Electronics Industry Trends 19th May 2014 Authors: Gershon Nimbalker, Claire Cremen, Yolande Kyngdon & Haley Wrinkle Design: Elin Eriksson, Dwight Gilberg, Tim Park, Fiona Russell & Haley Wrinkle Organizations: Not For Sale & Baptist World Aid Australia Produced with Support From: International Labor Rights Forum THE TRUTH BEHIND THE BARCODE: Visit www.behindthebarcode.org.au to nd out more. www.notforsalecampaign.org/australia International Labor Rights Forum advises the Free2Work program. We would like to thank ILRF for its contributions to this report. Electronics Industry Trends report was funded in part by a grant from the United States Department of State. The opinions, ndings, and conclusions stated herein are those of the author and do not necessarily reect those of the United States Department of State. Research contained in this report was completed over a period of eighteen months to February 2014. Published 19th May 2014 Introduction | Exploitation and Slavery in Electronics More than ever before, the world is asking questions about the people making our electronics and the conditions under which they work. Interest has been spurred on by the ascendency of global brands like Apple, Microsoft and Samsung, combined with growing public concern about exploitation and child labor in Chinese electronics factories, as well as fears about the use of conict minerals sourced from the Democratic Republic of Congo (DRC). This report seeks to shed light on these concerns by examining the eforts of thirty-nine widely-recognised electronics brands to address exploitation and forced labor within their supply chains. It is the second in a series of industry-focused reports; the rst focused on the apparel industry. Product supply chains are particularly susceptible to the presence of slavery and exploitation when little or no responsibility is taken by companies to protect worker rights upstream in the supply chain. On these grounds, this report grades companies across four categories of their Corporate Social Responsibility (CSR) practices: policies; traceability and transparency; monitoring and training, and worker rights. Our research nds that the electronics industry has substantial room for improvement as the highest grade awarded was B+ and the median received was C-. The sectors greatest strength is the early steps it has taken toward knowing who makes its products (traceability). Almost half of all the companies we assessed have traced the majority of suppliers responsible for their nal stage of manufacturing, and a quarter have done the same for their components manufacturing. Many brands have also begun to locate their smelters to ensure the minerals they use have not originated from the civil war-ravaged Democratic Republic of the Congo. However, the research shows a clear trend that insufcient eforts have been undertaken to uphold worker rights, and in particular to ensure workers are paid a living wage. Of the companies assessed, only Nokia was able to provide sufcient evidence that its worker rights policies had translated into increased wages. This is of particular concern given that payment of a living wage is among the most persistent issues raised by workers in developing countries and one of the most dependable measures of improved worker well-being. We encourage electronics companies to take further steps to trace their supply chains, monitor them efectively against the use of child and forced labour and, most importantly, begin publicly reporting the impact of their CSR policies, in particular, the wage gains of their workers. Further, we urge the industry to solidify these commitments by creating legally binding and enforceable agreements with workers. Examples from the apparel industry include the Accord on Fire and Building Safety in Bangladesh and the Freedom of Association Protocol in Indonesia. Electronics companies have great potential to bring substantial benets to the countries in which they operate. For developing countries, the investment, technology, job opportunities, skills and tax revenues that accompany their operations can be critical in helping their citizens overcome poverty. However, without adequate safeguards many of these benets will not fully materialise and workers may be exploited or even enslaved. This report provides an overview of key labour rights issues afecting the electronics sector, alongside in-depth company proles and snapshots of good company practices. The report is a tool for consumers who may wish to vote with their wallets and advocate for better business practices. It is a tool for companies to assess their performance and compare their strengths and weaknesses with those of their peers. It is also a tool for policy makers to understand where greater governmental oversight is needed. 1 Company Performance While no company earned an A grade in this report, B+ grades were awarded to Nokia, LG, Microsoft and Apple. Apples inclusion in the top tier may come as a surprise given the public attention it has received for poor working conditions and child labour at Chinese suppliers like Foxconn and Pegatron. In fact, Apple itself reported nding eight facilities using child labour in 2014. This context should provide the reader with some understanding of the degree to which we graded companies on a curve. A number of large companies were in the B category, not because their supply chains are free of abuse, but because they were doing relatively more to proactively address these issues. These companies trace and efectively monitor a good portion of their supply chain, with a few going further to implement grievance mechanisms and policies to remediate child labour. Overall company grades are listed to the right. Introduction | Exploitation and Slavery in Electronics 2 B C D F Companies that guarantee above local minimum wage Compare Grades to Wage Impact: ONE PARTIAL Nokia Acer Apple Dell Hewlett-Packard Intel LG Electronics Microsoft Motorola Mobility Motorola Solutions Panasonic Samsung Toshiba Blackberry Garmin Hitachi IBM Olympus Philips SanDisk Sharp Sony TomTom Woolworths Australia Amazon Kindle Asus Canon Dick Smith Electronics Fujitsu HTC Huawei Kogan Lenovo Nintendo Oracle Soniq TEAC Hisense Palsonic Introduction | Living Wage & Collective Bargaining 3 Living Wage Naturally, wages are one of the chief concerns of workers. Although our research grades companies on their overall labour rights management systems, it is worth specically highlighting their wage practices. Almost every company with an ethical sourcing policy requires the payment of either a legal minimum wage or an industry standard wage, which often amounts to the same thing. However, the legal minimum wage in many developing countries is not sufcient for a worker and their dependents to meet their basic living needs. Legal minimum wages may keep workers and their families in poverty or force them into working excessive overtime to make ends meet. We believe that one of the most demonstrable diferences a company can make to the welfare of their workers is through the payment of a living wage. This is a wage high enough to ensure that workers can meet basic needs (food, water, shelter, clothing, energy, transport, education and health care) for themselves and their families, with a small amount left over for discretionary spending or savings in case of an emergency. Of the 39 companies analysed only Nokia was able to provide sufcient evidence to demonstrate that workers were receiving amounts above the legal minimum. It is worth noting that both Microsoft and Samsung also claim to pay above minimum wages, however at the time of publishing we had not received sufcient documentary evidence to verify this. This wage deprivation is compounded by the fact that only 31% of companies uphold the right of supply chain workers to engage in collective bargaining. Worse still, Nokia was the only company able to sufciently identify factories where collective bargaining arrangements existed. The International Labour Organization has found that in countries with high rates of collective action in the workplace (>30%), wage increases correlate more closely with economic growth compared to countries with low levels of collective action. [1] In other words, workers on the aggregate earn more when they are unied and thus structurally capable of engaging in collective bargaining. It is important that collective bargaining is recognised as a distinctly protected right. Our research indicates that, with perhaps the single exception of Nokia, few brands are taking sufcient action towards recognising workers rights to freedom of association and collective bargaining. Finally, we accept that it is extremely difcult to directly measure the extent of child or forced labour in a supply chain as it is so often hidden. However, we do know that where workers are treated fairly (where they can speak out about their conditions and receive adequate pay) modern Payment of a living wage Partial Nokia receives partial credit for demonstrating that some suppliers at the nal assembly stage pay workers a living wage slavery is far less likely to occur. Advocating for living wages within the supply chain and promoting the rights of workers to engage in collective action, while benecial in their own right, are also signicant measures to reduce the risk of slavery. Sources: [1] International Labour Organization, Global Wage Report 2008-09 p.41, http://www.ilo.org/wcmsp5/ groups/public/---dgreports/---dcomm/documents/publication wcms_100786.pdf Introduction | Living Wage & Collective Bargaining This chapter provides an overview of how we graded companies. 