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19 May, 2010
Not surprisingly, the race to drive down labour costs has given rise to reports of widespread abuse of international labour standards, both in the CM companies themselves and further down the supply chain. Typical conditions include below subsistence wages, excessive working hours, forced overtime, temporary contracts, no job security, unsafe working conditions and degrading treatment.
The practice of contracting out manufacturing and workforces enables major brand-name companies to distance themselves from the substandard working conditions experienced by the people manufacturing their products. But these companies are coming under increasing pressure to clean up the abuses in their supply chains. A series of high-profile consumer campaigns coupled with pressure from shareholders via responsible investment groups has increased awareness of the vulnerability of high profile brands to negative public perceptions of working conditions in their supply chains.
Yet most companies respond only by encouraging, with differing levels of enthusiasm, their suppliers to abide by their own unilaterally developed codes of conduct. This company-driven CSR approach has proven inadequate both to raising standards and sustaining them. Workers have no involvement in monitoring or implementing labour standards as collective labour relations are virtually non-existent. Most significantly, there is no evidence of implementation of company codes successfully addressing breaches of freedom of association or promoting a climate that is less hostile to workers wanting to join a union.
There are strong arguments in favour of taking an industry approach to improving labour rights including freedom of association. Supply chains are complex with a high degree of overlap - in many cases a range of brand name companies are supplied by the same factory.
This makes it practically impossible for a single company to successfully implement its code of conduct in a factory supplying multiple companies. Accordingly, many of the major companies have joined the Electronic Industry Citizenship Coalition (EICC), which has improving social and environmental conditions across the supply chain as a goal. Unfortunately, the industry code agreed by EICC members does not meet the ILO standard on freedom of association, nor does it include any right to bargain collectively.