Report:Deplorable Working Conditions at Microsoft Supplier in China

April 19, 2010
Microsoft's supplier network is back in the spotlight once again after The National Labor Committee published a report last week detailing deplorable working conditions at one of the company's manufacturing plants in southern China. Specifically, the ...

Microsoft's supplier network is back in the spotlight once again after The National Labor Committee published a report last week detailing deplorable working conditions at one of the company's manufacturing plants in southern China.

Specifically, the report describes long working hours, low pay, insufficient food and limited freedoms for workers at the KYE Systems Corp. factory in Dongguan. (KYE makes Microsoft's Basic Optical Mouse, as well as an assortment of products for other companies, including Hewlett Packard, Best Buy, Samsung, Foxconn, Acer, Wi/IFC/Logitech and Asus-Rd.)

The conditions described in the report are appalling --particularly because the workers profiled are young teens, some only 14 years old. For example, according to The National Labor Committee:

KYE recruits hundreds-even up to 1,000- "work study students" 16 and 17 years of age, who work 15-hour shifts, six and seven days a week. In 2007 and 2008, dozens of the work study students were reported to be just 14 and 15 years old. A typical shift is from 7:45 a.m. to 10:55 p.m.

Workers are paid 65 cents an hour, which falls to a take-home wage of 52 cents after deductions for factory food.

Workers are prohibited from talking or listening to music during working hours. They can use the bathroom or get a drink of water only during their 10-minute breaks. As punishment, workers who make mistakes are made to clean the bathrooms.

Fourteen workers share each primitive dorm room, sleeping on narrow double-level bunk beds. To "shower," workers fetch hot water in a small plastic bucket to take a sponge bath. Workers describe factory food as awful.

To sum it up, the report states succinctly: "The workers have no rights, as every single labor law in China is violated. Microsoft's and other companies' codes of conduct have zero impact."

Microsoft has responded on the Official Microsoft Blog stating:

As a company that sells a wide range of hardware and devices, we take very seriously our corporate responsibility to ensure that the manufacturing facilities and supply chain operations that we use comply with all relevant labor and safety requirements and ensure fair treatment of workers. We have rigorous standards in place, and have established a robust supplier Social and Environmental Accountability (SEA) program.

We were therefore very concerned when we saw a report by the National Labor Committee (NLC) alleging that conditions at a factory operated by KYE in Dongguan, China, were adversely impacting workers. KYE assembles and packages hardware products for Microsoft and a wide range of other companies.

As a result of this report, we have a team of independent auditors en route to the facility to conduct a complete and thorough investigation. If we find that the factory is not adhering to our standards, we will take appropriate action.

See here for Microsoft's full response.

We all know that global sourcing is now standard fare on the corporate agenda and that means companies such as Microsoft are in a position like never before to improve the status quo for workers in emerging economies throughout the world.

But, what will it take to make that happen?

As I see it, there are three essential steps: first, identification of the problem; then, assessment; and finally, engagement. By improving standards in their supply chains and engaging policymakers and other key stakeholders, corporations can help create safe, rights-based conditions for workers conditions that, ultimately, are mutually beneficial to both workers and the businesses that hire them.

Companies that continue to chose to simply ignore these issues are putting their operations and their reputations at significant risk. We'll have to stay tuned to see how Microsoft --and its customer base --responds to these graphic revelations about the company's China supply chain.

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