1 Methodology Methodology | How We Grade Companies Our assessment system gives companies and supply chains A to F grades on their eforts to guard against the use of child and forced labour and worker exploitation in production. Assessments are based on publicly available information and data self-reported by the company. Companies that did not respond substantively to our enquiries and have not provided data are marked with an asterisk (*). We contacted each company multiple times before recording a non-substantive response. A few companies responded but chose not to disclose any additional data. These are also marked with an asterisk. The supply chain of an average electronic product has many diferent stages. At the raw materials level, electronics contain dozens of minerals that have been extracted from the ground in every continent except Antarctica. These minerals are traded several times before being smelted and rened, a process that amalgamates minerals from a multiple of diferent locations. Next, the rened minerals enter the global market where they are typically traded again, and then purchased by component manufacturers. These manufacturers number in the tens of thousands, and predominantly operate in Asia; particularly in China, Japan, South Korea, Taiwan, Thailand, the Philippines and Singapore. Then, the components are incorporated into a myriad of diferent branded products which are nally sold to consumers across the globe. In this study we focused on companies interaction with three key stages: raw materials (mineral extraction), inputs (smelting and rening and/or component manufacturing), and nal manufacturing. This is a simplied supply chain that generally reects the complicated supply chain dynamics of the brands analysed. There can, for example, be considerable overlap between the stages. 5 We looked at three key electronics supply chain production phases: FINAL MANUFACTURING SMELTING & REFINING and/or COMPONENTS MANUFACTURING EXTRACTION We give companies A-F grades for eforts to address slavery. We evaluated 39 major electronics brands. To evaluate a company, we asked a set of 61 questions about its production policies and practices. The questions addressed the companys management of mineral extraction, smelting and rening, and nal manufacturing, and fall into four categories: 6 Methodology | How We Grade Companies At each supply chain level, we assessed the companies management systems in four categories: Policies We evaluated the brands code of conduct, sourcing and subcontracting policies, and involvement with other organisations working to combat child and forced labour. Traceability & Transparency We looked at how thoroughly the brand understands its own supply chain, and whether it discloses critical information to the public. Monitoring & Training We measured the adequacy of the brands monitoring program to address the specic issues of child and forced labour. Worker Rights We assessed the degree to which the brand supports worker well-being by ensuring that workers are able to claim their rights at work through collective bargaining or worker owned cooperatives, and whether workers earn a living wage. When conducting a brand evaluation, our research team rst assessed a brands own publications alongside relevant independent reports and data such as third party audit ndings and non-governmental organisation (NGO) publications. Next, we sent our questionnaire for information and comment directly to the company. Where they responded, we reviewed the evaluation again. We allot six to eight weeks for this process. Our grades take into account the prevalence of child and forced labour in the countries where the selected companies operate. Where companies source from suppliers in low risk areas, they are graded on a softer curve because it is expected that less stringent management systems are necessary to combat abuse in these regions, particularly where a strong national rule of law exists. It is important to note that due to the lack of access to on-the-ground information, we have gathered data on CSR systems and not on the actual working conditions they are designed to ameliorate. High grades do not necessarily represent supply chains free of child and forced labour or worker exploitation, but instead represent those that are better managed on a relative basis. Our grades are only an indication of the extent to which companies have developed a set of management systems that theoretically prevent abuses. As the Clean Clothes Campaign has stressed, the components of a CSR system will likely only create positive impact if used in conjunction with one another. [1] For example, a company can have strong written policies against modern slavery and gather information about supplier working conditions through in-depth monitoring, but unless it uses these standards and information to correct grievances, we would not expect it to create much impact on actual working conditions. The category grades represent the health of sections of a system rather than the system as a whole, and should be evaluated within this broader context. This chapter provides a geographical overview of where child and forced labour are used in electronics production today. We use this information to understand companies specic supply chain risks. 2 The Problem: Child & Forced Labour Electronics Industry Methodology | How We Grade Companies Our assessments rank companies for their relative eforts. It is our hope that in the future, better standard practices will enable us to grade companies on a more rigorous curve. For more information on our risk assessments and broader methodology, see www.free2work.org Sources: [1] Clean Clothes Campaign, Looking for a Quick Fix: How Weak Social Auditing is Keeping Workers in Sweatshops, p.77, 1 November 2005 http://archive.cleanclothes.org/ documents/05-quick_x.pdf Children and forced labourers can be found working at multiple stages of todays electronics supply chains. In this section (pages 8-11), we explore specic instances of modern slavery in the manufacturing and extractives sectors. We give an overall picture of the documented cases of child and forced labour through a series of maps, and provide country spotlights for a specic look at selected issues. Child and Forced Labour in Electronics and Component Manufacturing Child and slave labour is not limited to the extractive stage of the electronics supply chain. The component and nal production stages are also home to these abuses. Components manufacturing is the point at which the parts for electronics products are created. This includes items such as cables, hard disk drives and circuit boards. Components consist of various materials, including minerals, plastics and a variety of petroleum-based substances. The nal production stage is manufacturing where electronic goods are assembled and nished prior to sale. In recent years, these stages of the electronics supply chain have received media attention due to the discovery of child and slave labour practices by various manufacturing suppliers. The following pages highlight a few key examples. Child and Forced Labour in Minerals Extraction The use of modern slavery is particularly prevalent in the extractives sector. Minerals that are often present in electronics such as gold, bauxite, halite, tin, tantalum, tungsten and lithium have been mined by either large mining companies exclusively, or by a combination of large mining companies and small independent producers known as Artisanal and Small-scale Miners (ASM). The ASM sector employs between 13-20 million people worldwide, predominantly in developing states, and is known to be highly vulnerable to the presence of child and forced labour as well as other forms of worker exploitation. [1] The poverty and informal work status common to ASM workers leave many susceptible to enslavement. Impoverished, illegal miners are unattractive formal loan candidates. These miners regularly borrow money from local loan sharks or sponsors who oversee their mining operations and take a percentage of their income. As a direct result of these agreements, workers in the ASM sector can end up in indebted servitude, or debt bondage, a form of modern slavery. Research shows the ASM sector is also the most likely group of producers in the extractives industry to contain child labour. Children working in ASM sufer long-term physical and mental harm on account of their consequent exclusion from school, the arduous nature of the jobs they perform, and the dangerous substances they are regularly exposed to in the mining environment. [2]
