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Bribery claims call Chinese labour audits into question

China Labor Watch tells Congress of "severe flaws"

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Labour rights groups have warned a US Congressional hearing that severe flaws in the auditing process of technology production facilities in China threaten to undermine the efforts of big name tech brands to ensure their kit is produced in legal and humane conditions.

Li Qiang, founder of non-governmental organisation China Labor Watch, spoke at a sympathetic hearing of the Congressional-Executive Commission on China (CECC) and told of widespread corruption in such social responsibility audits.

“In addition to what we found in Apple supplier plants, bad working conditions exist in supply plants for HP, Dell and Samsung. These multi-national corporations do have an audit system however I think the audit systems are severely flawed,” he said.

“According to my very conservative estimates, over 10,000 audits are conducted for over 30,000 plants. Normally, recommendations in the audit reports would require investments of millions of dollars, so the multi-nationals would, more often than not, bribe the auditing companies by giving them $3,000 or so to avoid making the investment to make the improvements.”

Li fell short of accusing maning tech brands he felt are involved in such bribery practices, although he pointed the finger at Intertek, a multi-national auditing company with recent half yearly revenues in excess of £900m.

After being investigated by CLW, the firm was found to have accepted bribes from a toy manufacturer client in the past, he explained.

When contacted by The Reg, Li revealed that Samsung is an Intertek client, and that the firm also audits for electronic industry citizenship coalition (EICC) members, which include over 60 of the world’s biggest tech brands and ODMs.

“Of course the audit reports are made up of facts, however, they ignore some of the facts,” he said.

“It’s my view that it’s the responsibility of the MNCs to change the working conditions in China. In addition to urging the Chinese government to do something about this we need to put pressure on MNCs as well.”

It’s not hard to see the logic in Li’s arguments. After a recent scandal involving alleged appalling conditions at a Chinese factory run by manufacturer VTech, clients including Telstra and Philips needed only a week or so to satisfy their investigations teams that all was in fact well in the plant.

However, the extent of the irregular auditing practices claimed by Li and the complicity of the multi national tech firms involved will be very difficult to prove.

At the time of writing, The Reg was still waiting to hear back from Intertek, Apple, Dell, Samsung and HP.

However, not-for-profits which have been digging around in these factories for years now were keen to comment.

Geoff Crothall, a spokesman for Hong Kong-based China Labour Bulletin, argued that the auditing process is a glorified public relations exercise “and certainly not a genuine insight into working conditions”.

“I'm not sure bribery is necessarily the right word, collusion is probably more accurate,” he told El Reg.

“Audit companies know what brands want to hear and provide the desired results. The same goes for the supplier factories who all know the correct answers expected from them. The auditing process is of very limited value.”

Debby Chan, a project officer at SACOM who exposed alleged malpractice at Apple ODM Foxconn, argued that bribery is only part of the problem with audits and that the root problem is the absence of genuine trade unions in China.

“Workers always report that the factories know about the inspections in advance and will prepare for the audits. They will have tactics to hide the problems,” she told The Register.

“Even if there is an honest report from the auditors, who can guarantee those problems are being fixed? There is no transparency at all.” ®

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