Connect to share and comment

Special Reports

Labor violations are the norm at factories making high-tech gadgets.

Silicon Sweatshops: A promising model

There's no easy way to police supply chains in Asia. But one US high-tech firm and its Taiwan supplier are taking a creative approach that might just work.

[Editor’s note: Silicon Sweatshops is a five-part investigation of the supply chains that produce many of the world’s most popular technology products, from Apple iPhones, to Nokia cell phones, Dell keyboards and more. The series examines the scope of the problem, including its effects on workers from the Philippines, Taiwan and China. It also looks at a novel factory program that may be a blueprint for solving this perennial industry problem.]

DONGGUAN, China — If fixing labor conditions in the high-tech supply chain seems hopeless, consider the case of Xiao Yang.

Xiao, a young migrant worker from Henan Province, works at a factory in Dongguan, this one a 5,000-employee high-tech firm owned by Taiwan's Chicony. The firm supplies keyboards, computer mice and other peripherals to the world's top PC firm, HP, and other major brands.

The factory looks like any other in this part of China, and doesn't have state-of-the-art facilities. But it feels like a different world.

"At this factory, we get paid for annual leave and other conditions, according to the law," said Xiao, while showing a GlobalPost reporter around tidy dorm rooms. "It's well-known among other workers as a good factory."

Workers have access to KTV (karaoke) and a basketball court. They get free annual medical checks. And every once in a while they dine on chicken feet – considered a big delicacy for Chinese kids from the countryside, and unheard of at other factories.

Most importantly, though, they say they know their rights, and management listens to them. A telephone hotline allows them to make anonymous complaints. Every Friday, managers post a list of the complaints they've received and how they're being resolved.

All this didn't happen on its own. In what is thought to be the first project of its kind in the industry, HP collaborated with several Hong Kong nonprofit groups to improve conditions at its supplier factories.

Starting in the summer of 2007, the nonprofits worked with Chicony to educate workers about their rights. One group, the Chinese Working Women Network, set up and ran the workers' complaint hotline, and then trained workers themselves to run it.

A migrant worker in Dongguan sleeps in a factory dorm.
(Sharron Lovell/GlobalPost)

HP covered the Chinese Working Women Network's costs for the training, but declined to reveal the total amount. Chicony pitched in its own funds to improve the factory's food and other working conditions.

"The cost is affordable to any company — even small suppliers could handle the amount," said Ernest Wong, a Hong Kong-based supply chain responsibility official for HP. "But the cost isn't the critical point. The key is how you engage with the supplier company."

At first, convincing skeptical Chicony managers to work with an NGO wasn't easy, said Jenny Chan, formerly with the Hong Kong-based group Students and Scholars against Corporate Misbehavior (SACOM), which coordinated the project at Chicony (SACOM says it receives no direct funding from HP).

"It's like a marathon," said Chan. "It's so tough to convince factory managers that these are new expectations, not only from your customers, but from global citizens and how they think of a good and competitive factory."

But to listen to one Chicony manager, the firm has found the corporate responsibility religion. Chen Jianqiao said that the program has created a "win-win situation" for both management and workers. Workers are more efficient because they feel their voices are heard and respected; management wins points and new business with Western customers and has fewer conflicts with employees.

"The benefit to the workers is a benefit to the company," said Chen. "Because of this program, our customers have noticed, and our business is going well despite the economic crisis. We haven't experienced any downturn."

Involving workers and