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FLA’s Auret van Heerden Discusses Foxconn

This is a post by Auret van Heerden, President & CEO of the Fair Labor Association. He recently appeared on CNN to discuss ongoing issues facing workers at Foxconn and how Apple’s recent admission to the FLA will help improve working conditions throughout the supply chain.

Since Apple disclosed its supplier list and the results of its internal audits, reactions have varied from encouragement, to skepticism, to shock. And yes – the very idea of people being injured or killed while working to manufacture the products we buy is appalling. We should be outraged by stories of workers being abused or exploited. But after countless reports over the years about the way workers are treated in factories, it is time to move beyond shock and start actually doing something about it.

We’re well past pretending supply chain issues don’t exist in everything we buy – from clothing and shoes to candy and electronics. There is no perfect product; Apple’s own audits of its suppliers reveal this. If we can ever hope to truly become “ethical consumers” – the kinds of people who won’t settle for one or two “ethically produced” items, but instead demand that everything we buy is produced in a way that respects workers’ rights – we need to know it all. The good, the bad, and the ugly. If we don’t know what is happening behind the scenes in the factories and on the farms in product supply chains, we will never be able to address the issues and make positive changes.

Ethical consumption starts with transparency. In other words, we can’t take action if we don’t have an open and honest discussion about the realities workers face every day. That’s why we should be encouraged by Apple’s disclosure and willingness to embrace transparency. Apple is not the first company to open up its supply chain to independent assessments, and it is not the first company to publish the results of its internal audits. But it is the first technology company to do so. It’s time for others to do the same.

At the Fair Labor Association, we have worked with dozens of companies over the years to identify issues throughout their supply chains and remediate them in a lasting way. This has not been easy, and clearly there is still a lot of work to be done. One of the best things to come out of these efforts, however, has been a shift in the way companies think about corporate social responsibility. The brands participating in the FLA know that they cannot hide behind promises and well-crafted statements. FLA-affiliated companies have endorsed and promoted the concept of transparency, and know that every time the FLA conducts an assessment of one of their factories, the results will be published. Opening up a company to this type of public scrutiny is hard for managers who like to maintain the prerogative, but the smart ones know that it’s necessary in order to move forward in a credible way.

By opening its doors and admitting the challenges and hurdles it has to face, Apple has taken a necessary first step. As consumers, it is our responsibility to keep the pressure on all of the other brands that have yet to take action. Punishing the companies that are embracing transparency could have a chilling effect on others who are considering taking the plunge. Instead, we should be asking why there are still so many companies who are not disclosing their suppliers and conditions in those facilities. We cannot wait another month or year for other companies to catch up. The longer we’re in the dark, the more dangerous things become for the people who make a living by working to produce what we buy. Let’s hold all companies accountable, and not just a select few.


Discussing Fair Wages in China

Representatives of major brands, the Chinese Government, and the Fair Labor Association (FLA) gathered in Beijing on January 8 to discuss a new book examining wage trends at the global level. The book, Fair Wages – Strengthening Corporate Social Responsibility, sheds light on wage inequalities and unfairness facing workers around the world. It was authored by Dr. Daniel Vaughan-Whitehead, professor of corporate social responsibility at Sciences Po in Paris, who is responsible for wage practices at the International Labour Organization (ILO).

The book launch was chaired by Mr. Zhang Junfeng, Deputy Director of the Institute of International Labor and Social Security in Beijing, and brought in the perspectives of brands, suppliers, and Chinese trade unions. H&M, an FLA Participating Company, and Chengfeng, an FLA Participating Supplier, spoke about the need to support fair wages. Participants called for transparency from factories and buyers on wage expectations and costs, support from the local government, and the need to set long-term objectives in wage policies. Auret van Heerden, President and CEO of the FLA, opened the event by introducing three key concepts: responsibility, sustainability and fair wages for a fair society. These ideas were echoed throughout the day as participants discussed the way forward toward more equitable wages in factories in China.