After minerals are extracted from the ground, they are traded and then smelted and rened. In the smelting and rening process minerals are isolated from their ores and puried. The smelting and rening process is particularly signicant to the tracing or tracking of electronics supply chains. Smelting and rening amalgamates minerals from many diferent sources, and often combines minerals produced with child and slave labour with those that do not possess such a history. The ability to denitively trace the origins of minerals and determine the manner in which they were produced is, as a result, greatly complicated. This stage of the supply chain is also crucial for tracing the origin of minerals, and so the electronics industrys eforts towards tracing the source of minerals by tracing smelters is encouraging. In the Traceability and Transparency section of this report (page 18) we look at initiatives that aim to increase the transparency surrounding smelters and reners and preserve the origins of certain minerals. Sources: [1] Abbi Buxton, Responding to the challenge of artisanal and small-scale mining. How can knowledge networks help? p.1, 2013, IIED http://pubs.iied.org/pdfs/16532IIED.pdf? [2] Mining, Minerals and Sustainable Development, Global Report on Artisanal & Small Scale Mining p.24, 2002 http://pubs.iied.org/pdfs/G00723.pdf Child & Forced Labour in Electronics Supply Chains | Overview 8 Child & Forced Labour | in Electronics & Component Manufacturing Spotlight: China Chinas electronics manufacturing sector is home to both child and forced labour. A number of NGOs and even the companies themselves have documented cases of abuse. For example, in 2012 China Labor Watch, a human rights advocacy NGO, released a report on the labour practices of HEG Electronics Co. Ltd., an electronics processing company and major Samsung supplier. They found that HEG regularly employed children under the age of 14 in its factories. While most electronics companies do not report specic statistics on the existence of modern slavery in manufacturing facilities, Apple made a move toward transparency in this area in 2012 following press attention decrying its supply chain conditions. The companys ndings reveal something about the extent of the problem in the industry as a whole: in 2014 Apple reported that of the 451 facilities it audited, a total of eight supplier facilities used bonded labour and 11 facilities used child labour. Sources: China Labor Watch: Samsung Factory Exploiting Child Labor - Investigative Report on HEG Electronics (Huizhou) Co., Ltd Samsung Supplier, 2012 http://chinalaborwatch.les.wordpress.com/2012/08/samsung8-271.pdf Apple Supplier Responsibility 2014 Progress Report http://images.apple.com/ supplier-responsibility/pdf/Apple_SR_2014_Progress_Report.pdf China is the global leader in electronics manufacturing. Under-age children and forced labourers continue to be found working in export factories in China today, according to the US Department of State. 9 Where is Child and Forced Labour Used? KEY: Countries known to use child and/or forced labour in electronics manufacturing (Source: DOL List of Goods Produced by Child Labor or Forced Labor, 2011) CHINA Child & Forced Labour | in Minerals Extraction Many of the devices we buy contain minerals extracted by people held in modern slavery. Below is a map of the top countries that extract seven main minerals (see key) found in electronics. The map on the next page shows where child and forced labour is used to extract these minerals. 10 Where does mineral extraction take place? Every country in Africa with an ASM sector is home to child labour as the two practices go virtually hand in hand. Gold mining regularly exposes ASM workers, including child labourers, to the elements arsenic and mercury. These chemicals can cause serious harm and can be fatal in high doses. In the gold mines of Mali up to 40,000 children mined this metal during 2011. It was regularly purchased by large trading rms residing in Switzerland and Dubai. Spotlight: Mali MEXICO ARGENTINA BRAZIL CUBA CTE DIVOIRE USA CANADA PERU RWANDA ETHIOPIA INDIA INDONESIA VIETNAM CHINA MALAYSIA AUSTRALIA SOUTH AFRICA MADAGASCAR GHANA MOROCCO BOLIVIA SPAIN SWITZERLAND ZAMBIA DR CONGO UKRAINE IRAN KAZAKHSTAN RUSSIA NEW CALEDONIA KEY: Coloured triangles represent countries that lead the world in the extraction of specic minerals (Source: FAOSTAT, 2011; British Geological Survey: World Mineral Production, 2007-2011) Gold Tin Cobalt Iron Tungsten Copper Tantalum In 2008, a Bloomberg investigative report examined the prevalence of child labour within copper and cobalt mines in the Katanga province of the DRC. Copper is commonly used in the manufacture of electronic components, while cobalt is a key element of electrical devices. The reporter discovered that thousands of children worked in the mines, often in structurally dangerous conditions. Some children have died as a result of the work they were performing. The copper and cobalt mined by child labourers was purchased by nearby foreign-owned smelting plants, before being sold on to the world market. These rened minerals were eventually traced to the suppliers of some of the worlds largest electronics brands. These examples illustrate the extreme hardships endured by child labourers in the ASM sector. They also show the ease with which minerals mined by children can enter the market, and the supply chains of some of the electronics brands analysed in this report. Spotlight: Democratic Republic of the Congo Sources: Human Rights Watch, A Poisonous Mix: Child Labour, Mercury and Artisanal Gold Mining in Mali, December 2011 http://www.hrw.org/reports/2011/12/06/poisonous-mix Simon Clark, Michael Smith and Franz Wild, Child Workers Die Digging in Congo Mines for Copper Bloomberg, 22 July 2008 http://www. bloomberg.com/apps/news?pid=newsarchive&sid=aW8xVLQ4Xhr8 11 Where is child and forced labour used in mineral extraction? KEY: Red represents countries known to use child and/or forced labour in the extraction of one or more minerals (Source: DOL List of Goods Produced by Child Labor or Forced Labor, 2011) COLOMBIA GUINEA SURINAME SENEGAL NICARAGUA ECUADOR BOLIVIA PERU D R CONGO TANZANIA ETHIOPIA INDONESIA MALI BURKINA FASO GHANA NIGER MONGOLIA NORTH KOREA PHILIPPINES Child & Forced Labour | in Minerals Extraction 3 Company Performance: Overview Electronics Industry F D C B A Company Performance: Overview Blackberry Dell Fujitsu Hitachi Ltd HTC* IBM* Amazon Kindle* Asus* Canon* Garmin Huawei* Hisense* Kogan* Palsonic* Soniq* Intel* Lenovo* Oracle* Philips Toshiba Nintendo Panasonic SanDisk* Sharp* TEAC* Acer Apple Dick Smith Electronics* Hewlett Packard LG Electronics Motorola Mobility Microsoft Nokia Olympus Samsung Sony TomTom Motorola Solutions Woolworths Australia yes partial no KEY: Company Performance | Visual Overview 13 The remaining sections of this report look at companies eforts in specic evaluation categories. The infographic below provides a visual overview of company performance - each column represents one company, and each small coloured bar corresponds to one indicator. YES (positive) answers are in green, and NO (negative) answers are in red. The rest of this report will go into detail on these indicators. Note that companies with higher grades are doing more to manage their supply chains at multiple levels. Company Grade B- A c e r Final Manufacturing Smelting/ Components Extraction Performance on Key Indicators Policies See Policies section of report for details on indicators Performance on Key Indicators Traceability, Monitoring, Worker Rights See Traceability, Monitoring, and Worker Rights sections of report for details on indicators A m a z o n
K i n d l e * D C a n o n * D- D e l l B- F u j i t s u D+ G a r m i n C L G
