Microsoft Cites Chinese Factory Violations, but Questions Remain

Microsoft claims it investigated allegations of massive labor violations at a Chinese factory building its products, and took steps to fix conditions there. But the director of the National Labor Committee, the non-governmental organization that originally highlighted those factory conditions, says Microsoft's statements about the matter are too vague.

On April 13, the National Labor Committee issued a report accusing the KYE Systems factory in Dongguan City of several labor violations. "Over the past three years, unprecedented photographs of exhausted teenage workers, toiling and slumping asleep on their assembly line during break time, have been smuggled [out of the factory]," the report said. "Workers are paid 65 cents an hour, which falls to a take-home wage of 52 cents after deductions for factory food."

The report also cited lack of air conditioning during the hotter months, restricted freedom of speech and movement, and 15-hour workdays. Images allegedly taken inside the factory, and smuggled out over a period of three years, show makeshift dorms and, as mentioned above, young workers passed out at workstations. In addition to Microsoft, other clients of the facility include Hewlett-Packard, Acer and Best Buy.

According to the National Labor Committee report, Microsoft representatives visiting the factory were "always … accompanied by mid- and high-level managers. On these walk-throughs, U.S. company representatives hardly ever speak to the workers." KYE factory management purportedly removed underage workers from the facility ahead of government and corporate audits.

Within days of the report's issuance, Microsoft claimed it had commenced an investigation. "We take these claims seriously, and we will take appropriate remedial measures in regard to any findings of vendor misconduct," a spokesperson wrote in an April 14 e-mail to eWEEK.

A few days later, Chinese government officials announced the results of their own investigation, finding the factory had violated overtime regulations and underage-worker statutes.

In response to four eWEEK requests through May and June, however, Microsoft spokespeople said the company had nothing formal to report. Microsoft also declined to address why the company's previous audits had failed to reveal any workplace violations.

That changed in August, after a fifth request.

"Immediately after the NLC report was issued," Kevin Kutz, Microsoft's director of public affairs, told eWEEK in an e-mail Aug. 24, "we dispatched a team of Microsoft and third-party auditors to the KYE facility to conduct an investigative audit of the full scope of issues raised by the report, and to assess other areas related to working conditions, including labor, ethics, health, safety and environmental practices."

Those teams, according to Kutz, found "some issues" that violated Microsoft's Vendor Code of Conduct. "Working with KYE, we took corrective measures. We continue to monitor working conditions there on an ongoing basis and will address any further issues if they emerge," he wrote.

"Microsoft takes these claims very seriously," Kutz added. "Microsoft is committed to the fair treatment and safety of workers employed by our vendors, and to ensuring conformance with Microsoft policy."

When queried, the National Labor Committee found that statement unconvincing.

"It's so vague that it's meaningless," Charles Kernaghan, the organization's director, told eWEEK in an Aug. 30 phone interview. "In China, all you can possibly get is the dog-and-pony show. They know there's not going to be any open discussion with the workers."

Even sending an audit team into the factories, Kernaghan said, would be of relatively little use: "The workers would be so terrified and so well-trained as to how to respond, we'd just torture the workers more. There's nothing you can learn under circumstances like that."

A number of incidents in 2010, including a rash of suicides at the Foxconn factory in Shenzhen, China, have spotlighted the conditions under which workers manufacture devices for Apple, Microsoft, Dell, Sony and other tech companies. In response to adverse publicity, Foxconn owner Hon Hai Group reportedly agreed to raise workers' wages by 20 percent.

U.S. companies vary in the transparency and detail of their factory audits. For example, in 2010 Apple issued a supplier responsibility progress report that highlighted 17 violations of its Code of Conduct. That report, which can be found here, (PDF) draws on surveys of 102 facilities in countries including China, the Czech Republic, South Korea, Thailand and the United States.