two years. By law, after three years of contracted work, work-
ers should be hired permanently by the employer. Trade unions Lomenik and FSPMI have both been
successful in using this unforced law to make companies change the status of workers after three
years. This has been largely due to positive outcomes for the unions in the courts on this issue. ’Per-
manent workers’ make up a very small minority of workers. Many of these jobs are staff positions
and at management level. These workers tend to make more money through annual raises and have
better benefits (Ivanou, 2008).

unlike the foreign firms, cannot import inputs duty Recommended steps
free. Backward linkages also seem to be minimal,
with domestic orders remaining at a low level and • Ensure that internationally accepted labour
technology spillovers rare (ILO InFocus, 2008). rights are respected throughout the supply
chain, including in EPZs, in particular the right
The labour rights issues described here do not to organise and to bargain collectively.
uniquely occur in EPZs; to a large extent the same • Facilitate and promote the proper functioning
concerns apply in electronics manufacturing out- of the labour inspection.
side these zones. It should be recognised that the • Improve information flows to workers, employ-
situation in EPZs will not improve significantly until ers and governments through social dialogue
the overall employment conditions – in particular and collaboration among stakeholders, includ-
with regard to the right to freedom of association ing workers, employers, ministries of labour,
and collective bargaining – in the larger domestic economy or trade and industry, EPZ authori-
economy are improved. ties and labour inspectors.
• The InFocus Initiative on export processing

zones created by the ILO Governing Body.
The key issue is the examination of what
constitutes the most appropriate policy pack-
age to encourage a steady improvement in
the quality of production and employment in
manufacturing sectors competing on global
markets. Using social dialogue and a rights-
based approach, the Initiative will seek to
foster effective, coordinated national policies
on decent work, which encourage investment
and trade and promote core labour standards
and adherence to national laws. Specific
attention will be paid to the gender dimension
of decent work.

Taxation
Issues Most income taxes are designed to spare people

or businesses with incomes below a certain level.
Tax issues are relevant throughout the electronics However, special exemptions or deductions are
value chain. In the mining phase, non-transparent also provided to wealthy individuals and business-
or secret mining contracts between governments es, sometimes with the stated goal of encouraging
and companies are common. Both governments certain activities (such as investing in a particu-
and mining companies in some cases refrain lar sector of the economy), sometimes simply
from publishing data on revenues, import, VAT, because these powerful groups were able to
royalties, profits, etc In the manufacturing phase, influence the political process. But when wealthy
key issues are the payment (or non-payment) of individuals and businesses are able to evade taxes
corporate income taxes and the lack of transpar- it leads to a less equitable tax system. The special
ency regarding taxes. exemptions and deductions require higher tax
rates on everyone else to raise the same level of
Governments need tax revenues for investments revenue, thwarting the goal of a graduated income
in public goods and services like infrastructure, tax (International Budget Project, 2006).
education, health care and a social safety net.
These investments are of great important for Often, companies pay no tax or receive a refund,
national welfare, a good enabling environment even though they are profitable. It occurs that
for the private sector and for economic develop- companies report higher profits to their share-
ment in general. It is important that all individuals holders than to the tax office (Internal Revenue
and firms, who are benefiting from these public Service), sheltering part of their profits from the tax
services, contribute to this by paying a fair share collector. Much of this sheltering occurs as a result
in taxes (Tax Justice Network, 2009). of tax breaks that have been explicitly enacted
into law, such as a generous depreciation allow-
Whether corporations pay or evade taxes is an ance, but some also reflects the use of offshore
important part of how they affect the communities tax havens (International Budget project, 2006).
in which they operate. As such, corporate tax poli- Problems arise when individuals and businesses
cies along with social and environmental policies take advantage of loopholes and ambiguities in
should be considered as a corporate responsibility the tax law in order to avoid taxes. While these
issue (International Budget Project, 2006). types of schemes may be technically legal,
aggressive tax avoidance violates the spirit of the
law by exploiting unintended loopholes.
African governments are deprived of millions of dollars as many contracts signed with governments
remain secret, with mining companies using this secrecy to pursue aggressive tax avoidance strate-
gies. Mining companies use various methods to pay as little tax as possible. These include forcing
governments to grant tax subsidies and concessions by threatening to go elsewhere if they are not
forthcoming and using false accounting to enable companies to artificially depress profits in the
countries where they operate in order to evade tax (ActionAid, 2009).