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A u s t r a l i a C+ B+ B+ * = non responsive companies 4 Company Performance: Policies This chapter focuses on companies policies to address child and forced labour in their supply chains. While good policies do not necessarily mean good practices, they are a critical starting point. They form the backbone of management systems that uphold worker rights and protect against abuses. We use a set of indicators to assess each companys code of conduct, sourcing and subcontracting policies, and involvement with other organisations working to combat modern slavery. Electronics Industry F D C B A Company Performance: Policies Blackberry Dell Fujitsu Hitachi Ltd HTC* IBM* Amazon Kindle* Asus* Canon* Garmin Huawei* Hisense* Kogan* Palsonic* Soniq Intel* Lenovo* Oracle* Philips Toshiba Nintendo Panasonic SanDisk* Sharp* TEAC* Acer Apple Dick Smith Electronics* Hewlett-Packard LG Electronics Motorola Mobility Microsoft Nokia Olympus Samsung Sony TomTom Motorola Solutions Woolworths Australia Policies | Industry Overview The following statistics provide a snapshot overview of the existence of policies in the electronics industry to protect against exploitation, child labour and forced labour. They are based on the scorecards of the 39 companies we assessed, which can be viewed in more detail on the next page. Codes of Conduct A Code of Conduct lays out minimum social requirements suppliers must follow. Good codes are based on internationally agreed upon standards. The International Labour Organizations (ILO) Four Fundamental Principles and Rights at Work dene clear principles for prohibitions against child labour, forced labour and discrimination, and guarantees for worker rights to freedom of association and collective bargaining. Among the companies we assessed, it was encouraging to see that a majority - two thirds - have Codes of Conduct that align at minimum with these basic principles. 44% of the companies assessed had adopted the Electronics Industry Citizenship Coalition (EICC) Code of Conduct, which prohibits the use of child and forced labour and addresses the common roots of human trafcking. However, it fails to include the right to collective bargaining. Responsible Purchasing The way a company purchases from its subcontracted factories and suppliers afects those businesses ability to provide decent and safe conditions for workers. When brands deliberately foster intense competition, workers may sufer as suppliers seek to win contracts by depressing labour costs, such as wages and overtime payments. Only 10% of the companies assessed - Samsung, LG, Motorola and Microsoft - guarantee a decent price or alternatively take measures to nancially enable their suppliers to ensure decent working conditions. Subcontracting Policies It is common practice for suppliers to subcontract out parts of companies orders to unauthorised, unmonitored facilities where workers may be left without any redress in the event of abuse. These workers are some of the most vulnerable within the electronics industry. 41% of companies assessed say they are taking some steps to ensure the code of conduct standards are implemented in subcontracting arrangements. 15 Of the 39 electronics companies assessed: 15% Partial have a code of conduct that covers core ILO principles and Rights at Work 82% 3% Partial 10% Partial have a policy addressing subcontracting and homework 41% 20% have taken steps to use responsible purchasing practices Policies | Company Performance Scorecard A c e r * A m a z o n
K i n d l e Does the brand have a code that addresses labour standards? Does the code prohibit discrimination on the basis of personal attributes or afliations? Does the code include elimination of child labour? Does the code include abolition of forced or compulsory labour? Are suppliers required to ensure freedom of movement for employees and their right to leave and enter work voluntarily? Are suppliers prohibited from using recruitment fees? Does the code include freedom of association? Does the code include rights to collective bargaining? Does the code prohibit use of regular and excessive overtime? Does the code apply to multiple levels of the supply chain? Is the code included in supplier contracts? Does the brand have a policy of non-interference toward trade unions and worker organising? Does the brand participate in any multi-stakeholder initiatives? Does brand have a policy that addresses subcontracting in the supply chain (including homework)? Has the brand taken steps to use responsible purchasing practices? Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q1 Q2 Q3 Q4 Policies Code of Conduct Here is a more detailed look at our policies questionnaire. See how companies performed on specic indicators. 16 Policies Grade: Each coloured bar represents one indicator. Not all indicators in the Free2Work questionnaire are depicted in this graphic. KEY: yes partial no B D A p p l e B * C a n o n D e l l D C F u j i t s u G a r m i n H e w l e t t - P a c k a r d C D B H i t a c h i
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A u s t r a l i a A * = non responsive companies Winners & Losers Company Performance: Policies Policies | Good Practice Highlights 17 Collective Bargaining: Nokia Of all companies assessed, only Nokia provided evidence of factories that have collective bargaining agreements in place. History has demonstrated that collective bargaining and freedom of association are essential methods for workers to balance bargaining power in employment relations and negotiate for improved pay and working conditions. This is particularly important for workers in developing countries who undertake low-skilled work in regions where there is frequently a surplus of labour. These conditions dramatically weaken their negotiating power and make them vulnerable to exploitation and modern forms of slavery. Workplaces where employees are empowered through processes like collective bargaining will signicantly mitigate these risks. Beyond this, collective bargaining is also one of the ILOs Four Fundamental Principles and Rights at Work. It is concerning that only one third of companies had policies that included the right to collective bargaining, and only one company provided evidence that collective bargaining was occurring. Without the presence of worker representative organisations, rights to freedom of association and collective bargaining risk becoming rights in theory only. We encourage the electronics industry to embrace policies that promote collective bargaining and ensure that organisations allowing this to occur are in place. Recruitment Fees: Apple Apple requires suppliers to reimburse excessive recruitment fees charged to contract workers found working on Apple products. [1] In exchange for employment, labour brokers often charge potential contract workers recruitment fees. Where these recruitment fees are excessive, prospective employees may nd themselves with large debts before they start work. These debts, compounded by high interest rates, can leave workers paying a high proportion of their income in an attempt to pay these debts. Workers are often not allowed to leave until the debts are paid of, and this can result in situations of bonded labour. The EICC Code of Conduct prohibits charging workers excessive recruitment fees. Apple denes excessive recruitment fees as amounts in excess of one months wages. [2] In 2014, they reported that $US3.9 million was paid by their suppliers to workers who were charged excessive recruitment fees and since 2008, their suppliers have reimbursed contract workers $16.9 million. [3] Next, we encourage Apple to ensure that reimbursements are made available to more workers within its supply chain as there continue to be reports of workers who have not had recruitment fees returned to them. [4] It could also take further steps to entirely ban suppliers and labour brokers from charging recruitment fees to workers. The following are more detailed snapshots of two companies good practices in the Policies category. Companies that guarantee above local minimum wage Compare to Wage Impact: F ONE D C B A Sources: [1] Apple Supplier Responsibility Progress Report 2014 p.15. [2] Apple Supplier Responsibility Standards, Version 4.0 [3] Apple Supplier Responsibility Progress Report 2014 p.15 [4] China Labor Watch, Apples Unkept Promises, July 2013. https://www.chinalaborwatch.org/pro/proshow-181.html Blackberry Dell Fujitsu Hitachi Ltd HTC* IBM* Amazon Kindle* Asus* Canon* Garmin Huawei* Hisense* Kogan* Palsonic* Soniq Intel* Lenovo* Oracle* Philips Toshiba Nintendo Panasonic SanDisk* Sharp* TEAC* Acer Apple Dick Smith Electronics* Hewlett-Packard LG Electronics Motorola Mobility Microsoft Nokia Olympus Samsung Sony TomTom Motorola Solutions Woolworths Australia 5 This chapter focuses on electronics companies supply chain traceability and transparency. It looks at how 39 companies perform in this category and highlights specic good practices. Company Performance: Traceability & Transparency Blackberry Garmin Hitachi Ltd IBM* Olympus Amazon Kindle* Asus* Canon* Dick Smith Electronics* Fujitsu HTC* Hisense* Palsonic* TEAC* SanDisk* Sony TomTom Woolworths Australia Huawei* Kogan* Lenovo* Nintendo Oracle* Soniq* F D C B A Acer Motorola Solutions Philips Samsung Sharp* Toshiba Traceability & Transparency