Does third-party auditing have a role to play in improving working conditions in low-cost countries?
Author: Maggie Slowik - Categories: CSR & Green
Those of you who have been following the scandals surrounding Apple’s supply chain are probably aware of its recent decision to allow the largest investigation ever into a US company’s operations abroad. In February, Apple invited the Fair Labour Association (FLA), a prominent NGO to look at its factories in China, including those of Foxconn, which assembles iPhones and iPads for Apple, but also supplies to other companies including Dell, HP and Sony.
In a landmark agreement last week, Apple and Foxconn agreed to tackle deficiencies in working conditions. Actions include hiring tens of thousands of new workers, eliminating illegal overtime, improving safety protocols and upgrading workers' accommodation and other amenities.
But here are some staggering revelations: nearly half of the 35,000 workers surveyed by the FLA expressed that their working hours were reasonable and 34% said they would like to work more hours to make more money. And only 18% thought that their working hours were too long.
And yet, the first independent labour also revealed that Foxconn has been exposing its workers to more than 60-hour weeks. And sometimes working for seven consecutive days!
The solution: Foxconn has now committed to reducing weekly work time to the legal Chinese maximum of 49 hours and to make up for “lost” work time, it will raise hourly salaries.
Is this development, triggered by the involvement of a third-part auditor, truly going to change working conditions at Foxconn? And if I were to elaborate on that thought further, could third-party auditing be a potential solution to poor worker conditions in low-cost countries?
I typically take the stance that inspections and audit, no matter how they are conducted, are only providing a snapshot of a supplier’s operations. And how truthful this snapshot is, is an entirely new question. Let’s not forget the role that bribery could play in changing the outcome of an audit report.
But in the case of Apple, one could argue that the involvement of a third-party auditor such as the FLA is actually making an impact on worker’s conditions in China’s factory hubs. Arguably, the scenario economic scenario is somewhat ideal: wage inflation coupled with overall labour shortages in China makes employees more marketable in the sense that they are more likely to transition to another job to secure higher pay.
Now, the impact on Chinese working conditions overall may be marginal at best, but it might at least be a good start in the right direction.