Moreover, tax avoidance can easily cross over into Tax preferences reduce or eliminate taxation of
tax evasion, or the illegal non-payment or under- selected goods or activities in order to make them
payment of taxes (International Budget Project, more attractive. Tax preferences can be used to
2006). encourage companies to invest in a particular
geographic region or sector of the economy or
Globalisation has made it increasingly difficult in worker training or high-technology equip-
for tax administrations in developing countries to ment. Because tax expenditures shrink the tax
collect taxes from multinational corporations. For base, they reduce revenue collection. A problem
example, the existence of tax havens around the also occurs when a tax break that is intended to
world helps wealthy individuals and multinational change behaviour instead merely rewards people
companies (as well as criminals and corrupt lead- or businesses for actions they would have taken
ers) move their wealth and profits offshore to avoid even without the tax incentive. For example,
paying tax. The Tax Justice Network estimates developing countries frequently offer tax breaks
that governments worldwide lose some $255 to attract foreign investment. Yet research shows
billion in tax revenues each year as a result of tax that companies generally base their investment
havens (International Budget Project, 2006). decisions on factors other than tax policy. As a
result, such tax expenditures reduce revenues
It has been estimated that more than half of all but may do little to influence foreign investment.
world trade is going through tax havens to avoid Also, businesses may exaggerate the potential
taxation. Tax havens play an important role in the economic gains of certain tax breaks—such as tax
worldwide problem of tax avoidance and eva- incentives designed to encourage investment (Tax
sion. Secret bank accounts and offshore trusts Justice NL, 2009).
in tax havens provide companies with the means Foreign direct investments are often viewed as a
to escape their tax obligations. Multinationals’ stimulus for development because of the spread
ability to substantially lower their tax burden by of technological knowledge, newly created
routing capital flows through mailbox companies employment, tax revenues and other economic
in tax havens provides them with unfair competi- advantages. A lot of countries try to attract foreign
tive advantages vis-à-vis their – often smaller – companies by offering favourable tax rates. It also
competitors in developing countries (Tax Justice occurs that countries provide tax exemptions
Network, 2009). Multinational corporations are (such as tax holidays) to attract certain corpora-
particularly competent at avoiding taxes. tions. This has led to increased tax competition
between countries.
Wealthy individuals and businesses tend to benefit
the most from weak tax administration, since they Companies view taxes as costs and use their
owe the most in taxes and are better able to struc- strong negotiation position to convince countries
ture their affairs (or pay bribes) to evade the tax to offer more favourable tax rates. In some cases
system. If the wealthy escape taxation, then other multinationals make countries compete with each
taxpayers, including lower-income people, bear other on decreasing tax rates. Internationally,
more of the burden and the potential for reducing this has lead to lower tax rates for companies;
inequality through the tax system is reduced (Inter- in Europe, statutory corporate tax rates have
national Budget Project, 2006). dropped considerably over the last decades.
The impressive private profits of Nokia come at a high price for the public. The special agreement
between Nokia and the Tamil Nadu state government (India), signed in 2005, ensures the government
will refund VAT on domestic sales to the value of Nokia’s investments in infrastructure. This means it
is actually the state government which is paying for the company’s infrastructure (Citizens’ Research
Collective on SEZ, 2009).

Developing countries also increasingly offer tax considered harmful for society as a whole. For
exemptions to attract investments. instance, a manufacturing plant may emit pol-
lutants that have high environmental and health
Tax competition between countries has negative costs, but that impose little or no monetary cost
consequences for international development and on the manufacturer.
undermines economic development in different
ways. Foreign companies insist on large tax ben-
efits or tax exemptions, which they often receive. Standards
This means that multinationals gain an unfair
tax benefit over local companies. Tax competi- • The Extractive Industries Transparency initia-
tion results in a ‘race to the bottom’ of countries tive (EITI) sets a global standard for trans-
that want to attract investments. Some countries parency in oil, gas and mining. The EITI is a
will try to offer lower taxes than their competi- coalition of governments, companies, civil
tors, while the competing countries will try to do society groups, investors and international
the same. In the long term, this undermines inter- organisations, and a standard for companies
national development. In all, tax competition is a to publish what they pay and for governments
complex problem, because countries are keen to to disclose what they receive. The EITI, in a
attract foreign investments. It is, however, doubt- nutshell, is a globally developed standard that
ful whether tax incentives are the right means to promotes revenue transparency at the local
reach this goal (Tax Justice NL, 2009). level. In its principles, the EITI underlines the
importance of high standards of transparency
Tax exemptions together with lowered tariffs (trade and accountability in public life, govern-
liberalisation) result in limited tax revenues for gov- ment operations and in business; as well of
ernments. This means that less budget is available transparency by governments and companies
for investments in public goods en services, like in the extractive industries and the need to
education, health care and infrastructure. enhance public financial management and
accountability.
Another important aspect is the resource outflow • OECD Convention on Combating Bribery of
in the form of capital flight, tax avoidance and tax Foreign Public Officials in International Busi-
evasion. Developing countries are losing $500bn ness Transactions.
to $800bn in untaxed money that is leaving their
economies unchecked. This flight of capital is up
to 10 times the $78bn that developing countries Existing initiatives
currently receive in aid. By far the biggest leak
is the widespread and pernicious mispricing of • The Tax Justice Network promotes transpar-
exports and imports to shift profits out of the ency in international finance and opposes
country (Kapoor, 2005). secrecy. TJN supports a level playing field on
tax and opposes loopholes and distortions in
Environmental taxes are an example of how taxes tax and regulation, and the abuses that flow
can be used to put a price on activities that are from them. TJN promotes tax compliance
Nokia sells its phones mainly within India but still manages to get these counted towards export.
While some of Nokia’s goods are sold within India, this is still counted towards the company’s
export earnings. With the inclusion of telecom items in foreign exchange earnings, Nokia can sell its
products anywhere, in India and abroad and still count as a Net Foreign Exchange earner for India.
NFE needs to be positive for a Special Economic Zone unit to continue receiving central government
benefits under the SEZ Act (Citizens’ Research Collective on SEZ, 2009).

