Hisense, Palsonic fail Baptist World Aid's human rights test while 50 others scrape by

56 electronics companies were graded on their approach to monitoring their supply chain by Baptist World Aid, with not one receiving an A and only 20 receiving a B-level score.
Written by Asha Barbaschow, Contributor

Hisense, Palsonic, and Polaroid have all failed to make the grade on forced labour, child labour, and exploitation in Baptist World Aid's 2016 Electronics Industry Trends report.

56 electronics companies were probed as part of the not-for-profit organisation's report that evaluated a company on how ethically and sustainably their products are made, with a focus on human rights and protecting workers from exploitation.

Given that most of a company's production is done in developing countries around the world, Gershon Nimbalker, advocacy manager at Baptist World Aid, said that the report focused on the production process of the products that the electronics giants are selling, rather than their corporate or retail staff and how they are treated.

To evaluate the 56 electronics companies represented in the report, Baptist World Aid used an A to F grading system measured through key electronics supply chain production phases: The extraction of minerals at the raw materials level, smelting and refining and/or component manufacturing at the inputs level, and the final manufacture of the product.

Baptist World Aid then asked each company a set of 61 questions about its production policies and practices, addressing the company's management of such policies and practices at each supply chain level.

Nimbalker said the questions asked by his organisation fell under four categories, with the first being its policies, which was the evaluation of the brand's code of conduct, sourcing, and subcontracting policies, and involvement with other organisations working to combat child and forced labour.

Second was traceability and transparency which looked at how thoroughly the brand understands its own supply chain, and whether it discloses critical information to the public.

Then monitoring and training, which measured the adequacy of the brand's monitoring program to address the specific issues of child and forced labour; and worker rights which assessed the degree to which the brand supports worker well-being by ensuring that they are able to claim their rights at work through collective bargaining or worker-owned cooperatives, and whether workers earn a living wage.

"No company provided evidence that workers were being paid a living wage," Nimbalker said.

"In many of the developing countries where many of these companies operate, the legal minimum wage is often set so low that it is insufficient for them to be able to live and lift themselves out of poverty as well."

He said that Hisense, Palsonic, and Polaroid's receipt of an F grade reflected that the company has not disclosed anything to the public about their labour rights management system.

"Despite our best efforts to engage them, they have not come back to say, 'This is our process'," he said. "If customers don't have any information about what these companies are doing to protect workers, then how can they be confident that workers aren't being exploited?"

Whilst no company received an A, Acer, Apple, BSH Group, Intel, LG Electronics, Microsoft, Motorola Mobility, and Samsung received a B+ grade; Garmin, HP, Motorola, Philips, and Toshiba came back with a B; and with a B- were BlackBerry, Dell, Dick Smith Electronics, Electrolux, Panasonic, and Ricoh.

Nimbalker said that he wants companies to be transparent about the efforts and initiatives that they're undertaking to make sure that workers are not being exploited so that the public can make better investing and purchasing decisions. He said that consumers can vote with their wallets and preference those companies that are taking action to ensure that workers are being protected.

"An A+ company has a strong set of policies, they know their supply chain well -- all the way from the raw materials to the final stage of production -- they're monitoring that supply chain and they're paying living wages and making sure that workers have a voice," Nimbalker said.

B+ means that a company is doing better than it peers; however, Nimbalker said that if these companies were graded on the absolute strength of their supply chain, they would be bunched further toward the C, D, and F range.

"Even at the B+ range, none of the companies had knowledge of where all their raw materials were coming from -- they're a long way off understanding that level of their supply chain, which are where the greatest risks are," he said.

"Child miners are a huge problem in the electronics supply chain, particularly in countries like the Democratic Republic of Congo or the Philippines."

Human rights activism organisation Amnesty International recently released a report that showed the problem of child mining in cobalt mines, which often finds its way into the batteries of electronics.

In its report, This is What We Die For: Human Rights Abuses in the Democratic Republic of the Congo Power the Global Trade in Cobalt, Amnesty documents the hazardous conditions in which miners, including thousands of children, mine cobalt, tracing its use to the powering of mobile phones, laptop computers, and other electronic devices.

"The glamorous shop displays and marketing of state of the art technologies are a stark contrast to the children carrying bags of rocks, and miners in narrow manmade tunnels risking permanent lung damage," Mark Dummett, business and human rights researcher at Amnesty International said.

"Millions of people enjoy the benefits of new technologies but rarely ask how they are made. It is high time the big brands took some responsibility for the mining of the raw materials that make their lucrative products."

Nimbalker echoed Dummett's statement, saying that Baptist World Aid is pushing companies to increase their visibility and their knowledge of the supply chain and to trace it all the way back to where their minerals are coming from so they can ensure that workers are not being exploited.

Nimbalker said that deep into the supply chain, most companies will not even be aware of the condition of working environments.

"Often companies don't even know if their supply chains are even in compliance with local laws," he said.

"In a factory like China, which is a bit more monitored and pretty well regulated, for the most part they'll be in compliance but things like working hours you'll often see situations where many of the workers are working significantly excessive working hours well above the legal requirements of the companies.

"A lot of these companies will outsource their production to someone else, in the past many companies have said 'that's the extent of our legal responsibility, this isn't us it's the supplier'."

This is the second time Baptist World Aid has prepared an Electronics Industry Trends report, which forms part of a series the organisation produces called Behind the Barcode, which also includes the fashion industry. Nimbalker expects Baptist World Aid to continue its probing every two years until all companies are transparent and are looking out for the working conditions of their suppliers.

Since its first report, SanDisk, Dick Smith, Asus, Garmin, and Blackberry all improved on their respective grading.

Falling just short of a fail this time around with a D- were Capital Brands, GoPro, Haier, JVC Kenwood, Kogan, Leica camera AG, Soniq, Sunbeam, TEAC, and Vorwerk; Dyson received a D; and a D+ went to Amazon, Arcelik AS, Canon, Fujitsu, HTC, Huawei, Lenovo, Oracle, and Whirlpool.

Breville, Ericsson, Olympus, and Tom Tom received a C+; Asus, DeLonghi, Hitachi, Nikon, and Sony a C; and Google, Kodak, Nintendo, and Sharp received a C-.

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