H.P. Presses China Plants for Better Job Conditions

The International Herald Tribune

February 12, 2013

Hewlett-Packard (H.P.), one of the largest makers of computers and other electronics, is imposing new limits on the employment of students and temporary agency workers at factories across China. The action, following recent efforts by Apple to increase scrutiny of student workers, reflects a significant shift in the way electronics companies view problematic labor practices in China.

Many factories in China have long relied on high school students, vocational school students and temporary workers to cope with periodic surges in orders as factory labor has become increasingly scarce. Students complain of being ordered by school administrators to put in long hours on short notice at jobs with no relevance to their studies; local governments sometimes order schools to provide labor, and the factories pay school administrators a bonus.

For much of the past decade, many of the world's big electronics companies have largely neglected the problem, beyond tracking reports of the abuses in some cases. Apple made the unusual decision last year of joining the Fair Labor Association, one of the largest workplace monitoring groups, which inspects factories in China that make computers, iPhones and other devices under contract from Apple. And last month, Apple said it would begin requiring suppliers to provide information about their student workers ''so we can monitor this issue more carefully.''

Now H.P. is pushing even harder. Its rules, given to suppliers in China on Friday morning, say that all work must be voluntary and that students and temporary workers must be free ''to leave work at any time upon reasonable notice without negative repercussions, and they must have access to reliable and reprisal-free grievance mechanisms,'' according to the company.

The rules also require that student work ''must complement the primary area of study''—a restriction that could rule out huge numbers of students whose studies have nothing to do with electronics or manufacturing.

Enforcing workplace rules in China has always been difficult, as even Chinese laws on labor practices are flagrantly ignored by some manufacturers as they struggle to keep up with production demand amid labor shortages. The Chinese government announced last month that the nation's labor force had begun to shrink slowly because of the increasingly rigorous one-child policy through the 1980s and 1990s.

But complying with the new rules might be easier for suppliers contracting with H.P., which has relatively steady demand through the year for its products, than for suppliers working for rivals like Apple, with its big bursts of sales when new models are introduced.

Howard Clabo, an H.P. spokesman, said that the company would hold training sessions for suppliers starting in March and discussion sessions for government officials, nongovernmental organizations and

Tony Prophet, H.P.'s senior vice president for worldwide supply chain operations, said by telephone that H.P. was also capping the combined number of students and temporary workers at any supplier factory at no more than 20% of labor during peak periods, which tend to be during summer vacations and the Lunar New Year holiday period. H.P. plans to reduce that to 10 percent but has not decided when, Mr. Prophet said.

The practice of employing students and temporary workers has been at the center of growing criticism of employment practices at Chinese suppliers used by big international companies. Some of the companies are now seeing that the problems can harm their reputations.

In announcing increased scrutiny of student workers last month, Apple said in its supplier responsibility report that the ''cyclical nature'' of the student work ''makes it difficult to catch problems.''

''We've begun to partner with industry consultants to help our suppliers improve their policies, procedures and management of internship programs to go beyond what the law requires,'' Apple said.

Prophet of H.P. presented his company's new rules as a sign of corporate responsibility, as opposed to a competitive maneuver. ''We're doing this because we think this is an important issue, and there are certainly concerns around it and some ambiguity around the appropriate standards,'' he said.Labor activists have been particularly critical of Foxconn, a large contract manufacturer based in Taiwan that produces devices for H.P., Apple and other companies.

Mr. Prophet declined to discuss Foxconn's operations except to say that Foxconn would also be expected to meet the new standards. The company makes computers for the Chinese domestic market in Chongqing in partnership with H.P.

Liu Kaiming, the director of the Institute of Contemporary Observation, a group in Shenzhen, China, that advocates for labor rights, said some vocational school students spent the last year of their programs working at factories run by Foxconn or other companies.

''This sometimes even involves forced labor, which is absolutely against the corporate social responsibilities of companies like Apple and H.P.,'' Liu said.

Foxconn said in a statement that it had an apprenticeship program allowing students to work for one to six months on a voluntary basis only. Students are given subsidized housing and food like those for full-time workers, are paid above the minimum wage and are not allowed to work overtime or night shifts, Foxconn said.

Foxconn also said that it did not use workers from temporary employment agencies and that students made up only 2.7% of its work force over a year, on average. The company did not provide peak percentages during school holidays.

Mr. Prophet said that restricting students and temporary workers would limit the company's ability to increase production during seasonal spikes in demand.

''That is a compromise,'' he said, adding that H.P. and the industry would ''have to be increasingly sharp in their demand forecasts.''

Anita Chan, an expert on labor issues in China and a visiting fellow at the Australian National University in Sydney, said electronics companies should not use student workers at all.''Often, they are forced to work in a factory like it's an internship, and the schools may take a cut of the salary; often, they even send teachers to the factory to make sure the students are disciplined,'' she said, adding that schools continued charging tuition while students were in factories.

Electronics companies have taken the position that students also do summer jobs in other countries, including the United States, and learn something just from being in a work setting.