and opposes tax evasion, tax avoidance, and provide data concerning all company taxes
all the mechanisms that enable owners and (corporate, income, property, etc) and related
controllers of wealth to escape their responsi- penalties paid at the international, national,
bilities to the societies on which they and their and local levels.
wealth depend. Tax havens lie at the centre of
our concerns, and TJN opposes them.
• Tax Justice NL is a network of Dutch civil soci- Recommended steps
ety organisations. The purpose of Tax Justice
NL is to promote a just and fair tax system that • Include ethical corporate tax policies in CSR
is supportive to international development. policies.
The network hopes to influence Dutch politics, • Ensure corporate tax policies include stand-
so that Dutch tax policies will become more ards for tax payments with tax compliance as
coherent with development cooperation. Tax bottom line.
Justice NL was officially launched during the • Avoid profit-shifting mechanisms that are
start conference on the 10th of May 2007. without substantial economic purpose and are
• Publish What You Pay (PWYP) is a global used solely to reduce taxes.
civil society coalition that helps citizens of • Publicly report on tax policies, the countries
resource-rich developing countries hold their where companies operate, the profits derived
governments accountable for the manage- from respective operations, where profits
ment of revenues from the oil, gas and mining are booked for tax purposes; tax payments
industries. Natural resource revenues are an and accounting information – as part of CSR
important source of income for governments reporting. With regards to reporting on pay-
of over 50 developing countries. When proper- ments made to governments, Publish What
ly managed these revenues should serve as a You Pay as well as the Global Reporting Initia-
basis for poverty reduction, economic growth tive provide useful standards.
and development rather than exacerbating • Build enhanced relationship with tax authori-
corruption, conflict and social divisiveness. ties.
PWYP argues for transparency of company • Refrain from bribery and corruption practices.
payments and government revenues as well
as of contracts and licensing procedures.
• The Global Reporting Initiative (GRI) has
developed a widely used sustainability report-
ing framework which sets out the principles
and indicators to measure and report their
economic, environmental, and social perform-
ance. The cornerstone of the framework are
the Sustainability Reporting Guidelines. In the
Economic Indicator Protocols Set (EC) the
meaning of Economic Value Generated and
Distributed (EVG&D) is defined as including
revenues, operating costs, employee compen-
sation, donations and other community invest-
ments, retained earnings, and payments to
capital providers and governments. GRI also
provides detailed Guidance on EVG&D Table
Line Entries (2.2). Where it concerns Payments
to governments (2.2.e.), companies should

Trade and dumping
Issues In the US there is very little regulation of e-waste.

