The tightrope between production, industrial peace

#GS4 #ETHICS

Apple’s decision to place its Taiwanese supplier, Wistron Corp., on probation by not giving new orders - after an audit of the serious lapses in labour practices that led to violence in its facility in Narasapura in Karnataka - is a step forward in corporate accountability and ethical business operations. 

  • Pressured by Apple’s response, Wistron has also been forced to apologise to the workers, remove its Vice-President in charge of India operations, and initiate corrective measures to address workers’ grievances.

 

Realities of manufacturing

  • That it took violence - images of which were further amplified in news and social media - for the workers to be ‘seen’ and ‘heard’, and for corrections to be undertaken (measures that needed to be in place at the workplace from the outset), points to the realities of high-tech manufacturing outsourced through supply chains in the global south that is built on precarities of labour involved in them. 
  • In fact, many of the suppliers subcontracting in the high-end electronics sector including those for Apple, have been involved in wilful violations of labour standards and practices.
  • It is pertinent to note that unlike the present case, other cases of violent labour contentions in units manufacturing and assembling high-end technological devices in India in the recent past have received scant attention; for instance, two incidents in subcontracting firms assembling smartphones for Chinese brands in the Delhi National Capital Region in 2017 and 2018.
  • Until recently, the default response of the brands has been evasion of responsibility by either shifting the onus to the subcontracting firms or keeping things in silent mode. The prevailing norms of work arrangements practised by the suppliers themselves downstream, was through hired labour from multiple subcontractors/third party work supply firms (the workers at the Narasapura facility, a majority of them young, were sourced from supposedly six subcontractors). 
  • This process creates ambiguity in identifying the primary employer and thereby, seriously constrains the workers from getting effective redress of their grievances.

 

The China experience

  • The labour contention and the resultant violence at the Wistron facility can be comprehended better by taking into cognisance the operations of Taiwanese suppliers/subcontractors over the years in China, manufacturing high-end electronics devices for big brands including Apple.
  • The foremost in this list is Foxconn. Riding on the global transformation of industrial production and increased outsourcing by corporate giants in the United States, Europe and East Asia, as part of the strategies of maintaining lean workforces, the unlimited supply of rural migrant labour at low wage levels, and the Chinese economic reforms propelled the creation of offshore assembly facilities. 
  • Further, the huge potential of the Chinese consumer market along with increased investment by the Chinese diaspora also played a role in facilitating the decision, which was further solidified by China joining the World Trade Organization in 2001.
  • Beginning initially from the coast in southern China, these suppliers have gradually expanded across the Mainland, supported by lavish incentives, infrastructural support and preferential policies of local governments, who are eager to showcase development and whose officials’ career progression is indexed to the levels of economic progress.

 

Much trauma for workers

  • As Apple and other brands churn out ‘smart’ devices at increased speeds, and with tight timelines 24x7, the burden falls literally on the shoulders of the workers employed in the supplier factories, forcing them to work under harsh conditions, doing overtime, long tiring shifts without much breaks, and under constant disciplinary monitoring by supervisors. 
  • The regimented work practices on the assembly line are matched by low pay and little or no social security, leading to strain and traumatic experiences, both physical and mental.
  • In 2010, Foxconn was faced with a spate of suicides by workers across its facilities in China, thus pressurising Apple to diversify its range of suppliers - wire netting to prevent workers from jumping off terraces is a common sight in Chinese factories and industrial facilities even today.
  • Another prevalent phenomenon is that of unpaid, forced student internships to fill shortages in labour supply and offset costs; students from vocational educational institutions are compulsorily employed, and subjected to the same exploitative conditions as the workers. 
  • Since they are not legally classified as workers, there are no obligations to offer social protections. 
  • The supply of student-workers is encouraged by local governments, since they are dependent on the suppliers’ support for resources, due to China’s skewed tax and revenue structure favouring the central government. 

 

Safeguards vs. investments

  • That many of these exploitative labour practices and violations of safeguards could be carried over when these facilities move into the Indian terrain is illustrated by the occurrence in the Wistron facility. 
  • In fact, when they combine with the precarities already embedded in India’s manufacturing sector, the consequences are debilitating for labour. 
  • This becomes all the more pertinent, in the backdrop of increasing keenness of governments in India to attract Taiwanese investments. 
  • However, given the weak legal-regulatory labour architecture and capacities, comprehensive supervision and control of the foreign invested enterprises looks a bridge too far. 
  • The passing of the new labour codes further erodes existing modicum of labour protection. The fear of ‘flight of capital’, coupled with weak state capacity in supervision make state administrations reluctant to step in unless things escalate.

 

Prognosis ahead

  • Increasingly, following pressure from the consumers’ side and also being highly conscious of its brand image, Apple has provided a ‘Code of Conduct’ to all its suppliers, seeking to monitor and audit compliance of labour standards and safeguards. 
  • However, as demonstrated through the latest incident, there has been no strict adherence to this effect, thereby pointing to the tough balance that needs to be maintained between fulfilling production targets and ensuring industrial peace.
  • In the absence of avenues for workers to channelise their grievances - representative associations and unions - and adequate collective bargaining mechanisms as well as social dialogue, frequent labour unrest including to the extent of violent confrontations, could very well be a daily reality in these high-end manufacturing facilities.
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