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Microsoft Investigating Chinese Factory for Violations

Microsoft is sending a team of independent auditors to a factory in southern China to investigate allegations that the factory employs underage workers under appalling working and living conditions.

The decision to send inspectors, announced by Microsoft in a blog posting, was prompted by a National Labor Committee (NLC) report that alleges that teenage workers  sometimes as young as 14 years old -- work 15-hour shifts, six to seven days a week, for 52 cents an hour after deductions for factory food.

The non-profit NLC released its scathing report following three years of covert interviews and photography inside the KYE plant in Dongguan City. About 30 percent of the factory's work -- assembling and packaging hardware products -- is for Microsoft, according to the NLC.

Microsoft responded to the report with an April 15 blog posting by Brian Tobey, corporate vice president of manufacturing and operations for Microsoft's Entertainment & Devices division.

"We take very seriously our corporate responsibility to ensure that the manufacturing facilities and supply chain operations that we use comply with all relevant labor and safety requirements and ensure fair treatment of workers," Tobey wrote. "If we find that the factory is not adhering to our standards, we will take appropriate action."

The KYE factory, located in central Guangdong province, makes Microsoft-brand Life Cam VX-7000, Basic Optical Mouse and Wireless Notebook Laser Mouse 6000. The NLC states that other corporations outsourcing production to KYE include Hewlett Packard, Best Buy, Samsung, Foxconn, Acer, Wi/IFC/Logitech and Asus-Rd. The factory has about 3,000 workers.

The report includes photos, quotes and schedules. It details treatment by KYE factory management, including low pay, long hours, harassment, humiliation, restricted freedom, insufficient food and dismal living conditions. A teenage worker is quoted as saying, "We are like prisoners… We do not have a life, only work."

The report focuses on "work study" students, who were forced to stay for 15-hour shifts -- such as 7:45 a.m. to 10:55 p.m. In 2007 and 2008, when business was booming, dozens of the work study students were reported to be just 14 and 15 years old.

"These hours and conditions are blatantly illegal," the report states. "Under China's laws, 14- and 15-year-olds may not work, while 16- and 17-year-olds are classified as ‘non-adult' workers, who cannot work more than eight hours a day."

According to the report, conditions for work study students improved slightly after the recession hit China. In 2009, no 14 or 15-year-olds were hired, and, while 16- and 17-year-olds were still made to work 12 hours a day, they were given one day a week off.

The factory opened in 2002, and the NLC suggests Microsoft has been outsourcing production to the KYE factory since at least 2003. The NLC documents substandard factory conditions extending back to at least 2007.

As part of Microsoft's ongoing supplier Social and Environmental Accountability (SEA) program, an independent auditor has been inspecting the KYE factory annually, according to Tobey. In addition, he wrote that Microsoft personnel conduct quarterly on-site assessments and receive weekly reports from KYE on safety and labor criteria.

"Over the past two years, we have required documentation and verification of worker age, and no incidence of child labor has been detected," Tobey wrote. "Worker overtime has been significantly reduced, and worker compensation is in line with the Electronic Industry Citizenship Coalition standards for the Dongguan area."

Experts, however, say that monitoring does not work.

The NLC report quotes John Ruggia, the United Nations Special Representative of the Secretary General on human rights and transnational corporations and other business enterprises: "Just about everyone, at least off the record, will tell you that monitoring doesn't work because people cheat."

Workers at the KYE factory told the NLC that Microsoft representatives had visited and walked through the plant, always being accompanied by plant managers and rarely speaking to the workers.

"The workers have no rights, as every single labor law in China is violated," according to the report. "Microsoft's and other companies' codes of conduct have zero impact."

The NLC's director, Charles Kernaghan, told Fast Company in an interview that Microsoft has ignored the factory's abuses for almost seven years and failed to use its might to force compliance with basic human rights.

"This is really a battle as to what models of manufacturing are going to win out," Kernaghan told Fast Company. "Right now, I think Microsoft is putting all of its bets on China. And they are very comfortable with teenagers working in a factory 15 hours a day for $.52 an hour, housed in miserable dormitories. We're being confronted with how the world is going to operate."

Microsoft's Vendor Guidelines and Vendor Code of Conduct are on the Microsoft corporate site. Measures for violations of the code include retraining and termination of the business relationship.

About the Author

Natasha Watkins is a New York-based freelance writer specializing in technology and business topics.

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