Less than 20 percent of US e-waste is recovered.
In the electronics industry, trading relations are Recycling percentages for PCs (10 percent) and
not necessarily fair and beneficial for all parties TVs (14 percent) are even lower. The 2009 switch
concerned. An unfortunate poignant example of to digital TVs in the US and elsewhere will lead to
twisted relations is the trade in electronic waste. a massive increase in the number of redundant
Electronic waste is routinely exported by devel- analogue TVs. Much of the collected e-waste is
oped countries to developing countries where exported; export of collected e-waste is allowed
laws to protect workers and the environment are in the US.
inadequate, or not enforced. These trade practices
are often in flagrant violation of international law. In Europe, however, export of waste from electrical
and electronic equipment (WEEE) to develop-
The reasons behind the export of e-waste are ing countries is banned according to European
manifold. First, it is cheaper to ‘recycle’ waste legislation (the Waste Shipment Regulation), due
in developing countries; for example the cost to the presence of components that risk damag-
of glass-to-glass recycling of computer moni- ing human health and polluting the environment.
tors in the US is ten times higher than in China Despite this regulation, 75% of European e-waste
(Greenpeace, 2009). It may cost €10 to recycle a is unaccounted for. Of the estimated 8.7 million
computer in Sweden, while it can be taken apart tonnes of e-waste created annually in the EU
by Indian informal waste workers for a mere €1.50 a massive 6.6 million tonnes of e-waste is not
(Swedwatch, 2009). Second, e-waste producing recycled. Presumably, much of this waste will be
countries lack the facilities or know-how to prop- exported (Greenpeace, 2009).
erly dispose of the quantity of hazardous e-waste
that is currently produced. Third, there is a market In 2000 and 2002, China introduced legislation
for waste. Demand in Asia for electronic waste prohibiting the import of e-waste. India has done
started growing when scrap yards found they the same, but this legislation contains many loop-
could extract valuable substances such as copper, holes. Also Indonesia and Vietnam have decided
iron, silicon, nickel and gold, during the recycling to prohibit import of e-waste. However, these laws
process. In other words, there are immense profits do not seem to be effective yet; e-waste is still
to be made by participants in the flourishing toxic arriving at Guiyu of Guangdong Province, the main
trade. A mobile phone, for example, is 19 percent centre of e-waste scrapping in China, as at many
copper and eight percent iron (Greenpeace, 2009). other destinations (Greenpeace, 2009).
Also, regulations are few and poorly enforced.
In 2008, the Dutch Ministry of Transport, Spatial Planning and the Environment (VROM) has carried
out extensive research among 25 European countries into the illegal transport of waste. After analy-
sis of 74 cases of illegal shipments, Waste Electrical and Electronic Equipment (WEEE) comes out
as the most important waste stream (21 cases). The most frequent violations are waste shipped as
product, and contamination (VROM, 2008).

There is a great need for computers and other junk like old screens in the same container from
information technology in many African countries. exporters in developed countries (Carroll, 2008).
These products may help the so-called digital The broken junk and eventually even the working
divide. The export of second hand electronics computers inevitably end up on dumps, as Ghana
equipment may contribute to quenching this need, lacks the infrastructure to safely recycle toxic
by increasing poor people’s access to electronics. e-waste. Some developing countries are trying to
This will furthermore prolong the lifespan of such curb the flow of second-hand goods by requiring
products, which is good from an environmental age-limits for different products.
point of view. It has negative consequences as
well, however, as the final disposal of this stuff will
occur in countries where proper recycling systems Standards
are lacking. Increasingly, brands and retailers in
the US and Europe are held to take-back obsolete • Directive 2002/96/EC of the European Parlia-
electronic products; this does not (yet) apply for ment and of the Council of 27 January 2003
second hand products that end up in developing on waste electrical and electronic equipment
countries. (WEEE).
• The Basel Convention on the Control of
Some exporters of e-waste attempt to cover up Transboundary Movements of Hazardous
their illegal shipments by mis-labelling them as Wastes and their Disposal, adopted on 22
‘products for reuse’ or ‘donations’. It appears March 1989. The Convention was initiated in
that at present Hong Kong, China, Singapore response to numerous international scandals
and Malaysia are the main recipients in Asia. In regarding hazardous waste trafficking that
Africa, Nigeria and Ghana are the main destina- began to occur in the late 1980s. As of 1 Janu-
tions. Countries in the Middle East may receive ary 1998, the Basel Ban decision effectively
shipments or function as transit. Also, trade routes bans all forms of hazardous waste exports
tend to change, as traders try to escape strength- from member countries of the Organization
ened control and the spotlight of the media of Economic Cooperation and Development
(Swedwatch, 2009). (OECD) to all non-OECD countries.
Even well intentioned shipments of computers for

reuse are being abused. In Ghana, for example,
traders report that to get a shipping container with
a few working computers they must accept broken
Globalisation has added another dimension to waste trade and e-waste occupies centre stage of this
trade. Large volumes of e-waste are being traded globally though in many cases illegally, and India
is viewed as one of the most preferred destinations for outsourcing for the reverse manufacturing
process of e-waste. Availability of cheap labour and weak environmental laws are largely responsible
for the proliferation of such illegal trade. Subsequent to the WEEE Directive in the EU and the State
laws in five States of US, India receives large amount of electronic waste for recycling and treat-
ment from these countries. Lack of understanding of national policies on import export and porous
ports at both the points of origin and the final destination also add to the volumes being traded. As
the trade opportunities grow the traders and recyclers resort to newer methods and approaches in
import-export of such materials. It is very unfortunate that the burden of such hazardous processing
is passed on from the most developed world to the most marginalized communities of the develop-
ing countries (Toxics Link, 2007)