Scores: Apple Dell Hewlett-Packard Intel* LG Electronics Microsoft Motorola Mobility Nokia Panasonic Electronics Industry Traceability & Transparency | Industry Overview Surprisingly, many companies do not know exactly who produces their goods. Since child labour, forced labour and exploitation are used in electronics manufacturing, components manufacturing, smelting and mineral extraction globally, it is critical that companies know the actors in each stage of their supply chain to guard against such abuses. Public transparency is also important because it shows a companys willingness to be held accountable to both workers and consumers. We dene traceability as the extent to which a company understands its supply chain, and transparency as the extent to which it makes information publicly available. The statistics below reveal how the 39 companies assessed perform in three key traceability and transparency areas. Known Suppliers We believe it is the responsibility of companies to know the identity of their suppliers. Without this knowledge, it is impossible for brands to ensure the labour rights of the people who make their products. While there is still much work to be done, traceability is one of the electronics industrys areas of strongest performance. Almost half (49%) of all companies assessed have traced all or almost all of their suppliers responsible for the nal stage of manufacturing; 26% have done the same for their components manufacturing; and, while none have completely traced their mineral extraction, 59% of companies are involved in tracing projects to better understand their mineral suppliers in order to avoid sourcing conict minerals from the DRC. With respect to minerals tracing, there is room for improvement. Most of these traceability eforts are model projects that focus on a select few suppliers. Only 18% of companies directly traced some suppliers in the extractive stage through these pilot projects, including Solutions for Hope which is a closed-pipe tantalum supply chain project and the Conict Free Tin Initiative. Public Supplier Lists In the ght against child labor, forced labor and exploitation, it is vital that companies produce public supplier lists. Such lists increase the transparency surrounding industries, and enable companies to be held accountable to workers in their supply chains. Transparency also enables independent groups to shed light on working conditions, which can in turn facilitate better public understanding of the issues and consumer demand for change. Only 28% of brands we assessed provide public supplier lists, and of those, only Apple and Hewlett-Packard provide a comprehensive public list of suppliers at the nal manufacturing stage with both names and addresses. Dell also has a comprehensive public list of 95% of its suppliers including links to their websites and sustainability programs where they exist. 19 of companies assessed publish at least some supplier names 28% Of the 39 electronics companies assessed Components Manufactoring - 26% Final Stage Production - 49% Percentage of companies that have fully traced their suppliers for nal stage and components manufacturing, and percentage of suppliers that have partially traced their suppliers for minerals extraction: Partial Tracing for Minerals Extraction - 18% Traceability & Transparency | Industry Overview Tracing Projects The majority of companies we assessed are working to trace their supply chains, in most cases to prevent the sourcing of conict minerals. Conict minerals are those that emanate from places where an internationally- recognised conict is occurring. The Democratic Republic of the Congo, where an ongoing civil war has claimed 5 million lives [1] is the leading source of the worlds conict minerals: tin, tungsten, tantalum and gold (known collectively as 3TG). Many conict mines use child and forced labourers, and also host other forms of modern slavery such as sexual slavery and forced marriage. Children work in particularly hazardous conditions as diggers, porters, and mineral extractors. Many are forced to work in narrow mine shafts where their small bodies t better than adult ones. The 2010 Dodd-Frank Reform Act (US) requires companies that use any of these four minerals to learn more about their supply chains and report to the Securities and Exchange Commission. In order to comply with this new law, companies must prove that they have taken reasonable precautions to avoid these four minerals originating in the DRC and surrounding countries. The majority of these are engaged with the anti-conict mineral partnership of the EICC and the Global e-Sustainability Initiative (GeSI). The EICC and GeSI have established two tools that companies can use to check the conict-free status of their supply chains: the Conict Minerals Reporting Template and the Conict-Free Smelter (CFS) Program. The Reporting 20 Template is a survey that companies can ask their suppliers to complete. Suppliers ll in information related to the minerals they use, the products they create, and the smelters from which they source. If accurately completed, the surveys can provide valuable information about the rms from which they directly and indirectly source. The CFS Program, on the other hand, audits smelters and reners who elect to participate; rms are evaluated on the steps they take to avoid purchasing and/or processing conict minerals. Those that participate are publicly classied as conict-free. Sources: [1] International Rescue Committee, Mortality in the Democratic Republic of the Congo: An Ongoing Crisis 2006-2007. http://www.rescue.org/sites/default les/resource-le/2006-7_congoMortalitySurvey.pdf Of the 39 electronics companies assessed are involved in a project to trace minerals suppliers 59% Traceability & Transparency | Company Performance Scorecard Has the brand traced all or almost all of its suppliers at one raw materials level? (partial = some directly traced) Q4 Here is a more detailed look at our Traceability & Transparency questionnaire. See how companies performed on specic indicators. 21 Traceability & Transparency Grade: Final Manufacturing Smelting/ Components Extraction Is there a public list of countries in which suppliers are located? Q1 Q2 Q3 Is there a public list of suppliers? If not fully traced, is brand involved in a tracing project to locate unknown suppliers? Is there a public list of countries in which suppliers are located? Q1 Q2 Q3 Q4 Has the brand traced all or almost all of its smelters or components manufacturers? (partial = some directly traced) Is there a public list of suppliers? If not fully traced, is the brand involved in a tracing project to locate unknown suppliers? Does the brand have a system to make sure subcontractors are known? Does the brand track suppliers use of temporary or contract workers? Is there a public list of countries in which suppliers are located? Q1 Q2 Q3 Q4 Is there a public list of suppliers? D A c e r * A m a z o n
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A u s t r a l i a C * = non responsive companies Traceability & Transparency | Good Practice Highlights 22 Mineral Tracking Initiative: Motorola Solutions In 2011, Motorola Solutions, in partnership with AVX Corporation, established Solutions for Hope, an initiative that sources conict-free tantalum from the DRC. In establishing this project, Motorola has recognised that not all minerals sourced from the DRC or adjoining countries are actually fuelling the conict. In many parts of the DRC, minerals are mined by members of the ASM sector who are not associated with the ghting, and depend on these natural resources for their livelihoods. In 2012, it was estimated that 20% of the population of the DRC was either working in the ASM sector, or living of ASM generated income. [1] A blanket boycott of all DRC minerals therefore has the capacity to seriously harm the livelihoods of a large number of people. Solutions for Hope has established a closed-pipe supply line, in which carefully selected conict- free tantalum miners in the DRC supply the mineral to participating rms. This enables these miners to operate free of the general constraint imposed by the U.S. Securities Exchange Commissions anti-conict mineral regulations, while also providing them with a regular, reliable income. So far, Solutions for Hope has resulted in 145 metric tonnes of conict-free tantalum from the DRC entering the market [2] . This mineral tracking scheme provides cooperating companies with an unparalleled ability to trace the origins of at least a portion of the tantalum they use. In addition to Motorola Solutions, other companies in this report involved in this initiative include: Motorola Mobility, Nokia, Intel, Hewlett-Packard and Blackberry. Transparency: Philips, Hewlett-Packard, SanDisk and Apple Philips, Hewlett-Packard and SanDisk have been