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Social Impacts of the Production of Notebook PCs

by Andreas Manhart & Rainer Grießhammer

LCM 2007, Zürich, August 27-29

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→ Various social trouble spots in the life cycle of ICT products

→ Growing consumer concerns

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BMBF:Case study computer

&Methodology development to integrate social aspects into LCA

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All companies in thesupply chain meeta required set ofminimum standards

1 Notebook “contains”:- 1.752 working hours- less than 0,00002 accidents- no occupational diseases

?

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d eThe Computer‘s Life Cycle

L i f e C y c l e o f C o m p u t e r s

• WSIS • EMPA• StEP• Greenpeace

• World Bank• FIAN• FFI

• CAFOD• SOMO• Corporate data

HardwareManufacturing

ResourceExtraction Use Disposal &

Recycling

→ Focusing on social aspects

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d eSupply Chain Simplification

Notebook

Mainboard

Printed CircuitBoard

Network Interface Card

Case …

Printed CircuitBoard

Inductors …

Copper Foil Epoxy Resin

Crude OilCopper Ore

Resistors

Copper Ore

CPU

PlasticSi-Wafer

Crude OilSilica Sand Crude Oil

…

Copper Foil Epoxy Resin

Crude OilCrude OilCrude Oil Copper OreCopper Ore

Copper Foil Copper FoilEpoxy Resin Epoxy Resin

Printed CircuitBoard

Printed CircuitBoard

Crude OilCopper Ore

Copper Foil Epoxy Resin

Printed Circuit Boards

Mainboard Network InterfaceCard

Inductors Resistors

Boards & Cards

Passive Electronic Components

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A. EmployeesA.1 Safe & healthy working conditionsA.2 Freedom of association, right to

collective bargaining & workers‘participation

A.3 Equality of opportunity andtreatment & fair interaction

A.4 Abolition of forced labourA.5 Abolition of child labourA.6 Adequate remunerationA.7 Adequate working timeA.8 Employment securityA.9 Social securityA.10 Professional developmentA.11 Job satisfaction

B. Local CommunityB.1 Safe & healthy living conditionsB.2 Respect of human rightsB.3 Respect of indigenous rightsB.4 Community engagementB.5 Maintaining & improving social

and economic opportunities

C. SocietyC.1 Public commitments to sustainability issuesC.2 Prevention of unjustifiable risksC.3 Employment creationC.4 Vocational trainingC.5 Anti-corruption effortsC.6 Social & environmental minimum standards

for suppliers and co-operation partnersC.7 Non-interference in sensitive political issuesC.8 Contribution to the national economic

developmentC.9 Prevention & mitigation of armed conflictsC.10 Transparent business informationC.11 Protection of intellectual property rights

D. Users / Consumers…

Developing Social Indicators

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d eQuantitative & Qualitative Indicators

Quantitative and qualitativeinformation of various sources

→ Companies→ Labour rights activists→ Internet-sources→ Expert judgements→ …

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d eThe Notebook Industry: Brandname-Companies

Brandname Headquarter

Dell USA No own production

Hewlett-Packard USA No own production

Lenovo (formerly IBM) China (formerly USA) No own production

Acer Taiwan No own production

Toshiba Japan No own production

Fujitsu-Siemens Japan & Germany Own production (high-end only)

NEC Japan No own production

Sony Japan Own production (high-end only)

Apple USA No own production

Asus (= Asustek) Taiwan Own production

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d eThe Notebook Industry: Assembly-Companies

Company Headquarter Production Sites Production volume 2006

Quanta Taiwan PR China 22.000.000

Compal Taiwan PR China 15.000.000

Wistron Taiwan PR China, Philippines 11.000.000

Inventec Taiwan PR China 7.000.000

Asustek Taiwan PR China 6.500.000

Mitac Taiwan PR China 2.500.000

Uniwill Taiwan PR China 2.200.000

FIC Taiwan PR China 2.000.000

Arima Taiwan PR China 1.300.000 – 1.600.000

Twinhead Taiwan PR China ca. 800.000

Clevo Taiwan PR China ca. 800.000

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d eThe Notebook Industry: Supplier-Structure

PR ChinaHong KongSanger

PR ChinaHong KongStrongwill

PR ChinaPR ChinaVina

PR ChinaPR ChinaJingyou

PR ChinaHong KongGold Peak

PR ChinaHong KongNew Sun

PR ChinaTaiwanGLW

PR ChinaTaiwanSimplo

ProductionHeadquarterCompany

Battery-block assembly:

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d eThe Notebook Industry: Supplier-Structure

Battery-cell manufacturing:

Company Headquarter Production Sites Market-share

Sanyo Japan Japan 28%

Sony Japan Japan, PR China 15%

Samsung SDI South-Korea South-Korea 12%

MBI Panasonic Japan Japan 12%

LG Chem South-Korea South-Korea, PR China 7%

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d eSocial Indicators (for Chinese Factories)

Workers:Remuneration: 690 RMB (= 69 Euro) per monthWorking hours: 196 hours / months officially, about 290 hours unofficiallyChild labour: no major problemForced labour: no major problemFreedom of association: not guaranteedSocial insurances: basic (legal obligations)Housing: Dormitories (8 persons per room)Discrimination: Young women preferredHealth & safety: Partly hazardous work in

component manufacturing

On product level:Remuneration: 1.0 – 2.0 Euro per notebook (assembly only)Working hours: 2.5 – 3.0 hours per notebook (assembly only)

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d eSome Problems & Findings

1.) Access to reliable data very difficult and time intensive→ 2,000 parts per notebook→ Nondisclosure widespread→ No sympathy of labour rights activists

“focus on improvements and not science”

2.) In assembly no differentiation of brands and products possible→ Same wages→ Same working hours→ Same treatment→ Products of engaged companies and those of free riders would

get the same ratings

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d eWay Out

1.) Use data and information of various sources→ Companies, labour rights activists,

newspapers, expert judgements…

2.) Focus on hot-spots→ health & safety in parts manufacturing→ labour intensive productions→ …

3.) Focus on improvements→ Evaluate on measures companies / governments / consumers could

imply to improve the situation

4.) Measure the companies’ engagement

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IMPROVE the handling of critical production processes(chemicals)

Measures towards FAIR electronics:

ALLOW independent reporting on working conditions(e.g. SA 8000)

ESTABLISH durable and trustful business relations betweenbrandname-companies, suppliers and sub-suppliers(→ investments in social and environmental standards should not lead to disadvantages)

ENCOURAGE workers to organise and participateTRAIN workers and management in labour rights issues

(→ national labour law, international standards (ILO))COMMUNICATE with the consumers

(→ positive marketing of fair and sustainable products)

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THANK YOU FOR YOUR ATTENTION !

Contact:

Dr. Rainer Grießhammer

+49 (0)761 – 45295 50

r.griesshammer@oeko.de

Andreas Manhart

+49 (0)761 – 45295 44

a.manhart@oeko.de