• The Basel Action Network is dedicated to

preserving and implementing the Basel Ban
(which is still under attack and needs to be
protected against efforts at sabotage). BAN is
advocating ratification of the Basel Ban, as for
the amendment to enter the force of law it will
need to be ratified by 62 of the Basel Parties.
Recommended steps
• Comply with international and national legisla-

tion or established international standards,
whatever offers the highest environmental
protection.
• Manufacturers and retailers of electronics
equipment should prevent obsolete products
going to recyclers who will export them to
developing countries.
• Set up take-back and recycling systems that
support branded end-of-life product differen-
tiation.
• Aim for high collection and take-back levels
(eg, above 95% of all e-waste generated), at
least of own branded waste.
• Provide free, easy and global take-back and
recycling services for all branded discarded
products, both for business and individual
customers, in every country where products
are sold.
• Contribute to the costs of pre-testing and
labelling of waste exports.
• Support developing countries in curbing the
imports of fake second hand goods by con-
trolling age-limits set in EU harbours.
• Reduce the hazardous content of electronic
equipment.
• Authorities to allocate resources to inspect
electronics shipments at their borders.
• Make consumers aware of the need to respon-
sibly recycle their obsolete electronics.

Marketing and retailing
practices
Issues Obsolete electronics equipment should be pro-

perly recycled. Retailers and brands, as well as
As a principle, companies should operate with consumers, have a responsibility. The concept
honesty in their business affairs, marketing, behind Producer Take-Back or Extended Producer
advertising and their dealings with consumers. Responsibility (EPR) is that if consumers require
Companies are to uphold the safety and quality electronics producers to take financial respon-
of the goods and services they provide. Deci- sibility for the disposal of their old and obsolete
sions made with regards to selling practices on products, these companies have greater incentive
the retail market can increase price pressure on to design toxic-free electronics that are cheaply
competitors, and as a consequence have an and easily recycled. This not only alleviates the
impact on environmental and labour conditions consumer and taxpayer burden, but it potentially
down the supply chain. There is a clear relation diverts millions of pounds of e-waste from being
between retailer pricing, purchasing practices and dumped or burned. Producer Take-Back man-
compliance to labour and environmental standards dates that e-waste is recycled responsibly and
throughout the supply chain. not exported to impoverished countries or sent
to prisons for dismantling. Because of consumer
Increasingly, consumers are interested in sustaina- demand, electronics companies are slowly starting
ble products. Companies and governments are to to facilitate the responsible recycling of their old
create the enabling parameters for such sustain- products. Dell, HP and Apple have take-back
able consumption. policies enabling consumers to send back their
old equipment when they purchase a new product.
Consumer have the right to know the origin of the Informing consumers of such schemes and faci-
products they consume and the way these are litating them to use them, is part of a responsible
produced. This included the sources of compo- marketing and retailing approach.
nents and raw materials. Product information
and labelling are key in this respect. Consumers Not to add even more to the streams of waste,
organisations have been calling upon companies smart packaging is required.
to provide consumers with transparent and com-
prehensible information.
The mobile network operators’ position in the supply chain of mobile communication products is
particularly crucial since they are an important retail channel of mobile phones for consumers. It is
common practice for mobile network operators to offer customers a “free” new mobile phone when
they sign up for a new subscription, or renew their subscription. Evidently, this type of marketing
has an enormous impact on the amount of mobile phones that are circulating on the market, as well
as on the mobile phone production processes, and the mounting volumes of e-waste. Because the
network operators are an important retail channel, even though their core business is the sale of
services (ie the use of mobile network technology) instead of products (ie mobile phones), they have
the unique opportunity to influence CSR policies and practices throughout the mobile phone supply
chain, without harming their own sales of services. (makeITfair, 2009).

