Foxconn Technology Group said on Sunday that it is investigating its Chinese factory that makes Amazon devices, after new evidence from the New York-based China Labor Watch exposed the “unethical and illegal” working conditions at the manufacturing plant.
“We are carrying out a full investigation of the areas raised by the report, and if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct,” Taiwan-based Foxconn, also known as Hon Hai Precision Industry Co., Ltd., explained to Reuters.
A 94-page report released by China Labor Watch — conducted a nine-month investigation of working conditions at the factory in the city of Hengyang operated by Foxconn, which manufactures Amazon’s Kindle, Echo smart speaker, Echo Dots, and an array of tablets.
Amazon Echo Dot, and inset, the Hengyang Foxconn factory in which it is made. ( Source: Amazon/China Labour Watch)
During the investigation, the advocacy group said it discovered that dispatch workers made up more than 40 percent of the Hengyang Foxconn’s workforce, a significant rights violation of the legally mandated 10 percent ceiling. Dispatch workers were also treated very differently than regular workers, the report explains how regular workers receive extra sums of money for overtime hours, and their wages are well above the standard of living; however, dispatch workers earn 14.5 RMB/hour (USD 2.26) with no extra pay for overtime.
“They were underpaid,” Lu said. “That’s illegal.”
China Labor Watch provides a full summary of the rights violations at Hengyang Foxconn plant:
The investigation took place during the factory’s off-season and it was discovered around 40% of the total number of workers were dispatch workers. Chinese labor law stipulates that dispatch workers must not exceed 10% of the total workforce.
Before starting work, dispatch workers need to pay 50 RMB ($7.86 USD) to cover physical examination fees. Some regular workers reported having to pay 60 RMB ($9.47 USD) for the physical examination, while others did not pay any fees.
Chinese law stipulates pre-job training to be at least 24 hours, however, dispatch workers only receive eight hours of pre-job safety training.
Many dispatch workers do not receive a copy of their labor contract.
Sick leave is unpaid for dispatch workers. Regular workers have 20% deducted from their day’s wages for sick leave.
Dormitories for both regular and dispatch workers do not have emergency exits. The dormitory area for dispatch workers does not have a fire extinguisher and escape routes are not labelled. Fire drills are not performed in the dormitory area.
Workers are required to arrive to their work positions ten minutes before their shift starts and these ten minutes are uncompensated.
During each month of peak production season, workers have to put in over 100 hours of overtime. However, Chinese law stipulates monthly overtime cannot exceed 36 hours. During peak season, there was an instance of workers working 14 days continuously without a day off.
During off-season, the factory schedules dispatch workers to go on leave, resulting in these workers having no wages. Additionally, the factory management will schedule no overtime for regular workers. Due to their low wages, by not allowing workers to work overtime, it forces workers to resign of their own volition. If workers are late, have an unexcused absence, or are on sick leave, the production line leader will also reduce their number of overtime hours. Due to a low base wage, it is a punishment for workers to not be able to work overtime during off-peak season.
Workers earn an hourly wage of 14.5 RMB ($2.26 USD) regardless of whether they worked normal hours or overtime hours, which includes a 1 RMB ($0.16 USD) attendance bonus. If the worker takes more than two days off or if they are late more than twice a month, their month’s wages would be calculated by a 13.5 RMB/hour ($2.11 USD) standard.
Workers do not earn enough to maintain a decent standard of living during off-season. During off season, on average, regular workers earn 2,000 RMB ($312.12 USD) a month and dispatch workers earn 2,500 RMB ($390.16 USD) a month. The average monthly wage in Hengyang in 2017 was 4,647 RMB ($725.22 USD)
In a recent press statement, Amazon said it thoroughly audited the Hengyang factory in March and asked Foxconn to address “issues of concern” related to dispatch workers and overtime.
“Amazon takes reported violations of our Supplier Code of Conduct extremely seriously. Amazon regularly assesses suppliers, using independent auditors as appropriate, to monitor continued compliance and improvement. In the case of the Foxconn Hengyang factory, Amazon completed its most recent audit in March 2018 and identified two issues of concern. We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments to monitor for implementation and compliance with our Supplier Code of Conduct. We are committed to ensuring that these issues are resolved.”
However, this is not the first time a Foxconn manufacturing facility has been criticized for lousy working conditions. In 2010, the company’s factory in Shenzhen which manufactures Apple’s iPhones saw an increased rate of worker suicides, due to illegal working conditions. Although Foxconn promised that it would improve conditions, however, in 2012, around 150 workers threatened their managers with suicide, if wages were not raised.
Foxconn said in an earlier statement that it “works hard to comply with all relevant laws and regulations” where it operates and conducts regular audits. “If infractions are identified, we work to immediately rectify them,” the statement said.
It seems as this could be bad news for Amazon founder and CEO Jeff Bezos, who has recently become the world’s wealthiest man on the backs of disrupting America’s retail industry, along with exploiting cheap labor to produce Amazon products.