industry leaders in the area of transparency by making public their full list of smelters, which are crucial in tracing the origin of minerals. In 2014 Apple joined the initiative. These companies are now better able to manage the risks of child and forced labour in the portion of their supply chain they have traced. These companies publish the identity of their suppliers, which is critical as it enables independent groups investigating working conditions to highlight any concerns found in the supply chain. This level of transparency was unheard of in the electronics industry only three years ago. Beyond business interests, companies may fear that furnishing public supplier lists could expose them to criticism if a supplier is discovered violating labour rights. However, disclosure of suppliers this deep into the supply chain reects the commitment of these companies to being genuinely open and transparent. Sources: [1] G. Franken Certied Trading Chains in Mineral Production: A Way to Improve Responsibility in Mining in Non-Renewable Resource Issues: 213 Geoscientic and Societal Challenges, p.215 http://web.mit.edu/12.000/www/ m2016/pdf/certiedtradingminerals.pdf [2] Solutions For Hope Website/ Results http://solutions-network.org/site- solutionsforhope/results/ Companies that guarantee above local minimum wage Compare to Wage Impact: Winners & Losers F Only NOKIA D C B A The following are more detailed snapshots of two companies good practices in traceability and transparency. Traceability is the extent to which a company knows its supply chain. Transparency is the extent to which it makes information publicly available. Traceability & Transparency Scores: Blackberry* Garmin Hitachi Ltd IBM* Olympus Amazon Kindle* Asus* Canon* Dick Smith Electronics* Fujitsu HTC* Hisense* Palsonic* TEAC* SanDisk* Sony TomTom Woolworths Australia Huawei* Kogan* Lenovo* Nintendo Oracle* Soniq Acer Motorola Solutions Philips Samsung Sharp* Toshiba Apple Dell Hewlett-Packard Intel* LG Electronics Microsoft Motorola Mobility Nokia Panasonic Company Performance: Monitoring 6 This chapter focuses on electronics companies monitoring and training programs, which can be important parts of preventative systems. It looks at how 39 companies perform in this category and highlights specic good practices. Acer Apple LG Electronics Microsoft Blackberry* Garmin Hitachi Ltd IBM* SanDisk* Amazon Kindle* Asus* Canon* Dick Smith Electronics* Fujitsu HTC* Hisense* Kogan* Palsonic* Soniq* TEAC* Sharp* Sony TomTom Woolworths Australia Huawei* Lenovo* Nintendo Olympus* Oracle* F D C B A Monitoring Scores: Dell Hewlett-Packard Intel* Motorola Solutions Nokia Panasonic Philips Motorola Mobility Samsung Toshiba Electronics Industry Monitoring & Training | Industry Overview % of all companies assessed that use auditing # of companies that use internal monitoring, broken down by % of suppliers monitored by supply chain level 4 2 12 17 0% 1-25% 26-50% 51-75% 76-100% Internal Systems Twenty four (62%) of the brands we assessed use their own internally developed monitoring systems to investigate suppliers to some extent. These internal systems vary in quality and are not necessarily better or worse than third party audits. Third Party Systems Twenty-two companies use a third party auditor to monitor at least a portion of their supply chains. Many of these brands also use internal systems. Third party monitoring systems, like internal ones, difer signicantly in quality. Quality of Audit Unannounced audits can provide a more accurate picture of day-to-day operations because abuses cannot be as easily hidden without advanced warning. Workers are best able to express concerns when interviewed of- site, away from management. Only 24% of the assessed brands report using unannounced visits and/or of-site interviews to conduct at least a portion of their audits, with Samsung being signicantly more rigorous in its use of these measures than others (see good practice highlight below). Given that more than three quarters of the electronics companies we assessed arent engaging in these practices, improving the quality of auditing practices is an area in need of signicant attention by the industry. % of companies that use third party monitoring (FM) # of companies that use third party monitoring, broken down by % of suppliers monitored with this system 17 12 0% 1-25% 26-50% 51-75% 76-100% 5 % of companies that audit suppliers unannounced or with of-site worker interviews (FM) % of companies that monitor more than 75% of suppliers annually, by supply chain level Audits are tools companies can use to gain snapshots of suppliers working conditions and to identify major abuses including the use of modern-day slavery. Workers themselves are among the best monitors, since they are present when auditors cannot be. Accurate information can often only be gathered by interviewing workers of-site and away from management, where workers feel comfortable to express concerns. The most replicable model (one that is under-utilised) is one where workers are organised into a functioning union with access to a safe and efective grievance process. While audits can be a key element for ensuring compliance, they are by nature only efective when the information gathered is used to improve working conditions. Audits can form the basis for corrective action plans which suppliers can use to correct issues. Many suppliers lack the capacity or knowledge to provide certain protections to workers, which is why training programs can be an important tool. % of companies that monitor more than 75% of suppliers annually, by supply chain level Auditing Suppliers 24 4 62% 56% 24% 77 20 0% 1-25% 26-50% 51-75% 76-99% 100% 3 0 1 0 0 Final Manufacturing (FM)- 15% Smelting/ Components - 3% Of the 39 electronics companies assessed Minerals - 0% 4 Monitoring & Training | Company Performance Scorecard Here is a more detailed look at our Monitoring and Training questionnaire. See how companies performed on specic indicators. Does the brand monitor at least 75% of its suppliers with unannounced visits or of-site worker interviews? (Partial = some) Q2 Q3 Does the brand share audit reports and corrective action plans publicly? (Partial = some) Q1 Does the brand monitor at least 75% of its suppliers annually? (Partial = some monitored) 25 Monitoring & Training Grade: Q2 Q3 Q1 Q2 Q3 Q1 Does the brand monitor at least 75% of its suppliers with unannounced visits or of-site worker interviews? (Partial = some) Does the brand share audit reports and corrective action plans publicly? (Partial = some) Does the brand monitor at least 75% of its suppliers annually? (Partial = some monitored) Does the brand monitor at least 75% of its suppliers with unannounced visits or of-site worker interviews? (Partial = some) Does the brand share audit reports and corrective action plans publicly? (Partial = some) Does the brand monitor at least 75% of its suppliers annually? (Partial = some monitored) Final Manufacturing Smelting/ Components Extraction D A c e r * A m a z o n
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A u s t r a l i a C Q4 Are both auditors and factory managers trained to identify human trafcking, child labour and forced labour? Q5 Does the brand invest in supplier compliance implementation through training and other nancial support? Q4 Does the brand invest in supplier compliance implementation through training and other nancial support? Q4 Does the brand invest in supplier compliance implementation through training and other nancial support? * = non responsive companies Monitoring & Training | Good Practice Highlights Training: Hewlett-Packard Hewlett-Packard is the rst electronics company to introduce specic supplier guidelines for the use of student and dispatch workers. These workers are highly vulnerable to exploitation. There are a number of reports arising out of electronics factories of their use of child labour. Workers with temporary employment arrangements are similarly more vulnerable to exploitation, and are less likely to raise complaints about working conditions since their employment is easier to terminate. The training that Hewlett-Packard provides, aids suppliers at both the nal manufacturing and components manufacturing stages in understanding the issues faced by dispatch and migrant workers. In its 2011 Global Citizenship Report, Hewlett- Packard attributed improvements in suppliers audit performances to the training programs it had undertaken. These eforts are to be applauded and highlight the ways in which a company may engage with suppliers to deal with working conditions beyond the standard cycle of social audits and corrective action plans. Providing suppliers with training is one way to encourage deeper understanding of workers rights and to equip factories to identify the challenges faced by known vulnerable groups.