Connected to the irresponsible handling of elec- e-waste dumped in landfills or incinerators,
tronic waste, there is also the issue of privacy of exported to developing countries, or sent to
information. When discarded computers and other prison labour operations and no release of
electronic equipment are not carefully disposed private data.
off, intimate details of people’s lives like pictures • The Electronics TakeBack Coalition (ETBC)
and files left behind by the original owners on the promotes green design and responsible recy-
hard disk drive, for example, as well as priva- cling in the electronics industry. ETBC’s goal
te financial data such as account information, is to protect the health and well being of elec-
records of online transactions, credit card num- tronics users, workers, and the communities
bers etc. can be retrieved. It is not just individuals where electronics are produced and discarded
who are exposed, but also companies, public ins- by requiring consumer electronics manufac-
titutions, governments etc. At the moment, elec- turers and brand owners to take full respon-
tronics waste is shipped and dumped to a number sibility for the life cycle of their products,
of places that are not offering a particularly secure through effective public policy requirements or
environment for safe handling of waste. Ghana, for enforceable agreements.
example, is listed by the U.S. State Department as • Consumers International (CI) is a global
one of the top source of cyber crime in the world. campaigning voice for consumers. With over
Worldwide the risk of identity theft is increasing. 220 member organisations in 115 countries, CI
Consumers have the right to be protected against is building a powerful international consumer
such risks. movement to help protect and empower
consumers everywhere. In the series ‘The real
deal. Exposing unethical behaviour.’, CI has
Standards published a number of reports, informing con-
sumers of labour and environmental issues in
The UN Guidelines for Consumer Protection 1999 the global electronics supply chain.
cover eight basic principles: • Ethiscore is the consumer interface of the Ethi-
cal Consumer Research Association (ECRA).
• the right to access necessary goods and ECRA was founded in 1988 as a not-for-profit
services; workers’ co-operative to ‘provide information
• right to safety; on the companies behind the brand names
• right to information; and to promote the ethical use of consumer
• right to choice; power.’ ECRA is encouraging purchasers to
• right to be heard; take environmental and social issues into
• to appeal and lodge a compliant; account in the market place.
• consumer education;
• promotion of sustainable consumption;
patterns. Recommended steps
• Set retail prices in a responsible manner;

Existing initiatives refrain from stunting and selling products at
below-cost retail prices.
• The Basel Action Network initiated e-Stewards • Brand companies to forbid retailers stunting
recyclers are a group of leading North Ameri- with their products.
can electronics recyclers and asset managers • Refrain from advertising that creates consum-
who have been qualified as upholding the er expectations of unsustainably low prices
highest standard of environmental and social (Clean Clothes campaign, 2009).
responsibility. The criteria include no toxic • Facilitate responsible consumption (ie, less

consumption), eg, refrain from offering irresist-
ible short term mobile network subscription
packages with cheap or free products.
• Provide consumers with reliable informa-
tion about the origin and the production of
electronic equipment, including sources of
components and raw materials.
• Inform consumers on the global amount of
recycled e-waste as a percentage of past
sales by product type (Greenpeace, 2009).
• Minimise on packaging material and offer elec-
tronic equipment in recycled and recyclable
packaging material
• Retailers to link up to responsible recyclers
who meet the highest standards in electronics
recycling.
• Set up or reliable free and easy take-back
systems for all electronic equipment in all
countries where products are sold.
• Publish clear information on what individual
consumers can do with e-waste and make
it accessible to customers in every country
where products are sold.
• Brands and retailers to ensure their respective
codes of conduct correspond on these points.

Public procurement
Issues rudimentary stage. Public institutions can make

a positive contribution to improved working
Public institutions are an important customer conditions in the production chain of electronics
of electronic products, ranging from computers products by using their buying power. To do so,
to communication equipment, including mobile labour conditions should also be made a factor
phones. As such, public institutions including local when purchasing electronic products. Increasingly,
administrations, universities, libraries etc, have a governments are taking steps towards enabling
critical market share that can influence develop- sustainable public procurement.
ments towards social and ecological goals in the
electronics sector. Or, in other words, irresponsible
procurement practices in public institutions are Standards
reinforcing the trend towards low priced products
at any cost, putting unreasonable pressure on • Directive 2004/18/EC of the European Parlia-
wages, working days and lead times in supply ment and of the Council on the coordination
chains. The challenge is how to integrate envi- of procedures for the award of public works
ronmental and social considerations into public contracts, public supply contracts and public
procurement procedures. Tendering procedures service contracts.
typically look for the cheapest offer, leaving social • Directive 2004/17/EC of the European Parlia-
and environmental criteria behind. The inclusion of ment and of the Council of 31 March 2004
environmental criteria in public tenders, or green coordinating the procurement procedures of
public procurement, has grown somewhat in use entities operating in the water, energy, trans-
over the past years. Many goods come with labels port and postal services sectors.
certifying their environmental standards. There are
public databases where suppliers offer information
about themselves and their products. Nonethe- Existing initiatives
less, generally speaking managers and profession-
als are still largely ignorant of ‘green IT’, as shows • Procure IT Fair is a coalition of NGOs from
a regularly updated assessment among business various European countries that intends to
and administration professionals in the Nether- raise awareness on the working conditions
lands (Ernst&Young, 2009). and environmental pollution created by the
production of computers. ProcureITfair asks
The insertion of social considerations in tenders politicians and public purchasers to use their
for electronics equipment is in an even more (buying) powers to demand compliance with
In 2008, the Swiss city of Zurich issued a call for tender for a framework contract for computer hard-
ware. For this contract, the ILO labour standards were included in both the award criteria and the
contract clauses. The sustainability criteria were given a prominent place among the award criteria,
with a weight of 18%. The framework contract required tendering companies to adhere to the ILO
labour standards, under penalty of a fine or annihilation of the contract.

