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Friday, 29 July 2011

Western companies still neglect their workers in the low-wage countries, by letting them work under inhumane circumstances. Is this just ignorance or modern slavery?

Western companies are always struggling to produce their goods against the lowest costs, in order to remain competitive and to be able to sell their products at affordable prices. The strategy of most Western companies is to stop producing in the western countries and to move all production-facilities to the so-called ‘low-wage countries’.

These low-wage countries could be the countries of the former Eastern Block (Poland, Rumania, Bulgaria etc.), but mostly, these are countries in the Far East: China, Vietnam, Cambodia and the Philippines, to name a few. This phenomena is called the ‘race to the bottom’. I wrote already on this subject in my article Multinationals and their country of origin, when I described the German producer of sports articles, Adidas. Here is a snip of this article:

The search for the last penny has become so serious for Adidas, that they are going to leave China in favor of Laos, Cambodia, India and Eastern Europe “because the salaries, set by the Chinese government, have become too high”. Germany will not become new factories.

Although the western companies bring tremendous amounts of money, jobs and prosperity in these often poor, agriculturally-oriented countries, there are some nasty side-effects of production in the low-wage countries.
The most commonly seen abuses are:
·      Child labour
·      Extremely poor accommodation for workers, without any kind of privacy.
·      Extremely long working days of up to 18 hours.
·      Extreme workload and impossible deadlines
·      Unsafe, unhealthy and even hazardous labour circumstances, that often lead to (sometimes fatal) accidents in the factories:
o    Usage of dangerous tools without proper protection and protective clothing
o    Dangerous chemicals and metals
o    Other hazardous materials
·     Extreme pollution of the factory-terrain and neighbouring villages, rivers and lakes, as a consequence of ignoring basic safety and environmental rules.

Local governments often remain silent, as they don’t want to offend the companies that bring many jobs and prosperity to these municipalities. Sometimes, representatives of local governments are even paid-off to look the other way.

Although this might sound cynical: Besides the low costs for labour, these are the main reasons that companies can produce at very low costs in the low-wage countries in the first place.

If they would produce the same goods in the west, the costs for labour, labour unions, housing and protection of their workers would be many times higher. The same is true for the environmental and (even) legal costs, as people in the west are better educated and better know their rights.

There are in general two ways of producing goods in low-wage countries:
·     Companies produce the goods in their own subsidiaries. Examples of this are: Philips, Nike and Puma
·     Companies order the goods from local subcontractors. Examples are: C&A fashion and Apple.

Unfortunately, there is commonly no big difference between these two possibilities, as far as it concerns labour circumstances and environmental protection. There are of course companies that (sometimes under pressure of the public opinion) do take care of the labour circumstances and environmental issues.

However, many companies are (deliberately) unaware. Sometimes companies even approve of the bad labour circumstances, although they officially deny knowing about it.

Since the start of 2011, I wrote some articles on the labour circumstances of Foxconn- workers, who were producing iPhones and iPads for Apple:

But Apple is not the only western company that had its share of bad publicity on the labour circumstances in their Far East-factories.

The Dutch newspaper ‘De Volkskrant’ writes a shocking story on the labour circumstances in Cambodia, where workers produce clothes and shoes for European companies, like Puma (sports articles) and Hennes & Mauritz (H&M;fashion). I will show here the pertinent snips of this story:
Workers faint in factories Puma and Hennes & Mauritz (link in Dutch).
One by one, the workers in the Huey Chuen factory in Cambodia drop to the ground. They were working on sports shoes for the famous brand Puma, when they suddenly felt sick. Almost fifty workers are admitted in the hospital of capital Phnom Penh.
This happened last Monday, Puma confirmed. It is not the first time that workers in clothes and shoe factories in Cambodia drop down. Last week, approximately hundred workers collapsed in another factory near the Cambodian capital, where clothes are manufactured for H&M. In June, large amounts of workers became sick: in two days about three hundred workers collapsed. Among factory workers, this phenomena is called fainting disease.
The clothing industry is very important for Cambodia. The last year the industry soared with 30% growth and delivered $3 bln in revenues. This was mainly caused by the production of clothes for international fashion brands, like Marks & Spencer, H&M, Puma and Inditex, a large clothing retailer. An estimated 300,000 Cambodians worker in the clothes manufacturing factories.
The American Fair Labor Association did an investigation towards an earlier incident in April. At that time, in two day about one hundred people fainted in a shoe factory of the sports brand Puma. High concentrations of chemical substances in the air where one of the causes for fainting.
Workers use glue and chemicals to manufacture shoes and clothing, but the factory halls where it is often 40 oC (104 oF), are insufficiently ventilated.  Besides that, the workers came in contact with the poisonous  substance Toluene, although the Puma rules prohibit this. Contact with this substance can lead to short-term effects like dizziness and sickness and in the long run to amnesia.

Yesterday, there was an interesting discussion on this topic on Dutch business news radio station BNR. The trillion dollar question was: should we boycott these brands or should we protest in other ways.  The 'communio opinis' was that we should not boycott the brands, because the Cambodion workers would lose their jobs.

I absolutely don’t agree: I think the only way to change the attitude of these European and American brands towards their low-wage workers, is to boycott these brands, until they improve the labour circumstances in their factories. Because currently these are not jobs, but it is modern slavery. And I thought we abolished slavery 150 years ago, although it might have been later for The Netherlands.

In one of the snips that I didn’t print of the aforementioned article, a spokesman of Puma states “that the brand considers to buy its workers in Cambodia a lunch meal”.

Oh my God, thank you, Puma, for so much generosity! And when you are busy with that, please consider to repair the ventilation and to install air conditioning in the factory halls. Otherwise the meal won’t do much good after all. And maybe an 18-hour working day is just a teenie weenie little too much?!

I said it before in these colums: if you are in a shop and you are making a  decision on purchasing something, make a wise one. And ignore the brands that don’t treat their workers right. It is up to me and you to change the world!

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