The company’s initial reaction was to ask employees to sign letters promising not to harm themselves and to string up nets between buildings to catch jumping workers.  Both these measures are attempts to tackle the immediate problem, without investigating why people are jumping.  (The letters have since been withdrawn, as management realized that blanket assurances given under pressure rather missed the point.)  In a more proactive bid to cheer workers up, the company has sent in the clowns – in the form of  2,000 singers, dancers, and gym trainers for rest days, as well as recruiting psychiatrists and setting up help-lines.  Will this be enough to stem the tide of suicide?  Or is more wholesale change needed?

How does the Foxconn suicide rate compare with the national average?

Longhua is a gargantuan facility where 400,000 workers are fed and housed in a three-square-kilometer factory area.   10 suicides, or 2.5 per 100,000, is well below the national average of between 13 and 14.8 per 100,000 people (World Health Organization). However, the Foxconn workers are from a very specific demographic – migrants from rural areas in their early twenties and late teens.  Looking at WHO’s China suicide rates by age (although these are now 10 years out of date), the Foxconn figures are much closer to the national average, at around 3.5 per 100,000.  Interestingly, by far the highest suicide rates in China are of elderly people – the young in China are ten times less likely to kill themselves than the old.

So what then is driving the youthful workers of Foxconn to commit suicide at around the national average level for their age group?  On the face of it, they are far luckier than the vast majority of their contemporaries.  They have escaped rural poverty, they have good jobs, which offer the full protection of China’s labour laws.  They have better prospects than the vast majority of their peers and now they have an army of singers, dancers and gym trainers to keep them occupied.

Broken Dreams

A possible answer is suggested in an undercover report for Southern Weekend (translated from engadget).  A reporter, Liu Zhiyi, spent 28 days working Longhua.  He diagnosed the key problem as the bitter disappointment of young migrants as they face up to the reality that the streets of Shenzhen are not paved with gold.   Most workers come to the big city with the dream of working hard and saving enough money to start their own businesses.  They certainly find hard work –  repetitive, high-pressure jobs, with shifts starting at 4am,  but all too often they are unable to fulfil their earning aspirations.  At Foxconn, workers can earn around £90 per month for standard time.  Only with overtime can workers boost their income to around £200 per month. getting them much nearer to the earnings level they need to save and start a business.  At a factory like Foxconn, where overtime is well controlled, there are not many overtime hours to go round and so not many workers are able to meet their personal earnings aspirations.  Ironically, the more compliant the factory to China labour law and purchasers’ codes of conduct, the less the factory is able to meet workers’ earning needs.

Added to this disappointment is the sense of alienation felt by young people, a long way from home, with little chance to socialize.  Blogger Cressence argues that money is no longer the only priority for migrant Chinese – they also want a social life, which can be difficult in the factory environment.

How can a responsible factory try to overcome these problems?  We at Impactt believe that the Foxconn suicides could be a rallying call for a new approach to managing workers in China.  For too long, Chinese factories have tended to view labour as a commodity, to be kept in line through military discipline, and incentivised to work harder and longer rather than smarter and more creatively.  Workers are rewarded for the time they spend at work, rather than for the quality of their input.  It is time perhaps for factories supplying the electronics industry to borrow the management practices of some of their customers – companies like Apple and Dell have long understood the productivity and quality improvements derived from treating their people like people.  We hope that the industry will see the opportunity to transfer this knowledge, to enable Chinese factories to make the most of their human capital and to enable workers to reach their potential, rather than being cannon fodder for the production lines.

Foxconn has started by sending in the clowns (or rather singers, dancers and gym trainers) – this is an important step in acknowledging that workers are more than productive units.  We hope that Foxconn will take the time to listen to its workers and identify how the company can best meet their needs and aspirations, to stem this terrible tide, and to point to a more productive future.

This report was based on a range of evidence, collected from workers (working in the meat processing industry and in other sectors), supermarkets, meat and poultry processing firms, work agencies, unions, industry representative bodies, regulators and government departments.

The report cemented the figures from Unite’s campaign against some supermarkets in 2009.   Migrant- agency workers represent 30% overall of employees in this industry (out of agency staff working in the industry 70% are migrant workers). The report notes significant discontent amongst agency workers.   Of the 260 workers who gave evidence to the inquiry 8 out of 10 workers claimed to be treated differently to permanent staff, this included poorer pay, allocation of the least desirable jobs, and being treated like ‘second-class citizens’ in the workplace.

The problems that agency workers face is a dedicated chapter in this report, there are too many issues to mention in this blog alone, although all issues that workers face breach minimum ethical trading standards and basic human rights.  Worryingly, many workers had little knowledge of their rights and feared raising concerns would lead to dismissal:

• The staff also reported being refused toilet breaks and so having to urinate while on the production line.
• 1 in 7 of agency workers paid to find employment
• There was evidence that some women had been instantly dismissed when they became pregnant
• One fifth of workers reported being pushed, kicked or having things thrown at them by line managers, one third had experienced or witnessed verbal abuse.

