Dive Brief:
- Temporary workers employed through a staffing agency (known as dispatch workers) suffer working conditions illegal under Chinese law and are inadequately trained in safety measures at a Foxconn manufacturing plant in Hengyang, China that makes mostly Amazon devices, according to a report from China Labor Watch. Some 40% of the off-season workforce were dispatch workers, contrary to Chinese labor law stipulating that their numbers must not exceed 10%.
- While regular workers at the factory fare better — with superior wages and training — all workers are underpaid, especially during the off-season, and all are subject to illegal overtime requirements, safety hazards and verbal abuse, according to the report. Requests for comment from Foxconn Technology Group weren’t immediately returned to Retail Dive, but a statement has appeared in multiple news outlets: "We are carrying out a full investigation of the areas raised by that report, and if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct."
- An Amazon spokesperson told Retail Dive in an email that it, too, previously found "issues of concern" during an audit of its own, but didn’t reveal specifics: "Amazon takes reported violations of our Supplier Code of Conduct extremely seriously. Amazon regularly assesses suppliers, using independent auditors as appropriate, to monitor continued compliance and improvement. In the case of the Foxconn Hengyang factory, Amazon completed its most recent audit in March 2018 and identified two issues of concern. We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments to monitor for implementation and compliance with our Supplier Code of Conduct. We are committed to ensuring that these issues are resolved."
Dive Insight:
Amazon’s ongoing disruption of the retail industry has been the shiny object attracting most observers’ interest for years now, but reports of brutal working conditions in its warehouses and corporate offices have dulled that from time to time. Mistreatment of contract workers, hired through temp staffing agencies, has been an issue at home as well as in China, as described by this new report.
Most recently, Amazon was found to be among the top 20 companies with the most employees enrolled in the federal Supplemental Nutrition Assistance Program (commonly known as food stamps), although the e-commerce giant disputed that in an interview with Retail Dive.
Overseas apparel production is most notorious for inhumane working conditions, and problems continue to be discovered despite the acknowledgement of several major U.S. and European brands that the factories sourcing their goods continue to fail audits and defy labor laws in their own countries. The deadly collapse of the Rana Plaza factory in Bangladesh in 2013, which killed more than a thousand people and sparked much hand-wringing and pledges for improvements from brands, seems to have barely moved the needle on reform.
Electronics manufacturing remains mostly centered in China where labor conditions aren't quite so drastic as they are in apparel production in countries like Myanmar and Bangladesh. But Foxconn, which is also a major supplier for Apple, and other manufacturers in the space consistently receive poor marks for working conditions and pay.
From August 2017 to April this year, China Labor Watch dispatched several investigators into Hengyang Foxconn, which mostly manufactures Kindle, Echo Dots and tablets for Amazon. Investigators uncovered particularly unfair treatment of dispatch workers, despite 2014 regulations in China governing their employment and treatment, and said it's an issue not just at Foxconn, but at manufacturers across China.
"As dispatch labor remains widely used because of its flexibility, factories continue to abdicate their legal responsibilities as a way to cut down on labor costs," according to the report. "With the dispatch company being contractually obligated to the worker, this allows factories to shirk responsibility for labor rights abuses. Amazon has the ability to not only ensure its supplier factories respect the rights of workers but also that there is equal pay for equal work. Amazon’s profits have come at the expense of workers who labor in appalling working conditions and have no choice but to work excessive overtime hours to sustain a livelihood."
