IT vendors exposed over 'sweatshop' factories

An investigation has uncovered harrowing tales of unacceptable working practices in the developing world where major technology firms have outsourced their manufacturing

Workers employed in factories in the developing world making computer components for companies such as IBM, Dell and Hewlett-Packard are suffering atrocious conditions for extremely low pay, according to a report published on Tuesday.

CAFOD, the Catholic Agency for Overseas Development, says it has uncovered "dire working conditions" at computer production sites in Mexico, China and Thailand.

In the course of its investigation, CAFOD spoke with electronics workers in all three countries. It uncovered a litany of unsafe factories; compulsory overtime; pay below the legal minimum wage; and cases where large numbers of workers have been deprived of basic legal entitlements such as health, pension and employment benefits.

"The current situation is unacceptable. Its products may embody the latest in high technology, but labour standards in computer manufacturing can be appallingly low," said Katherine Astill, CAFOD's private sector analyst.

CAFOD believes that these conditions are caused by the pressure within the IT industry to cut costs, in the drive to offer cheaper products. This has seen many manufacturers outsource some of their operations to developing countries where wages are much lower, it's easier to hire and fire workers as demand changes, and very few people are members of a union.

HP, IBM and Dell have all been singled out for criticism by CAFOD. The agency has examined their respective codes of conduct for labour standards, and found that all three fell below standards set by the United Nations.

IBM in particular was criticised for failing to include provisions that would stop suppliers from using forced labour or child labour, imposing excessive working hours, or using harsh or inhumane treatment. It had also failed to ensure that suppliers pay a living wage.

IBM said it has already responded to this report by taking action to remedy some of the problems that have been uncovered. "IBM has long had a strong policy against discrimination in the workplace. We are taking steps to reinforce this with the suppliers, including updating our supplier agreement to include new language that specifically prohibits them from discriminating against employees and applicants for employment because of race, colour, religion, sex, age, national origin or any other legally protected status," said IBM, in a statement released on Tuesday.

"We thank CAFOD for bringing this to our attention," IBM added.

Some of the accounts published by CAFOD are harrowing. They include the story of Monica, a 26-year-old woman employed by a contract manufacturer making printers for Hewlett-Packard. During her interview, Monica was subjected to a humiliating strip-search examination, and made to take a pregnancy test.

Workers who fall pregnant are likely to be summarily sacked, according to CAFOD.

HP said it was not aware of such cases.

"HP is working with our suppliers on an ongoing basis to ensure that our suppliers' practices reflect our values and are consistent with our labour and environmental standards. We have implemented a Supplier Code of Conduct that has been rolled out to our top 50 suppliers, and we are working with those suppliers to ensure that their practices meet our code. We will work with them over time to roll out the code of conduct to their sub-contractors as well," said HP in a statement.

"We are not aware of the specific incident detailed in the CAFOD report as 'Monica's story', or incidents like it. We are committed to acting on any specific information dealing with violations of our code of conduct in the supply chain, and we will continue to implement our code with our suppliers," HP added.

Dell welcomed CAFOD's investigation. "This report raises some serious issues. We're pleased with our progress to date on dealing with these problems, but there's more work to do. We're going to ensure that our suppliers understand the principles that they need to adhere to in order to work with Dell," a Dell spokesman told ZDNet UK.

As part of the report, CAFOD has laid out an "agenda for change", in which it calls on multinational computer manufacturers to adopt codes of conduct for supply-chain management based on the standards set by the United Nation's International Labour Organisation, and to provide resources to make sure these standards are kept to.

Governments also have a vital role to play, CAFOD says, by encouraging companies to improve their practices and by taking the issue into account when awarding its IT contracts.