Only 4 out of 260 workers preferred agency work to direct employment: Some workers felt that permanent contracts were awarded on the basis on nepotism or nationality.

This report also explores the conditions that have led to the industry being so racially divided: one noticeable reason being that the working conditions are so unpleasant and strenuous, that meat processing companies don’t have British workers applying to vacancies anyway.  The report has added fuel to the flames for both left and right wing activists.  Impactt would like to note that the high proportion of migrant and agency workers in this sector confirms the presence of poor labour standards.  This racially motivated political debate is centered on a symptom and not the root problem- the papers are missing the point. Poor labour standards should be the focus, not the race of the workers.

Impactt thinks that more focus should have been placed on the impact of the Agency Workers Directive (AWD 2011).  The AWD is addressed briefly in this report, but it may have been interesting to hear opinions from processing firms and agents about whether they have plans to accommodate this major change in labour law.

Impactt agrees that the primary source of demand, the supermarkets, should push harder for improvements in the industry, their auditing process should be more holistic. Impactt notes that the report misses a trick by not emphasizing enough the role that auditors have in improving standards.  The majority of auditing processes are mechanized, tick-box factory tours, with no scope in getting to the crux of the issue. Auditors should focus to a greater extent on off-site workers interviews to understand issues relevant to the site.

Impactt agrees that agencies such as the Gangmasters’ Licensing Authority (GLA) are instrumental in investigating agency labour rights; this authority however is  understaffed, despite two thirds of agencies agreeing that the GLA has improved standards by preventing unscrupulous agencies from operating.

Last year, Impactt was commissioned by the Asian Development Bank to co-ordinate a study into the impact of the global economic slowdown on value chain labour markets in Asia. Impactt worked with partners in ADB, ILO, and GTZ as well as local research partners in People’s Republic of China, Indonesia, Thailand and Vietnam to research the impacts of the downturn. The work culminated in a paper presented by our very own Rosey Hurst at the Asia-wide Regional High-level Meeting on the Impact of the Global Economic Slowdown on Poverty and Sustainable Development in Asia and the Pacific.

In the paper we found that of all the sectors studied: “the Vietnamese footwear industry has been hardest hit in terms of fall in demand, job losses and reduction in working hours…[and] Across all sectors temporary and migrant workers are the most vulnerable to retrenchment and changes in their wages and working hours.”

ADB has now announced the launching of anew Asia-Pacific Poverty Network Website (AsiaPovNet),  which they state is: “a knowledge hub on poverty reduction and inclusive growth in the region. It is a database on research and operational work of distinguished regional and national think tank institutions, governments, and multi- and bilateral development organizations.”

The first edition of the Asia-Pacific newsletter on poverty reduction and inclusive growth (AsiaPovNews) features Impactt’s paper together with other papers presented at the conference.

We are very proud to have been involved in these high level discussions on the policy implications of the downturn and are looking forward to seeing how Asian governments will respond to the lessons of the downturn.

Human Rights Watch released in Dubai last week its annual World Human Rights Report 2010, which along with 3 other countries, includes a chapter on the state of human rights in the United Arab Emirates.

The chapter covers a range of human rights issues, including press freedom, human trafficking, the rights of detained persons and torture. On labour issues, HRW claims that the economic crisis has had a negative effect upon the conditions for workers and criticises local companies for sending staff on ‘unpaid vacations’ when the downturn slowed, or in many cases brought to a halt, construction.

The chapter goes on to echo many of the criticisms made by HRW in their Tears on the Island of Happiness Report, released in May 2009, including:

• Visa sponsorship regulations restricting movement of workers.
• Lack of legal provision to protect workers right to strike and bargain collectively.
• Recruitment agencies frequently charging workers fees to get their job and the lack of a legal framework to criminally try those who engage in this practice.
• The presence of legal provisions which punish workers for going on strike.

The response to the report by the Government of the UAE has largely been one of dismay and criticism – it is said the report is not only “unbalanced” but also “factually incorrect”. A spokesperson from the Ministry of Foreign Affairs said that the report “…fails to adequately record the positive steps taken by the UAE with regard to labour and human trafficking issues not just in 2009, also in the last few years”.

The main initiatives which the Government claims HRW have ignored in their report are: the ratification of the UN protocols on Disabled Persons and Human Trafficking, the creation of three new Government human rights related institutions (the Human Rights Department (Ministry of Interior) Dubai Community Development Authority and a permanent taskforce of specialists to tackle human trafficking in Dubai) and the opening of a shelter for women and children in Abu Dhabi.

