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February 11, 2013

HP Plans to Watch Suppliers More Closely with New Rules

Hewlett-Packard (News - Alert) announced on Friday that it would be putting more limits on its Chinese suppliers in terms of their use – or indeed, abuse – of certain Chinese labor laws that allow for different rules on temporary workers and student interns.

While the actual execution of this stance is somewhat unclear, it is proof that HP, and several firms like it, are starting to take the issue of Chinese labor seriously.

The issue in question surrounds a loophole in a Chinese labor law, by which vocational school students and temporary workers can be paid less than normal workers, leading to their wide use as supplementary labor in factories, working not only for less money but for longer hours than their counterparts.

This alone might raise some eyebrows, but perhaps worse is that, should these temporary workers and vocational school students decide to quit, there are often reprisals involved.

Back in October, reports from Hon Hai Precision Industry – perhaps more infamously known as Foxconn – emerged that said workers as young as 14 were "interns" at one of its plants.

HP, meanwhile, responded to the reports with limits on the total number of student workers, as well as a requirement that those students employed as laborers be working at jobs that have something to do with their course of study. HP also called for an end to reprisals, and access to mechanisms through which employees could file grievances, again, without reprisals.

HP plans to conduct regular audits to ensure the new rules are being followed.

Apple (News - Alert), and even the Chinese government, announced similar plans to provide more severe punishment to factories using such methods.

Of course, the actual execution of these new rules may prove somewhat difficult in the end. Factories in China are known for ignoring Chinese law, with suppliers calling all placements "voluntary." While the student workers may have something different to say, the reprisal-rich response mechanisms prevent many of the students from actually saying something, and in turn, destroying their careers with it.

Since many vocational schools, at last report, use internships as a requirement for graduation, this often forces students to step into these jobs, for which they are paid less than normal, yet from which the company derives no less benefit.

Labor groups even assert that HP, Apple and similar firms are making the problem themselves, paying as little as possible to suppliers and forcing suppliers to find ways to pay workers still less.

The issue itself is a thorny one that represents a lot of problems; just how much meddling can American firms do in Chinese society? Should they even be trying these measures? How much of these problems really are the fault of the American firms doing business in China? These issues will be part of the overall landscape for some time to come, and likely have little in the way of simple solution.

Still, it's a problem that fairly well cries out for a solution.




Edited by Braden Becker
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