Microsoft Response to Chinese Labor Abuses Lacks Details

Following reports of abusive labor conditions at KYE by the National Labor Committee, the factory in China that manufactures Microsoft's Basic Optical Mouse — and a variety of other products for other companies — Brian Tobey, Microsoft's Corporate Vice President, Manufacturing and Operations, Entertainment and Devices, has posted the following response on the Official Microsoft Blog:

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.

We should note that as part of Microsoft’s ongoing supplier SEA program, an independent auditor has been inspecting the KYE factory annually. In addition, Microsoft personnel conduct quarterly on-site assessments, and receive weekly reports from KYE on key labor and safety criteria that we monitor as part of our supplier SEA program. Over the past two years, we have required documentation and verification of worker age, and no incidence of child labor has been detected. Worker overtime has been significantly reduced, and worker compensation is in line with the Electronic Industry Citizenship Coalition standards for the Dongguan area.

Despite these earlier findings, we take the allegations raised this week quite seriously. Another comprehensive on-site audit of the facility will be conducted next week, with a specific goal of investigating the allegations raised in the NLC report. In addition, we will have monitors on site pending the results of the inspection.

We will take all appropriate steps to ensure the fair treatment of the KYE workers.

There are several contradictions in Microsoft's statement. Firstly, if the corporation claimed that it had found no problems in KYE's factory conditions during independent annual inspections, then why did it feel the need to "significantly reduce" worker overtime? Kernaghan stated that overtime is not obligatory, but the $0.52-an-hour wage forces the plant's workers to work 80 hours-plus a week in order to make a decent living.

Microsoft says it relies, at least in part, on KYE to provide its labor and safety reports on its own factories.

The annual inspection of the factory by an independent auditor failed to uncover the abuses catalogued by the NLC report. Did the inspector not do a good job, or did Microsoft ignore his findings? What actually was the auditor charged with looking for? That no one was suffering abuse, or that workers were not asleep or improperly assembling mouses during the long working hours?

Microsoft has used the KYE factory since 2003, however, it has only required proof of age of its workers for the past two years. What was the policy between 2003 and 2008? And whose task was it to collect the information? If it was up to the management at KYE, then why wouldn't they doctor the results, or leave out the details of the underage employees?

Microsoft claims that "worker compensation is in line with the Electronic Industry Citizenship Coalition standards for the Dongguan area." There are no such standards specifically for the Dangguan area. The Electronic Industry Citizen Coalition is a worldwide body with worldwide standards. It acknowledges local law but goes further. Here is its code of conduct. Point 3 states this:

Studies of business practices clearly link worker strain to reduced productivity, increased turnover and increased injury and illness. Work weeks are not to exceed the maximum set by local law. Further, a workweek, should not be more than 60 hours per week, including overtime, except in emergency or unusual situations. Workers shall be allowed at least one day off per seven day week.

According to the NLC report, workers at the KYE plant get three days off each month.

Point 5 of the EICC's code of conduct states this:

The Participant's disciplinary policies and procedures shall be clearly defined and communicated to workers. There is to be no harsh and inhumane treatment, including any sexual harassment, sexual abuse, corporal punishment, mental or physical coercion or verbal abuse of workers: nor is there to be the threat of any such treatment."

According to a first-person eyewitness cited in the NLC report:

"Every day we have to gather together after work and hear the foreman speak. There was one boy who joined the factory not too long ago who fled the work area; he decided that he didn't want to stay there one more minute. Our foreman discovers that he is gone and ruthlessly says: "watch me punish him later!"

Microsoft says that it will take "appropriate action" if its auditors discover unpalatable working conditions, but there is no mention of ceasing to use the KYE plant in Dongguan City. Microsoft is the third largest corporation in the world, so it surely has the resources to pull out of its contract with KYE, should it be found guilty of human rights abuses, something that Microsoft's SEA program must cover. However, the NLC does not want Microsoft to pull out of China and put people who need work out of their jobs.

Fast Company contacted Microsoft and requested a phone call to clarify some of the unanswered issues, but no one from Microsoft was directly available for further comment.

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