HRW does recognise that new legal standards on worker accommodation have been introduced, but Impactt note that there is no mention of the Wage Protection Scheme introduced last year, where workers are paid into bank accounts rather than directly in cash by their employers. While the scheme is still being rolled out, and has not been without its problems, it will ultimately deliver results for workers and should be acknowledged.

While there is no doubt that there remains plenty of work to be done for migrant workers in the UAE, to your average reader the chapter could come across as one-sided and HRW potentially weakens its position by not recognising the high profile initiatives underway.

Furthermore, HRW sadly provides little transparency on when or how the information in the report was collected. It puts itself at risk of sounding like it is rehashing old information, rather than using up to date and evidence.

Despite these weaknesses Impactt welcomes HRW’s ongoing reporting of the issues in the UAE. The organisation rightly reports that no country has a perfect human rights record and that the purpose of the report is to highlight ongoing issues to Governments and compel them to action – something Impactt is always supportive of!

When New Look and Impactt started working with Echo, one of New Look’s key garment suppliers, in 2006, the level of labour standards there were, what we could qualify as normal for a traditional Bangladeshi garment factory: wages were low and far from representing a living wage (workers earned an average of £20 per month); hours were high (more than 70 a week). On top of that, management systems were under-developed, efficiency and productivity were low and management was unsure of how to value labour as a benefit.

3 years on, Echo has achieved great results! Management has worked really hard to realign business incentives so it can deliver great quality products at a competitive price and at the same time provide great jobs for workers. The key to the success of this project over and above supplier engagement/vision coupled with New Look’s support was to understand how to motivate workers, identify bottlenecks in the production systems and more importantly create a sense of collective achievement, one that would benefit workers, factory management, as well as the retailer. For the first time in Impactt’s history, workers had barely any complaints!

Key achievements include:

• Maintaining working hours within legal requirements – hours are down to 48 hours a week and no worker has worked more than 10 hours a day since January 2009.
• Paying better wages – the lowest paid now earn 22% more money for far fewer hours than they were working before.
• A workers’ committee has been set up and workers can raise their issues directly with their representatives.
• Providing workers with a free meal every day. Malnutrition in Bangladesh is unfortunately very common – with anaemia a particular issue, especially for women. We were glad to hear that 74% of the workforce had gained weight after working one year at the factory!

New Look’s support has been crucial, extending payment terms and paying a little extra to support the free lunches.  The factory management’s and supplier’s commitment to rolling out the initiative has also been fantastic.

We are now busy extending this methodology to other factories and we will surely update you very soon!

The conference was split into two main sessions. During the first one, key speakers from the WTO China and the Chinese ministry of human resources and social security gave their views on the latest happenings in the CSR arena in China. They reinforced the message that CSR was very much in line with the Chinese idea of building a “harmonious society”. The presentations focused on how Chinese business often uses philanthropy as CSR, on the challenges faced by Chinese factories and on government efforts to push forward the CSR agenda and enforce labour & environmental legislation.

During the second session, the attendees were split into two groups. In our group, 4 companies shared their CSR programme with the attendees. Impactt was particularly interested in the Tchibo model. Tchibo supports 40 factories across China, Thailand and Bangladesh. They work on strengthening their human resources systems and improving productivity by training key factory staff. Their programme showed some very interesting results with increase in workers’ wages and reduction in working hours.

It is really good to see that the increase in numbers of companies working in this way -  We have been taking this approach in China  and elsewhere since 2001, and will shortly be publishing the key lessons we have learned in how to make sure that productivity and HR initiatives provide real benefits to workers.  Watch this space!

In this case, the workers were contracted through a labour agency in their home country. Supposedly regulated by the government, the agent took advantage of the vulnerability of the workers and demanded fees which flouted legal regulations. Workers, lured by the lucrative prospect of “winning their chance to go to Europe” and improve the standard of living of their families sold assets and borrowed money to pay the enormous fees.

Of course the reality is often different to what they are told (or sold) by agents: wages are lower, working hours are higher. They end up having to stay in their overseas job for a longer period of time to recoup the money they invested and hopefully make a bit of money to support their families. The factory who hired those workers in Europe was shocked to hear their stories.

These issues are of course complex and go from the unenforced regulations of the local government to crooked agents trading in people’s dreams for way out of poverty. Impactt has been working closely on this case with brands involved, the factories and of course the workers to find a sustainable solution for all.

Keen to raise his workers health and safety risk awareness and provide them with the tools to manage and reduce risk on a daily basis, manager Wayne Terry engaged Impactt to deliver training to his workers at Readymix Gulf as a part of the company’s Safety Month.

As site manager of the Sharjah and Ajman sites, lesser known Emirates of the UAE, Mr Terry has seen firsthand that his workers, who originate from southern India, Pakistan, Bangladesh and Sri Lanka, have little consciousness of the potential health and safety risks they encounter in their work each day and are thus frequently putting themselves at risk of injury.