international labour rights and ecological human rights violations or environmental
standards in the global supply chain of com- offences should be excluded from the tender-
puters. ProcureITfair has elaborated Criteria ing process. This should also apply when the
for sustainable procurement of IT products. violations occur within the supply chain.
• Procura+ is an initiative by ICLEI (local govern- • Inquire at the bidder about the origin of metals
ments for sustainability) designed to help used in electronic products, and to set stand-
support public authorities in implementing ards concerning sustainable sourcing.
Sustainable Procurement – and help promote • Take precautions to ensure that the purchas-
their achievements. ing of electronics equipment does not lead to
• The United Nations Environment Programme unreasonable pressure on working hours and
(UNEP) has published Sustainable Procure- wages, by establishing reasonable prices and
ment Guidelines for Office IT Equipment. lead times.
• EPEAT is a system that helps purchasers • Ensure sustainable repair, reuse or recycling
evaluate, compare and select electronic prod- of electronic equipment, after a maximum
ucts based on their environmental attributes. lifespan.
The system currently covers desktop and • Make sure redundant equipment does not end
laptop computers, thin clients, workstations up as illegally exported electronic waste to
and computer monitors. developing countries by working with reliable
• The European Commission has set a politi- take-back systems.
cal target of 50% Green Public Procurement
(GPP) to be reached by the Member States
by the year 2010. The target is linked to a
process for setting common -voluntary- green
public procurement criteria, recommended for
inclusion in tender documents for a series of
priority product and service groups, including
IT office equipment and mobile phones (under
development).
• The Dutch government has decided to include
sustainability as an important criterion for the
public procurement of products and services
by 2010.
• In Austria, ILO standards are included in
national procurement law.
Recommended steps
• Take into consideration the environmental and

labour conditions in the entire supply chain of
electronic equipment.
• Require tendering companies to provide full
transparency regarding their supply chains;
• Avoid purchasing electronic equipment from
companies that violate human rights, labour
or environmental standards. Suppliers whose
production processes are known to involve

Part 5.
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30949/3934883/3935096/home.html?nodeid=4451259&vernum=0
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• Ivanou, Alex. “Three types of employees hired in Batam’s EPZs.” October 2008.
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• Joint Initiative on Corporate Accountability and Workers’ Rights (JO-IN). Draft Code of Labour Practice.
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• Joint Initiative for Corporate Accountability and Workers’ Rights (JO-IN). Codes and compliance under scru-
tiny. A Final Report of the JO-IN Turkey Project. June 2008.
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• Ladou, Joseph and Bailar, John C.. “Cancer and Reproductive Risks in the Semiconductor Industry” Journal
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Its Human Health Implications in Southeast China” Environmental Science and Technology 42 (7). March
2008: 2674–2680.
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for their supply chain. September 2009.
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• makeITfair. List of principles on the extractives phase of the electronics supply chain, March 2008.
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• Mines and Communities. The London Mining Declaration. October 2008.

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• MVO Platform. CSR Frame of Reference. June 2007.

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• Nike. Code leadership Standards. 2009.

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• New England Lead-free Electronics Consortium. Fact Sheet Getting the Lead Out of Electronics. 2009.
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• Resource Consulting Service. Trading Conflict for Development. Utilising the Trade in Minerals from Eastern
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rights and transnational corporations and other business enterprises. April 2009: 18.
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• Ruggie, John. Promotion of all human rights, civil, political, economic, social and cultural rights, including
the rights to development. Clarifying the Concepts of “Sphere of influence” and
“Complicity” Report of the Special Representative of the Secretary-General on the Issue of Human Rights
and Transnational Corporations and other Business Enterprises. May 2008.
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• Ruggie, John. Portal. http://www.business-humanrights.org/SpecialRepPortal/Home
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• SOMO. Computer connections. Supply chain policies and practices of seven computer companies.
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the Philippines. July 2009. http://somo.nl/publications-en/Publication_3109/at_download/fullfile
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May 2008. http://www.stopchildlabour.eu/stopchildlabour/content/download/463/2983/file/New%20
Action%20Plan%20for%20Companies%20Against%20Child%20Labour.pdf
• Swedwatch. Out of Control: E-waste trade flows from the EU to developing countries. April 2009. http://
makeitfair.org/the-facts/reports/out-of-control/at_download/file
• Tax Justice NL. Tax avoidance and tax havens. http://www.taxjustice.nl/?nid=63000
• Tax Justice NL. Tax competition. http://www.taxjustice.nl/?nid=64000

