CSR Policies & Initiatives:In the wake of mass staffs

suicide

OUTLINESVision, Mission, StrategyCSR of FoxconnMarket Forces AnalysisStakeholders Engagement & Phase Model

Key Issues & GapsRecommendationsConclusion

FOXCONN TECH. GROUP

HON HAI PRECISION INDUSTRY CO.

Founded 1974, TaiwanWorld largest contract manufacturer of 3C products

500 largest global Co.Taiwan, HK, London, China

VISIONTotal Cost AdvantagesVertical IntegrationsDevotion to greater social harmony and higher ethnical standards

MISSIONProvide electronics users the most cost-effective, high quality 3C products possible

STRATEGYDevelop strategic relationship with industry leaders

Focus on the development of global logistics capabilities

Expansion of production capacityVertical IntegrationMaintain technology advance and flexible production capabilities

New Products

CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

OF FOXCONN…

Foxconn Global Social & Environmental Responsibility Committee – an Executive Director was appointed to lead this group.

Some areas of the CSR of Foxconn:

(A) EmployeesWork Life Balance, Program provides

e.g. caring for newborn babies & managing family finance

Employee Education, e.g. Industrial Engineering Academy in ShenZhenSource: Foxconn, 2008, Corporate Social & Environmental Responsibility Report.

…CSR OF FOXCONN (CONT’D)

Advance Degree Education – there are 10,000 have participated under Foxconn’s sponsorship.

Supplier Employee Education & Development – for line operators.

Occupational Health and Safety – 700,000 employees world-wide, safety culture: “zero incidents and zero injuries” focus on prevention

(B) EnvironmentEnergy conservationReducing emissionsTree plantingRecycling

…CSR OF FOXCONN (CONT’D)

(c) Community Initiatives“Yongling Foundation” was

established in Taiwan & work together with China Communist Party in China – medical care, education, poverty, alleviation, culture & safety.

Support for minority populations

…CSR OF FOXCONN (CONT’D)

Charity world-wide

Christmas 2008 in the Wilson de Oliverira Nursery

Adopt a child Campaign 2008 South America

Donations to S.O.S Santa Catarina 2008

…CSR OF FOXCONN (CONT’D)

(D) Supply Chain SER ManagementFoxconn screen supplier, will terminate business relationship if they involve the following:

Child laborForced or prison laborRelease of poison or hazardous

materials to the environment or violate environmental laws

Working conditions that damage employee health

…CSR OF FOXCONN (CONT’D)

Buyers Pressure

80% Bottom line

MARKET FORCES – The BUYERS

STAKEHOLDER ENGAGEMENT

Stakeholder

Communication

Results/IssuesDegree

of Power

Employee

Satisfaction Survey,Employee Hotline,Presidents Letter Box

Proper work environment, barrier free communication

Weak

Customer

Customer Audits,Business Meetings

Code of Conduct, CSER audits,

Strong

NGO Scheduled Meetings,Annual CSER Review

International forums, Carbon disclosure Project & hazardous substances

Strong

Shareholder

BOD Meetings Increased ROI Strong

SUSTAINABILITY PHASE

RejectionNon

ResponsivenessCompliance

Efficiency- Systematic

Attempts to use resources

effectively for decreasing costs

Strategic Proactivity- Proactive Sus.

Strategy as source of CA

Sustaining Corporation

KEY ISSUES“No. of Suicide incidences increase in

Foxconn”;

Public blaming on CSRComplaint on harsh working environment & militaristic working style

“More than 40 France Telecom employees have taken their

lives since 2008”http://www1.voanews.com/english/news/europe/France-Investigates-Suicides-at-Telecommunications-Company-90571979.htmlhttp://www1.voanews.com/english/news/europe/France-Investigates-Suicides-at-Telecommunications-Company-90571979.html

SUICIDE RATES (PER 100,000), BY COUNTRY, YEAR, AND GENDER.

Note: Number of suicides per 100,000 of the population. * Selected rural and urban areas in China; ** Hong Kong SARSource: World Health Organization, Most Recent Years Available. Data as of May 2003. Downloaded in August 2005 from WHO web site at: www.who.int/mental_health/prevention/suicide/suiciderates/en/print.html

MaleMale FemaleFemale

13.0 %13.0 %

14.8 %14.8 %

GAPS BETWEEN ISSUESIssue in China Business Unit

Policy

Long working hours Claim to do 100 hours extra for overtime

Has policies sanctioning any practice of compulsory overtime and all overtimes are results of employees' voluntary participations

Harsh working conditions Militaristic working style

Has conducted a non-tolerance policy to anyone who imposes any kind of physical punishment to her employees/subordinates

RECOMMENDATIONS Strengthen & Expand their BCP.

- Risk management for terrorist / disease at their plants worldwide

Innovation in technology, reduce consumption and labour requirements.

Pay more attention to stakeholder - employees

Cultural /Social Study on community values Damage control for bad press received on employee treatment

– can jeopardize relations with suppliers

Strengthen & Expand their BCP. - Risk management for terrorist / disease at their plants

worldwide

Innovation in technology, reduce consumption and labour requirements.

Pay more attention to stakeholder - employees

Cultural /Social Study on community values Damage control for bad press received on employee treatment

– can jeopardize relations with suppliers

RECOMMENDATIONSScreen employees to detect those

having psychological problems or those with family history of depression.

Minimize OT by raising basic salary

Piped in music to create a stress less working environment (Muzak & Hawthorne Studies – improved productivity, less stressful)

Engage independent and reputable external audit committee to Audit their HRM policies and implementations and NGO’s

Screen employees to detect those having psychological problems or those with family history of depression.

Minimize OT by raising basic salary

Piped in music to create a stress less working environment (Muzak & Hawthorne Studies – improved productivity, less stressful)

Engage independent and reputable external audit committee to Audit their HRM policies and implementations and NGO’s

CONCLUSION Foxconn adopts good CSR &

employee practice as evidenced by their many contributions to the local community and by the above average facilities provided at their campuses.

The recent happenings are not a direct result of any practices, uncommon to the working conditions in China.

Employee suicide statistics in European countries are as high but have not drawn worldwide attention.

QUESTIONS ???

THANK YOU