Workers at Readymix Gulf largely work either as drivers (of trucks delivering the cement) or in the workshop (fixing the trucks). The nature of these jobs is such that workers are engaged in a multitude of different processes both on and off site on a daily basis.

An effective health and safety management system is clearly important in this situation as it enables for the promotion of a safe working environment and the facility monitoring it. However, in addition to this, a level of personal awareness and responsibility is critical for identifying and reducing risk in what is a complex and frequently changing environment.

To meet this need, in consultation with management and supervisors, Impactt developed a bespoke training programme which was delivered in Hindi and covered:

• Why care about health and safety?
• What are the health and safety H&S risks on concrete processing plants?
• Basic health and safety on site
• Build Safe UAE and how workers can contribute
• The view from workers
• Chemicals on site and how to use them safely
• Safety for drivers

Visits to site prior to the training session were important for collecting information on, and photos of, how workers were working so that the group exercises and presentations presented situations that the workers themselves had experienced. Each of the sessions involved exercises where workers worked in group to assess a situation, identify the issues, and discuss strategies for addressing them.

Using these kinds of participatory methods for training is very effective, particularly when dealing with semi-literate audiences. Plus they mark a good change from presentation heavy sessions and can be quite enjoyable – the workers had a great deal of fun working in teams to act out the animated safety stories developed by Build Safe UAE!

Finally throughout the sessions, and particularly in ‘The View from Workers’, we worked hard to facilitate workers to talk about their own view of health and safety and what needed to happen to manage the risks on site. In our experience workers have frequently thought before about their health on site and have some of the best suggestions for tackling safety issues.

Workers reported that they will “think about a safe exit before start of work in case of an emergency” and “review an area for risks before starting work and take steps to reduce them”, which indicates an encouraging level of risk awareness. Mr Terry reported following the training that “all the workers were very happy and satisfied with the course which has had a positive impact on site”.

If you are interested in finding out more about Impactt’s training services in the UAE and other Gulf countries please contact jaana@impacttlimited.com.

Improving labour standards can be a challenging road – the pace of change is frustrating and the magnitude of the problems sometimes overwhelming. However, there are winning situations that remind us why we do what we do.

Successful child labour remediation is one of those and we would like to share with you the story of a child found by Impactt in a Chinese garment factory in September 2008. Fifteen when we found her, Xiao Mei had migrated from her home town for work and used a fake ID card to enter the factory. With the support of the UK based company and brand buying from the factory, Impactt was able to transition Xiao Mei back into school and she has recently completed a study programme in computer advertising design.

Below is the text of a letter Xiao Mei asked us to pass on to the companies who funded her remediation. We are sure you will agree that this makes it all worthwhile.

“Before, when I was in the factory, I did the same repetitive work every day. I worked like that every day for more than ten hours, and it was a tiring life that I had then. I had my own dreams. Every now and then I would remember them and it would make me so sad.

I was afraid that my whole life would be like that. Sometimes it made me want to cry, my dreams just pushed aside like that. I forced myself to do so much work every day. I’ll even venture that I worked harder than everyone else, sitting from morning until night-time, so tired I felt like I couldn’t stand. I wanted to earn a lot of money so that I could realize my dream – a good life for my family.

Who would have known that this day would come so suddenly and so fast? So fast I could hardly believe it was real. I left the factory and came to school, and my dreams stayed alive…I think I am a person who hopes, who doesn’t feel sorry for myself anymore. I believe this is the truth!

For me, the evidence is right there, that even though this world is harsh and calculating, there is still a little love left in it. I would rather choose to believe that life is filled with hope. At school I made myself work hard, so that someday I can take care of my family.

Everyone yearns for their dreams, and I won’t give mine up easily either. Opportunities to study, like I’ve had, don’t come easily, and that makes me treasure it even more, and focus on enriching my life with my studies. The world is improving, and I’m improving. My programme of study was advertising design, and I hope that through this, I can one day be accomplished, hardworking and grounded enough to achieve my dreams. I will never forget the people who have helped me. There is only one thing I can say to you: Thank you. I have come to know the world in a new way. I will work hard! Wish me luck!”

These stories are not new and whilst nationalities and specific cases of exploitation change, the hotel industry is yet another sector where migrant workers are often isolated, unaware of their rights and lack English language skills.  This can make them easy victims for exploitation. The Newsnight story follows a flurry of reports this year relating to the mistreatment of migrant workers in the UK garment, meat and fruit industries.

Impactt have often found that labour standard issues tend to be more prevalent at sites using agency, temporary and migrant labour.  These issues are complex and cannot be reduced to a matter of blame; sustainable improvement relies on cooperation from all involved.  As a result, Impactt specialises in engaging with workers and acting as an avenue through which practicable improvements for workers can be developed with buy-in from both sites management and customers.