What We Can Learn From the Foxconn Factory Audit

Bruce Klafter
April 2, 2012
As most of us know by now, in February 2012, the Fair Labor Association (FLA), a multi-stakeholder organization focused upon workers' rights, inspected three large factories in China, where Foxconn assembles products on behalf of one of our country's most iconic brand manufacturer. The report that was issued is interesting reading and offers some lessons that any business would be wise to learn and apply:

Listen to your workers: In the health and safety area, the FLA found that workers were alienated from safety and health committees, and had little confidence that management would address safety issues. Keeping in mind that the scale in this case is unprecedented (i.e. FLA surveyed 35,000 employees out of the 179,000 working at these three locations!) the challenge of uncovering EHS issues is one that EHS professionals and management confront all the time. It is virtually impossible to identify issues without the assistance of line workers, and workers will report issues only if they believe there will be no retaliation and that corrective action will follow. In this instance, Foxconn has agreed to assure the election of worker representatives without management interference, something that was lacking and that prevented open communication about EHS issues.

Compliance can be hard, but the alternatives are generally worse: The principal problem that precipitated these audits and that FLA confirmed was widespread at Foxconn is noncompliance with Chinese law and voluntary code prescriptions for hours worked. Chinese law limits work to 40 hours per work and 36 hours of overtime a month, meaning a workweek should generally be no more than 49 hours. Foxconn workers were found to regularly work 60 hours a week or more. The causes of excessive working hours are manifold, including a desire on the part of workers to get as much overtime and compensation as possible, and the solutions are going to be extraordinarily difficult. Foxconn has pledged to comply with the law and to maintain compensation for its workforce, necessitating the hiring of tens of thousands of new workers. Given the amount of bad press this situation has created for the company, it is no wonder that many are calling this a "Nike moment," meaning the moment where it has been forced to meaningfully confront poor working conditions in its supply chain. This company was by no means sitting idly by while these violations persisted, but it was unable to devise a solution even with knowledge of its existence — an alarming state of affairs for any manager. The kinds of issues disclosed by the FLA report are unfortunately endemic in China and other parts of the world, and are by no means confined to any one company, or even to the electronics industry. Hopefully the attention generated by the situation will create some positive momentum for lasting change.

What do you think about the potential impact of this situation? Has it provided an opportunity for renewed conversation about EHS in your company?


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About the Author

Bruce Klafter
Bruce Klafter is Vice President of Corporate Social and Environmental Responsibility at Flextronics International, where he provides leadership and strategic guidance for the company's global operations. Prior to assuming this role, Mr. Klafter directed Applied Material's EHS and sustainability programs and began his career as a distinguished environmental and natural resources lawyer.

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