Professor Daniel Vaughan-Whitehead highlighted some key issues, which sparked an engaging discussion between the speakers and the audience:

  • The reasons behind, and the trend of, growing wage disparity, with the gap between the rich and the poor becoming only more polarized in most economies.
  • The growing debate around the legal minimum wage – what does it mean as compared to living wage, and what is the appropriate level for minimum wage?
  • Pay systems, and the benefits of mixed payment systems rather than the typical piece-rate system employed in most factories worldwide.
  • Insufficient overtime payment and lack of transparency in reporting hours worked.

Visit www.fair-wage.org for more information, and learn more about the Fair Wage Approach.


Apple Joins FLA

The Fair Labor Association today announced that Apple will join the FLA as a Participating Company, effective immediately. The FLA will independently assess facilities in Apple’s supply chain and report detailed findings on the FLA website. Apple becomes the first technology company to join the Association as a Participating Company.

FLA Participating Companies agree to uphold the FLA Workplace Code of Conduct throughout their supply chains and commit to the FLA’s Principles of Fair Labor and Responsible Sourcing. In 2011, the FLA worked with Apple to assess the impact of Apple’s training programs which help raise awareness of labor rights and standards among workers in its supply chain. Like all new affiliates, Apple will align its compliance program with FLA obligations within the next two years.

“We found that Apple takes supplier responsibility seriously and we look forward to their participation in the Fair Labor Association,” said Auret van Heerden, FLA’s President and CEO. “We welcome Apple’s commitment to greater transparency and independent oversight, and we hope its participation will set a new standard for the electronics industry.”

Read more.


FLA Hosts Training on Wage Issues in China

On January 3 and 4, 2012, FLA hosted a training session in Shenzhen, China, for accredited monitoring organizations and others wishing to learn more about the Fair Wage Approach developed by Daniel Vaughn-Whitehead of the ILO. During the training, attendees debated the piece rate payment system that is widely used in Chinese factories. This system pays employees per garment produced and is often implemented because it seems transparent and easily understood by both workers and managers. However, this approach can result in long working hours due to the incentive to produce a high quantity of goods. It also fails to build loyalty in the workforce and can lead to a poorer-quality product.

Some attendees suggested a mixed-pay system that could combine the piece rate system with performance incentives. These incentives could be quality-based, skills-based or even attitude-based, rewarding an employee for contributing to a positive working environment. This mixed approach, they said, could help keep the compensation system simple to understand and manage, while incentivizing workers to invest in their skills, the workplace atmosphere, and quality of the goods they produced.

Learn more about FLA’s approach to wage issues in supply chains.


Investigation Report Published on Labor Rights Allegations at Style Avenue Factory

On October 12, 2011, the Institute for Global Labour & Human Rights released a report titled, “Dressing Babies in Sweatshop Clothing: Dallas Cowboys, Ohio State and a Creepy Business.” The report alleged a number of noncompliances at the Style Avenue factory in El Salvador, including harassment or abuse and forced overtime. Two collegiate licensees registered with the FLA – Outerstuff and College Kids – were sourcing from the factory at the time of this report. Outerstuff and College Kids commissioned FLA-accredited monitoring organization, GMIES, to investigate the allegations. GMIES has completed its investigation and prepared a report, which is now available on our website. During the investigation, GMIES identified noncompliances and additional risks of noncompliance, including:

  • violations of the exercise of workers’ freedom of association;
  • harassment of workers;
  • hours of work that exceeded the local norm;
  • high temperatures in the workplace;
  • water that did not meet the Salvadoran potability standard and was not apt for human consumption;
  • delays in payment of contributions to the Social Security and Pension Funds Carriers system; and
  • failure to grant paid vacations.

Read the full report and remediation plan here.

Outerstuff and College Kids collaborated with GMIES and the FLA on a remediation plan, which Style Avenue management has agreed to implement immediately. The remediation plan focuses on creating sustainable improvement at the factory, and the FLA will monitor progress over the next six months. At that time, FLA will conduct an independent verification of the implementation of the remediation plan and publish a report.

This case is a good example of stakeholders working together to quickly address issues and protect workers. Stay tuned for more information.


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