Millions in Danish tax money can end up supporting harsh exploitation of Chinese workers

5. Nov 2013

Conditions at DELL, a major supplier to National Procurement Ltd. Denmark, are highly questionable.

The purchasing consortium of the Danish state and municipalities, National Procurement Ltd. Denmark (SKI), administering millions in tax money, has a range of ethical demands in their contracts. But it is not always they are respected.

Workers facing weeks of up to 74 hours, threats to be fined for mistakes and forced overtime, for a wage much under the Chinese minimum: this is the norm at DELL’s suppliers in the Chinese provinces of Guangdong and Jiangsu. Here the workers breathe in chemical fumes all day long, while they assemble components for computers that will land, among other places, on the state and municipalities’ desks in Denmark. DanWatch has been to China and has spoken to workers from four of the factories which supply DELL. A report by China Labor Watch supports DanWatch’s findings.
“When companies compete on supplying computers in the cheapest way possible, and when our public buyers aim for the cheapest wares on the market, a high human cost is paid. Our research shows that the conditions at DELL’s suppliers violate ILO conventions and Chinese labor law as well as DELL’s own policy,” says Eva Hesse Lundström, editor of DanWatch.

SKI does not demand documentation

National Procurement Ltd., Denmark (SKI), which supplies computers to the Danish state and municipalities, signed a contract with DELL for 50 million kroner in 2013. SKI demands that the suppliers respect national laws and the ten principles formulated by the UN’s Global Compact, including a ban on discrimination in hiring and on the workplace. SKI, however, does not as a rule ask them to document that the demands have been implemented, because Dell in their contracts with SKI commits to disclose any violations of for example workers’ rights in the making of products supplied to SKI.

“All our suppliers have a duty of notification. This means that if they have knowledge of knowledge of conditions that go against the contract they have made with us, they are required to to disclose them. All suppliers of SKI are legally required to comply with our CSR standards, and we make sure we secure their attention from thia side, as it is common knownledge that SKI enforces its contracts,” explains Administrative Director of SKI, Signe Lynggaard Madsen, adding: “But of course, we will also react when suspicions such as these arise.”

DELL finds violations of its own standards

The reports by DanWatch and China Labor Watch are not the only ones to show that working conditions at DELL’s suppliers deserve to be decried. When presented with DanWatch’s investigation, Deborah Albers, Principal Social Strategist at DELL, tells that three of the four suppliers in the report were audited recently. Here, the US-owned electronics company itself found conditions that violated the selfsame standards DELL applies to itself by adhering to the Electronic Industry Citizen Coalition (EICC), a coalition of electronics companies which focus on corporate social responsibility in the industry.
“Most audits found conditions which were not in accordance with EICC’s Code of Conduct, and therefore we will undertake some initiatives to rectify those conditions. If there are conditions which are not included in the findings of our own audits, such as the ones DanWatch reported, our Supply Chain Social & Environmental Responsibility (SCSER) will investigate them,” says Deborah Albers, and tells us that later in the year an audit will be conducted on the fourth supplier’s site.
The electronics company’s own CSR report from June 2013 states very clearly that on 61 % of the announced audits Dell itself conducted on its suppliers, excessive overtime was reported, and in 18% it was pointed out that workplace safety was not up to standards.

SKI demands explanation from Dell

Even though Dell’s own audits document that working condition at their factories do not live up to their own standards or SKI’s, they have not informed SKI. And SKI has not read Dell’s publicly available CSR report. Instead, SKI will ask Dell to produce documentation to ensure that the company lives up to its agreeement with SKI on complying with the standards stated in the contract between SKI and Dell.

“DanWatch’s report raises suspicions which we take very seriously. We will study the report further in the upcoming period. We set our CSR standards very high, and we have therefore already asked the company in question to show evidence that the goods they sell through our agreements are living up to the CSR demands, among them the UN Global Compact and the ILO conventions,” says SKI Administrative Director Signe Lynggaard Madsen.

Contracts can be annulled

SKI will now study the documentation presented by DanWatch and assess which steps are to be taken:

“When our suppliers respond to us, we will assess the case. Ultimately, if the supplier does not make sure that the conditions are met, it can lead to the annulment of the contract, but it is too early to draw conclusions,” says Signe Lynggaard Madsen.