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Investor Statement for Improved Working Conditions in Electronics Manufacturing Facilities

Following the series of 10 suicides at the Foxconn Technology Group factories in China, a coalition of 45 international investors published a statement to urge the electronics manufacturers in their portfolio to improve working conditions among their suppliers’ factories. Companies such as Apple, Dell, Hewlett-Packard (HP), Motorola, Nokia and Sony were directly targeted by this public call, and are expressly encouraged to, “use this opportunity to take a long-term outlook, and to focus on building more sustainable supply chains”.

The electronics manufacturing sector imposes very strict working conditions for its employees: excessive overtime, supervisor harassment, stress and mental health issues that can lead to suicides as it happened in the Foxconn factories in China in recent months. Sadly, the issues are not specific to Foxconn or Chinese factories but, “implicate broader systemic challenges”, explains the coalition of investors that sign a statement to improve these conditions among the electronics industry. The statement reveals: “While some improvements in workplace conditions and compensation have been achieved, there is little evidence of dramatically improved conditions. Part of the problem is the unwillingness of most global brands to disclose the nature and severity of many of the problems found at these facilities, and what they are doing to address them”.

To better address these challenges, the coalition proposes the following changes to be made among the sector to guarantee stricter supply chain compliance:

1. Providing safe and non-abusive workplaces that give workers a meaningful voice in maintaining and improving conditions.
2. Offering vigorous on-going training on worker rights, factory procedures, communication and grievance mechanisms.
3. Closely following limits on overtime and making sure that overtime is voluntary.
4. Training line supervisors and managers to eliminate harassment and other forms of abuse.
5. Supporting workers rights to trade union representation and collective bargaining.
6. Studying whether the social situation for migrant workers plays a role in anxiety, stress and suicide among workers and, if so, identifying social and industry policies to address this problem.

"We believe this is a wake-up call for the electronic industry to intensify its efforts to improve working conditions and the quality of life for workers producing their products. We urge companies, suppliers, governments and investors to focus on building more sustainable supply chains that mitigate risks while building safe and harmonious workplaces" says Steven Heim, Director of ESG Research and Shareholder Advocacy at Boston Common Asset Management.

In parallel, the {{LNK|Electronics Industry Citizenship Coalition|}}, which regroups 40 electronics companies, is committed to improve working conditions and adopted a {{LNK|Code of Conduct|}} to “encourage broad adoption of CSR best practices by all ICT companies and suppliers”. Nevertheless, even if the investors group supports this initiative, it also criticizes the EICC for gathering too much information instead of making concrete recommendations: “We believe that EICC could be far more assertive and proactive in ensuring worker rights”. In addition, Foxconn is a member of this coalition, which proves a disconnection between the coalition membership and what really happens in the local factories. In that context, the investors demand “full disclosure on supply chain practices”.

A new {{LNK|Maplecroft Report|}} also highlights the difficult working conditions in China, and reinforces the need to build more sustainable supply chains all around the world. "The Foxconn suicides are the latest reverberations of an alarm that has been ringing for many years now. The foundation of our global manufacturing system is not sustainable. Without strong investor support for meaningful change on the factory floor, we will continue to drift from crisis to crisis" said Adam Kanzer, Managing Director and General Counsel for Domini Social Investments.

This investors’ initiative illustrates the power of {{LNK|Socially Responsible Investing|}} as a tool to promote Corporate Social Responsibility among businesses: “As investors with a long-term perspective, we recognize that the investments in higher wages, training and monitoring that will be needed to address these systemic issues are necessary and worthwhile, and should contribute to the overall sustainability of this system”. Today, Socially Responsible Investing represents $2.71 trillion out of $25.1 trillion in the U.S. investment marketplace and participates in the construction of “a sustainable and equitable economy”.

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