Companies that guarantee above local minimum wage Compare to Wage Impact: 26 Monitoring: Samsung Samsung conducts on-site internal audits for 100% of its factories responsible for the nal assembly of its products each year, with up to a quarter of those factories also being audited by a third party through the EICC. Furthermore, Samsung claims to audit between half and three quarters of their suppliers with either unannounced audits or with of-site worker interviews. From research into the impact of auditing in other industries, we know that the quality of social audits is crucial to their efectiveness at detecting incidences of modern slavery and worker exploitation. [1]
Unannounced audits and of site worker interviews are one of the most efective measures to get a genuine picture of what is happening at the factory level. Only 24% of companies were using these measures in their auditing, and with the exception of Samsung, they were only using them to audit a quarter of their supply chain or less. Samsung could further improve on the good work it is already doing by extending the use of these measures to its components suppliers and by making audit reports and corrective action plans public. Source: [1] Clean Clothes Campaign, How Weak Social Auditing is Keeping Workers in Sweatshops http://www.cleanclothes.org/resources/publications/05-quick-x pdf/view The following are more detailed snapshots of two companies good practices in monitoring and training. Winners & Losers F ONE D C B A Monitoring Scores: Acer Apple LG Electronics Microsoft Blackberry* Garmin Hitachi Ltd IBM* SanDisk* Amazon Kindle* Asus* Canon* Dick Smith Electronics* Fujitsu HTC* Hisense* Kogan* Palsonic* Soniq* TEAC* Sharp* Sony TomTom Woolworths Australia Huawei* Lenovo* Nintendo Olympus* Oracle* Dell Hewlett-Packard Intel* Motorola Solutions Nokia Panasonic Philips Motorola Mobility Samsung Toshiba Company Performance: Worker Rights 7 This chapter focuses on the degree to which companies support worker rights. It looks at how 39 companies perform in this category and highlights specic good practices. Acer Dell Fujitsu Hewlett-Packard Hitachi Ltd Intel* Microsoft Motorola Mobility Motorola Solutions Olympus Oracle* Philips SanDisk* Sony TomTom Toshiba Woolworths Australia F D C B A ------------------ Amazon Kindle* Asus* Blackberry* Canon* Dick Smith Electronics* Hisense* HTC* Huawei* IBM* Kogan* Lenovo* Nintendo Palsonic* Sharp* Soniq* TEAC* Worker Rights Scores: Garmin Nokia Apple LG Electronics Panasonic Samsung Electronics Industry Worker Rights | Industry Overview 28 Of the 39 electronics companies assessed Preferred Supplier Programs Companies may possess policies and codes of conduct, but they will have little genuine impact if there is no incentive for suppliers to adhere to them. Companies have the nancial leverage to demand and ensure decent working conditions including living wages, particularly by concentrating their order volumes with a sufciently narrow set of suppliers in order to command a signicant portion of a suppliers product capacity. All of the brands in this report have codes of conduct that espouse the protection of worker rights. However we found that only 38% of sourcing decisions at the nal manufacturing stage were based on supplier maintenance of such standards. Such systems should provide incentives to suppliers to continue improving labour standards. Grievance Mechanisms Grievance mechanisms are systems through which workers can anonymously submit complaints of violations of their rights and seek relief. While some companies ask their suppliers to establish internal grievance mechanisms, it is important that workers are given an avenue through which they can communicate to an external party, since the supplier may be directly responsible for the abuse. Among the companies assessed, 31% reported having a formal grievance mechanism available to some portion of their supply chain. base sourcing decisions on supplier labour conditions (FM level) 33% 5% Partial 31% have at least a pilot grievance mechanism project (FM level) 13% Partial Risks of modern-day slavery are far less in workplaces where individuals are able to claim their rights at work through organising, and where workers do not sufer from poverty wages. Most workers in electronics supply chains toil under poor conditions and are paid extremely low wages. We look at whether companies are actively addressing worker well-being. The statistics below reveal how the 39 electronics companies we assessed perform in two key Worker Rights areas. If child labour is discovered, does the brand nd a way to provide for the childs education and replace the lost income to the family? When child or forced labour is removed from the workplace, is it later veried by unannounced monitoring? Worker Rights | Company Performance Scorecard Does the brand guarantee that workers make a living wage? Does the brand have a system for basing sourcing decisions on supplier labour conditions? Does the brand have a functioning grievance mechanism (may be a pilot project)? Are collective bargaining agreements in place? Q1 Q2 Q3 Q4 Q5 Does the brand have any systems or policies in place to rehabilitate child or forced labourers if discovered? Here is a more detailed look at our Worker Rights questionnaire. See how companies performed on specic indicators. 29 Worker Rights & Remidiation Grade: Does the brand guarantee that workers make a living wage? Does the brand have a system for basing sourcing decisions on supplier labour conditions? Are collective bargaining agreements in place? Has the company identied independent, democratically elected unions in at least 50% of suppliers? (partial=some) Q1 Q2 Q3 Q4 Q5 Does the brand have a functioning grievance mechanism (may be a pilot project)? Does the brand guarantee that workers make a living wage? Does the brand have a system for basing sourcing decisions on supplier labour conditions? Does the brand have a functioning grievance mechanism (may be a pilot project)? Has the company identied independent, democratically elected unions in at least 50% of suppliers? (partial=some) Q2 Q3 Q4 Q5 Q6 Does the brand have any systems or policies in place to rehabilitate child or forced labourers if discovered? Final Manufacturing Smelting/ Components Extraction A c e r * A m a z o n
