Microsoft's Chinese Factory Inspection Could Prove Ineffective

Microsoft has promised to dispatch an investigative team to a Chinese factory allegedly engaged in workplace violations, with a full audit to be conducted the week of April 19. However, the National Labor Committee report that sparked Microsoft's action also documents how the KYE factory in Dongguan has a supposed history, according to its sources, of covering up violations such as the use of underage workers ahead of both government and corporate audits. That report also alleges that workers are coached on what to say to auditors before their arrival. Microsoft insists it has been monitoring workplace conditions at the factory on a regular basis.

Microsoft announced plans April 15 to investigate allegations of labor violations at a Chinese factory building its products, in response to an April 13 report by the National Labor Committee. However, that same report suggests the factory's management has a system for disguising potential violations before audits, putting into doubt the efficacy of any investigation.

The National Labor Committee, a nonprofit nongovernmental organization (NGO) that seeks to draw attention to labor and human rights abuses, documented workplace abuses at the KYE factory in Dongguan City that range from excessive working hours and harassment by security guards to restricted freedom of movement and inability to use the bathroom during their shift. The report, which quotes one unnamed worker as saying, "We are like prisoners," can be found here.
Microsoft insists that it has been auditing the situation at the KYE factory on a regular basis, and that it has dispatched an investigative team to the facility to review the veracity of the National Labor Committee's report.

"We should note that as part of Microsoft's ongoing supplier SEA (Social and Environmental Accountability) program, an independent auditor has been inspecting the KYE factory annually," Brian Tobey, corporate vice president of manufacturing and operations for Microsoft's Entertainment & Devices division, wrote in an April 15 posting on the Official Microsoft Blog. "In addition, Microsoft personnel conduct quarterly on-site assessments, and receive weekly reports from KYE on key labor and safety criteria that we monitor as part of our supplier SEA program."

Over the past two years, Tobey continued, "we have required documentation and verification of worker age, and no incidence of child labor has been detected. Worker overtime has been significantly reduced, and worker compensation is in line with the Electronic Industry Citizenship Coalition standards for the Dongguan area."

That runs contrary to the National Labor Committee report, which documents substandard factory conditions extending back to at least 2007.

Tobey also stated that a "comprehensive on-site audit of the facility will be conducted next week, with the specific goal of investigating the allegations raised in the NLC report." Monitors will apparently be present at the KYE factory until that investigation's conclusion.

Microsoft's Vendor Guidelines and Vendor Code of Conduct can be found on this corporate site. The company's remedial measures for vendor violations of the code apparently include retraining and termination of the business relationship.

The question becomes whether such monitoring actually works. The National Labor Committee's report devotes a chapter to government and corporate audits of the KYE factory facility, describing how "someone in KYE management was alerted with sufficient time to round up the hundreds of workers who were under 18 years old" ahead of a supposedly unannounced government visit.

Microsoft representatives who visited the factory, according to the report, were "always ... accompanied by mid- and high-level managers. On these walk-throughs, U.S. company representatives hardly ever speak to the workers." Ahead of corporate audits, workers are apparently coached about what to say with regard to working conditions, dorms, meals and shift length.

Images accompanying the report were apparently smuggled out of the KYE factory "over the last three years" and show makeshift dorms and young workers passed out at their stations.

A Microsoft spokesperson declined to answer eWEEK's questions about why the company's previous audits might have failed to reveal any workplace violations, instead referring to Tobey's blog posting. If the National Labor Committee report's description of KYE management's response to investigations holds true, though, then the factory has ample time to prepare a response to an audit.

Other tech companies have experienced similar controversy over their Chinese vendors within the past year. In a 2009 audit, Apple found 17 violations of its Code of Conduct in a review of 102 facilities. Additionally, a July 2009 engineer suicide at Foxconn, which manufactures the Apple iPhone and iPod, raised an issue over workplace conditions there.