• Tax Justice Network. Tax havens cause poverty. http://www.taxjustice.net/cms/front_content.php?idcat=2
• TCO. Our certification overview for IT-equipment. http://www.tcodevelopment.com/
• Tenaganita. “Employers should NEVER be allowed to recover the levy paid from wages of worker.”
May 2009. http://www.tenaganita.net/index.php?option=com_content&task=view&id=295&Itemid=68
• Toxics Link. Sinha, Satish. “Downside of the Digital Revolution.” Toxics Link. December 2007.
http://www.toxicslink.org/art-view.php?id=124
• Traidcraft. A Fair Cup: towards better tea buying. 2008.
http://www.responsible-purchasing.org/downloads/AFairCup.pdf
• UNEP. Rio Declaration on Environment and Development. 1992.

http://www.unep.org/Documents.multilingual/Default.asp?DocumentID=78&ArticleID=1163
• UNEP. Sustainable Procurement Guidelines for Office IT Equipment. May 2008.

http://www.unep.fr/scp/sun/guidelines/ict/SP%20guidelines%20office%20IT%20-%20Product%20
Sheet%20-%20final.pdf
• UNHCHR. Committee on Migrant Workers. Frequently Asked Questions. 2009.

http://www2.ohchr.org/english/bodies/cmw/faqs.htm
• VROM, the Dutch Ministry of Transport, Spatial Planning and the Environment. Learning by doing. Enforce-
ment of EU Waste Shipment Regulation. June 2008. http://www.vrom.nl/docs/IMPEL-TFS.pdf
A publication that deserves particular mention is:
• Challenging the chip - Labor Rights and Environmental Justice in the Global Electronics Industry Eds. T.
Smith, D.A. Sonnenfeld, D. Naguib-Pellow, L.A. Byster , Temple University Press, 2006.

Reset: Corporate Social Responsibility in The Global Electronics Supply Chain

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Corporate social responsibility in the global electronics supply chain

GoodElectronics and the Dutch CSR Platform are hosted by SOMO

CSR Platform (MVO Platform)

Part 2. Social aspects 19

Part 3. Environmental aspects 55

Part 4. Economic aspects 65

Among the most pressing issues is the lack of

8 Reset. Corporate social responsibility in the global electronics supply chain

10 Reset. Corporate social responsibility in the global electronics supply chain

12 Reset. Corporate social responsibility in the global electronics supply chain

Electronics companies have been pressured to Adopting a multi-stakeholder approach is an

14 Reset. Corporate social responsibility in the global electronics supply chain

16 Reset. Corporate social responsibility in the global electronics supply chain

In-factory workers education Companies should facilitate workplace dialogue

Critical elements of an MSIR approach are the

18 Reset. Corporate social responsibility in the global electronics supply chain

20 Reset. Corporate social responsibility in the global electronics supply chain

Issues their households, the elderly, and even in their

22 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 23

• Comply with all applicable laws, nationally and

24 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 25

26 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 27

Issues Moreover, the arrival of well-resourced companies

28 Reset. Corporate social responsibility in the global electronics supply chain

• Mines and Communities exposes the social,

Part 2. Social aspects 29

Issues It is also one of the most difficult human rights

30 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 31

Issues • Migrant workers are particularly vulnerable to

32 Reset. Corporate social responsibility in the global electronics supply chain

Business responses to the issue

Initial lessons from the issue

Part 2. Social aspects 33

Standards the policy applies to all entities involved in a

34 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 35

36 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 37

Issues the world continue to be subject to discrimination.

A very specific form of discrimination concerns caste-based discrimination. Caste-based discrimina-

38 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 39

Issues • disguised employment training contracts;

40 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 41

Issues dangerous group of chemicals in the electronics

42 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 43

44 Reset. Corporate social responsibility in the global electronics supply chain

Part 2. Social aspects 45

Issues workers in a poverty trap. Under these conditions,

46 Reset. Corporate social responsibility in the global electronics supply chain

• ILO Observance of maximum number of work-

• Comply with all applicable laws, international

Part 2. Social aspects 47

Issues workers in global supply chains, even in the first

48 Reset. Corporate social responsibility in the global electronics supply chain