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A u s t r a l i a D Are collective bargaining agreements in place? Q1 Q7 Q8 Does the brand have any systems or policies in place to rehabilitate child or forced labourers if discovered? Q6 * = non responsive companies Worker Rights | Good Practice Highlights Living Wage: Nokia Nokia was the only brand we examined which demonstrated that any of their workers are paid a living wage. As discussed previously on page 5, wages are a crucial concern for workers, and one of the most signicant indicators of worker well-being. Nokia provided us with a third party audit report demonstrating the steps they undertook to conduct a basic needs analysis on the living costs of employees. They also provided a comparison that looked at the wages workers receive, the legal minimum wage, and living wage calculations of local NGOs and trade unions. Nokia has undertaken this analysis for a number of their factories, but not all; and, accordingly, have been awarded partial credit. This is one of the most signicant initiatives we have seen amongst electronics companies, and one that would be well worth replicating across the sector. Grievance Mechanism: Microsoft In 2011, Microsoft, the worlds largest software corporation, initiated a new grievance mechanism - a hotline that workers can access 24 hours a day, seven days a week to voice concerns. It is the only system of its kind in the electronics industry. The hotline came out of Microsofts collaboration with the Fair Labor Association and the Clear Voice Hotline, organisations that seek to improve conditions for workers by increasing, respectively, supply chain transparency and channels of communication available to workers. It is unclear to what extent Microsoft has informed its supply chain workers about the hotline or how the company will follow up in the event of a grievance. These actions will be critical to the hotlines efectiveness. 30 Fair Pricing (Non-Implemented): FairPhone FairPhone is a social business that is in the early phases of building what the organisation calls a fair(er) smartphone. At the time of publishing FairPhone had only just released their rst batch of phones, and as this initiative is still in its infancy we have not yet evaluated their operations. We do, however, look forward to seeing its progress. FairPhone will face an uphill battle in creating a decent supply chain because of its size. An employee notes, We know we cant change the system overnight as a small player with little leverage, but we think we have to make it tangible by raising awareness and making step-by-step interventions. We applaud FairPhones examination of supply chain issues like fair pricing for Cobalt - something the industry as a whole, which collectively has far greater leverage, should tackle. We will watch with interest as this small company attempts to progressively take these steps - steps that will only be possible if consumers provide the demand for the company to grow and gain greater leverage over its developing supply chains. Fairphone: About http://www.fairphone.com/about/ Companies that guarantee above local minimum wage Compare to Wage Impact: Winners & Losers F ONE D C B A Worker Rights Scores: The following are more detailed snapshots of three companies good practices in the worker rights category. Acer Dell Fujitsu Hewlett-Packard Hitachi Ltd Intel* Microsoft Motorola Mobility Motorola Solutions Olympus Oracle* Philips SanDisk* Sony TomTom Toshiba Woolworths Australia ------------------ Amazon Kindle* Asus* Blackberry* Canon* Dick Smith Electronics* Hisense* HTC* Huawei* IBM* Kogan* Lenovo* Nintendo Palsonic* Sharp* Soniq* TEAC* Garmin Nokia Apple LG Electronics Panasonic Samsung Index | Brand List 31 Company Name Brand Grade Living Wage Company Name Brand Grade Living Wage Acer Acer B- NO Apple Apple B+ NO Asus* Asus* D- NO Research in Motion* Blackberry* C- NO Research in Motion* Research in Motion* C- NO Canon Canon* D- NO Dell Dell B- NO Dell Alienware B- NO Dick Smith Electronics Dick Smith Electronics* D NO Fujitsu Fujitsu D+ NO Garmin Garmin C NO Hewlett-Packard Hewlett-Packard B NO Hisense Hisense* F NO Hitachi Hitachi C NO HTC HTC* D NO Huawei Huawei * D- NO IBM IBM* C- NO Intel Intel* B NO Amazon Amazon Kindle* D NO Kogan Kogan* D- NO Lenovo Lenovo* D- NO LG Electronics LG Electronics B+ NO Microsoft Microsoft B+ NO Motorola Mobility Motorola Mobility B NO Motorola Solutions Motorola Solutions B- NO Nintendo Nintendo D NO Nokia Nokia B+ PARTIAL Olympus Olympus B- NO Oracle Oracle* D NO Palsonic Palsonic* F NO Panasonic Panasonic B NO Panasonic Sanyo B NO Philips Philips C+ NO Samsung Samsung B NO SanDisk SanDisk* C- NO Sharp Sharp* C NO Soniq Soniq* D- NO Sony Sony C NO TEAC TEAC* D- NO TomTom TomTom C NO Toshiba Toshiba B- NO Woolworths Australia AWA C+ NO Woolworths Australia Essentials C+ NO Woolworths Australia Abode C+ NO Woolworths Australia Woolworths C+ NO Index | Brands By Grade 32 Company Name Brand Grade Living Wage Company Name Brand Grade Living Wage Nokia Nokia B+ PARTIAL Apple Apple B+ NO LG Electronics LG Electronics B+ NO Microsoft Microsoft B+ NO Intel Intel* B NO Hewlett-Packard Hewlett-Packard B NO Motorola Mobility Motorola Mobility B NO Panasonic Panasonic B NO Panasonic Sanyo B NO Samsung Samsung B NO Acer Acer B- NO Dell Dell B- NO Dell Alienware B- NO Motorola Solutions Motorola Solutions B- NO Olympus Olympus B- NO Toshiba Toshiba B- NO Philips Philips C+ NO Woolworths Australia AWA C+ NO Woolworths Australia Essentials C+ NO Woolworths Australia Abode C+ NO Woolworths Australia Woolworths C+ NO Garmin Garmin C NO Hitachi Hitachi C NO Sharp Sharp* C NO Sony Sony C NO TomTom TomTom C NO IBM IBM* C- NO Research in Motion* Blackberry* C- NO Research in Motion* Research in Motion* C- NO SanDisk SanDisk* C- NO Fujitsu Fujitsu D+ NO Amazon Amazon Kindle* D NO Dick Smith Electronics Dick Smith Electronics* D NO HTC HTC* D NO Nintendo Nintendo D NO Oracle Oracle* D NO Asus* Asus* D- NO Canon Canon* D- NO Huawei Huawei * D- NO Kogan Kogan* D- NO Lenovo Lenovo* D- NO Soniq Soniq* D- NO TEAC TEAC* D- NO Hisense Hisense* F NO Palsonic Palsonic* F NO Thank You | Our Team Of Volunteers 33 Abigail Blenkin Alison McGill Andrew Miller Andrew Roberts Eliza Whalley Emily Saunders Hugh Morgan Jasmin Howorth Jay Boolkin Jill Wardrop Julie Seymour Lenny Elario Liesje Barratt Marianne Ibrahim Mark Kelen Melinda Woodhouse Michael Williams Minusha Balacharige Naomi Fraser Nicky Mathieson Paul Atkinson Sarah Hando Sarah Martin Tanya Fenwick Teresa Leone Una McGeehan Yolande Kyngdon We would like to thank our team of volunteers who contributed many hours of research for this report over the past two years: Thank you!