January 27, 2004 11:00 AM PST

IT firms take heat for 'sweatshop' labor

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Workers in developing countries who make computer components for companies such as IBM, Dell and Hewlett-Packard are suffering atrocious conditions for extremely low pay, according to a report published Tuesday.

The Catholic Agency for Overseas Development (CAFOD), a U.K.-based nonprofit organization, said it has uncovered "dire working conditions" at computer production sites in Mexico, China and Thailand.

In the course of its investigation, CAFOD spoke with electronics workers in all three countries. It uncovered a litany of unsafe factories; compulsory overtime; pay below the legal minimum wage; and cases in which large numbers of workers were deprived of basic legal entitlements such as health, pension and employment benefits.

"The current situation is unacceptable," said Katherine Astill, CAFOD's private sector analyst. "Its products may embody the latest in high technology, but labor standards in computer manufacturing can be appallingly low."

CAFOD believes that these conditions are caused by the pressure within the information technology industry to cut costs in the drive to offer cheaper products. Many manufacturers have outsourced some of their operations to developing countries because wages are much lower, it's easier to hire and fire workers as demand changes, and few people are members of a union.

HP, IBM and Dell all have been singled out for criticism by CAFOD. The agency examined their codes of conduct for labor standards and found that all three fell below standards set by the United Nations.

IBM in particular was criticized for failing to include provisions that would stop suppliers from using forced labor or child labor, imposing excessive working hours, or using harsh or inhumane treatment. It also failed to ensure that suppliers pay a living wage.

IBM said it has already responded to this report by taking action to remedy some of the problems that have been uncovered. "IBM has long had a strong policy against discrimination in the workplace. We are taking steps to reinforce this with the suppliers, including updating our supplier agreement to include new language that specifically prohibits them from discriminating against employees and applicants for employment because of race, color, religion, sex, age, national origin or any other legally protected status," IBM said in a statement Tuesday.

"We thank CAFOD for bringing this to our attention," IBM added.

Some of the accounts published by CAFOD are harrowing. They include the story of Monica, a 26-year-old woman employed by a contract manufacturer that makes printers for HP. During her interview, Monica was subjected to a humiliating strip-search examination and made to take a pregnancy test.

Workers who fall pregnant are likely to be summarily sacked, according to CAFOD.

HP said it was not aware of such cases.

"HP is working with our suppliers on an ongoing basis to ensure that our suppliers' practices reflect our values and are consistent with our labor and environmental standards. We have implemented a Supplier Code of Conduct that has been rolled out to our top 50 suppliers, and we are working with those suppliers to ensure that their practices meet our code. We will work with them over time to roll out the code of conduct to their subcontractors as well," HP said in a statement.

"We are not aware of the specific incident detailed in the CAFOD report as 'Monica's story', or incidents like it," HP added. "We are committed to acting on any specific information dealing with violations of our code of conduct in the supply chain, and we will continue to implement our code with our suppliers."

Dell welcomed CAFOD's investigation. "This report raises some serious issues. We're pleased with our progress to date on dealing with these problems, but there's more work to do," a Dell representative said. "We're going to ensure that our suppliers understand the principles that they need to adhere to in order to work with Dell."

As part of the report, CAFOD laid out an "agenda for change," in which it called on multinational computer manufacturers to adopt codes of conduct for supply-chain management, based on the standards set by the United Nation's International Labor Organization, and to provide resources to make sure these standards are kept.

Governments also have a vital role to play, CAFOD said, by encouraging companies to improve their practices and by taking the issue into account when awarding its IT contracts.

Graeme Wearden of ZDNet UK reported from London.

 

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