Recently, the ILO Better Work Programme released the executive summary of a scoping study into the feasibility of a Better Work programme in the electronics industry. Leading brands and suppliers expressed little immediate demand for an additional/different assessment programme such as could be delivered by Better Work. This is due to the central position the Electronics Industry Citizenship Coalition (EICC) enjoys among these companies, including the buy-in to the EICC' existing auditing system and information-sharing platform.

Recently, the ILO Better Work Programme released the executive summary of a scoping study into the feasibility of a Better Work programme in the electronics industry. The study was executed by Ergon Associates Limited. Here some crucial parts of the study are taken over. Click here for the full executive summary.

For the purposes of the study, the focus is on consumer- and business-oriented ICT equipment—sometimes referred to as the “3Cs” (computer, communication and consumer electronics)—and critical assembled components used in their final assembly, e.g. printed circuit boards. It does not cover industrial equipment with electronics elements, nor is the extraction and processing of raw materials within the scope of this study. Brazil, China, Indonesia, Mexico, Philippines, Thailand and Vietnam were studied with regard to electronics manufacturing. The report covers a description of the value chains and commercial drivers in the sector, employment relationships and labour standards issues, and initial evaluation at country level using the Better Work country selection criteria.

Summary of employment and labour issues as presented in the executive summary
There are an estimated 18 million workers in the industry worldwide, but employment structure has shifted dramatically in recent years and jobs move regularly, with a general shift of manufacturing away from developed countries to developing countries. Increasingly, goods are manufactured in Asia, particularly China, which is the world's largest producer of electronic goods (China accounted for 35% of global electronics employment in 2004, likely much higher by now). Women and migrants (mainly internal, moving from rural to urban areas) make up much of the workforce in many countries, though women’s share of the workforce can range from 5–87% in the countries studies.

Employment relationships can be characterized as:

  • predominantly formal work (though little is known about relationships at lower tiers of the supply chain—i.e. micro-component manufacturing rather than assembled components) BUT

  • reduced direct, recognized employment relationships in developing countries, which lead to an increase in indirect employment through an agency, and/or use of temporary contracts, which obstruct establishment of employment relationships. This has also been encouraged by outsourcing as companies state the need for “flexibility” of workforce to meet production processes and demands.

Workers in the electronics industry appear at risk of experiencing largely the same set of labour rights violations wherever production is carried out. These issues are pervasive and endemic across the electronics (production and assembly) industry in both South-East and East Asia, and elsewhere, though they vary from workplace to workplace.


Common problems in labour standards and working conditions workers face relate to:

  • occupational safety and health, particularly exposure to chemicals and ergonomics during manufacturing

  • low pay, including even lower pay for women workers

  • long hours, including excessive, sometimes compulsory, overtime

  • discrimination (e.g. age, pregnancy, women of reproductive age)

  • harassment and bullying treatment in some workplaces

  • precarious work (job insecurity, short-term contracts, inability to join union owing to absence of recognized employment relationships)

  • issues related to migrant workers (discrimination, deductions, lack of access to local social security, legal and heath systems)

  • obstacles to exercise of trade union rights (lack of union access to workplaces, negative management attitudes)

  • pay issues, including fines, deductions, non-payment of benefits

  • poor awareness among workers of statutory and agreed rights

  • inappropriate use of adolescent workers including overuse “apprenticeships” and “vocational training”.


Opportunities for Better Work, as presented in the executive summary

  • Many stakeholders consulted acknowledged potential comparative advantages of Better Work‘s engagement in the electronics industry. The following aspects of Better Work received widespread support and interest. In some cases, these were also starting to be addressed, to a greater or lesser extent, by other initiatives in the sector and by other departments of the ILO. Engagement points for Better Work included:

  • Room to improve the thematic scope of EICC’s Code of Conduct: Better Work could take steps to act as a broker to bring together value chain actors to address the issue.

  • Labour administration and inspection: There is a need for more support at national level for tripartite discussions and for legal enforcement.

  • Enterprise-level services: Companies identified the need for more supplier capacity-building/enterprise-level training. Other initiatives (notably IDH) also plan to develop or use existing training. There may be scope for Better Work to work in conjunction with these initiatives using existing Better Work training, or to develop new training which the programme could license to others.

  • Social dialogue—industrial relations, worker-management communication: It is clear from conversations with stakeholders that the areas of industrial relations and worker/management communication in general represent major challenges to the industry—which they are least equipped to address and are of particular importance to workers and their representatives. There may be scope for Better Work to develop tools or services in these areas.


Feasibility assessment findings, as presented in the executive summary

  • Evidence of labour standards deficits and poor enforcement was found in all study countries, particularly during elements of the manufacturing and assembly functions.

  • The manufacturing and assembly links in the value chain employ large numbers of workers in all countries, though the number of workers in China is markedly larger than other countries studied. Women and migrant workers are identified as key groups. 

  • Improvement in working conditions and management systems such as worker communication and dialogue could boost productivity by reducing labour turnover. But labour standard compliance is not a competitive advantage for brands or suppliers at present, as there is insufficient demand, as yet, from customers, other than in the public procurement sphere. The state of labour compliance or enforcement is not a determining factor at an enterprise level in sourcing decisions nor at a country level in location decisions. 

  • While risk factors vary, all countries have adequate social and political stability. 

  • In all countries the health of the industry largely is determined by global demand. The sector has experienced substantial growth rates and this is set to continue with continuing consumption in developed markets, and increasing consumption in emerging markets. 

  • National situation not tested as part of this study. At international level, support from relevant unions and NGOs.

    The main international industry association focussed on labour standards compliance, the EICC, has established a mechanism for conducting joint compliance assessments and sharing assessment results. The EICC expressed some interest in training services. Some brands and suppliers have operations or supply chains in all countries, though common agreement on China as the key country of interest.

  • The main international industry association focussed on labour standards compliance, the EICC, has established a mechanism for conducting joint compliance assessments and sharing assessment results. The EICC expressed some interest in training services. Some brands and suppliers have operations or supply chains in all countries, though common agreement on China as the key country of interest.

  • There is some trade union presence in all countries so there is theoretical scope for factory assessment, capacity building and tripartite engagement. However, private sector stakeholders are committed to their own inspection programmes and that of the EICC, so current scope for Better Work factory assessment is questionable. More perceived demand for capacity-building and dialogue activities.

  • Questions around buyer and supplier demand for factory assessment present significant challenges to potential sustainability at this time.

  • No existing IFC investments in the industry or supporting infrastructure in the focus countries. However, synergies with ILO Sector initiative in Indonesia, Vietnam and with existing Better Work programmes in Vietnam and Indonesia and potentially in the Philippines. Other industry initiative (IDH) focussed on China and potentially Brazil.

 

The study notes that private sector labour standards compliance activities are established in the industry, but are not as developed as in the garment sector. Some brands have their own compliance programmes leading to some duplication in audits. The Electronics Industry Citizenship Coalition (EICC), the only common initiative dealing with labour standards in the industry, is described as an industry-governed initiative with no trade union or NGO presence within its formal governance structure. The EICC code is not fully in line with ILO conventions on freedom of association and collective bargaining, though some members have adopted more stringent codes.


Despite the existence of problems in labour standards and working conditions in the electronics sector and the opportunities for Better Work, as perceived by the authors of the scoping study, leading brands and suppliers expressed little immediate demand for an additional/different assessment programme such as could be delivered by Better Work. This is due to the central position the  Electronics Industry Citizenship Coalition (EICC) enjoys among these companies, including the buy-in to EICC' existing auditing system and information-sharing platform.