2016 November 14

Electronics Watch Monitoring: Focus on China

An Electronics Watch risk assessment of the electronics industry in China suggests that risks of particular concern include forced labour, discrimination against women workers, excessive and illegal working hours, underpayment of social security obligations, health and safety hazards, abusive termination of employment, and violations of collective bargaining rights.  Three experienced monitoring organisations—Economic Rights Institute, Globalization Monitor, and Labour Education Services Network—conducted the research and monitoring activities for this regional risk assessment, which was released to affiliates in October 2016.

Affiliate public sector buyers can use the risk assessment and accompanying tool to educate their suppliers and take specific action to mitigate these risks.  The assessment highlights a structural issue of concern which can increase the risk of forced labour: employer strategies for low-cost flexible labour to accommodate fluctuating high and low production demand.  For example:

Student intern labour. It is common practice for electronics factories to collaborate with vocational schools to recruit student interns as short-term workers. Students generally do not have a choice over when and where to intern, and the internship is often not related to their studies. Still, the students must undertake the internships or they will not receive their educational diplomas. In this case, student internships may be forced labour, that is, work under threat of a penalty.   Public buyers can work with suppliers to ensure student internships relate to students' field of study, as required by law, and also conform with new regulations, limiting "full-duty internship students" to 10% of the total worker population and to 20% of specific positions.

Dispatch labour. Factories have long used dispatch labour agencies to obtain low cost labour for periods of high production.  Dispatched workers usually receive comparable income to regular workers, but have no job security or social security.  Dispatched workers are also more vulnerable to exploitation, deprived of the protections in a formal employment relationship with their factory.  Public buyers can work with suppliers to ensure dispatched workers do not exceed 10% of the workforce as required by new regulations.

Overtime. On the one hand, overtime is generally required rather than voluntary, and legal limits are seldom observed.  On the other hand, the vast majority of electronics workers want overtime given the low basic wages.  Yet, workers' desire for overtime is not without limits. Excessive overtime has contributed to worker strikes in some factories, especially when combined with overtime premiums lower than the legal rate.

Public buyers can address excessive overtime with suppliers in several ways.  First, suppliers should ensure workers are properly compensated for overtime and that overtime is not pushed to weekdays to avoid higher premiums on the weekend. Second, suppliers should promote worker-management negotiation on working hours as required by law.  Chinese law requires employers to consult with workers before imposing overtime and gives workers the right to refuse excessive overtime. If the right to consultation on working hours were more widely respected and implemented, more workers would also be engaged in de facto collective bargaining, a fundamental labour right.

Long-term, suppliers should recognise the link between low wages and excessive overtime and address both issues together.  Workers' wages are far from a living wage.  In fact, they are so low that most workers cannot afford caring for their children in the cities where they live, but leave them in the countryside to be cared for by grandparents or other relatives. There are an estimated 61 million "left-behind children" in China, or one fifth of all children in China.  This tragedy is the flipside of workers' desire for long overtime hours.