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Australian Baptists Grade Ethics of Electronics Companies

Baptist World Aid Australia released a report this week grading electronics companies based on their ethical practices.
Practices used included paying a living wage, protecting workers and ethically sourcing materials.

The grades were not good, as no company received an “A” and only one received partial credit for paying a living wage.

Although the Ethical Electronics Guide evaluates electronic companies doing business in Australia, many of those graded are international companies that also do business in the U.S. and elsewhere.

Baptist World Aid Australia, the aid and development arm of Australian Baptist Ministries (formerly known as the Baptist Union of Australia), created the report along with Not for Sale, an advocacy organization fighting human trafficking and slavery.

The report also was produced with support from the International Labor Rights Forum and a grant from the U.S. Department of State.

Based on nearly two years of research, the report is the second in the “Behind the Barcode” series on corporate ethics. The first report, released last August, graded fashion companies.

The newest report offers grades for 39 electronics companies regarding their social responsibility based on four categories: policies, traceability/transparency, monitoring/training and worker rights.

The highest grade given was a “B+” and the median was a “C-.” Thirteen companies received grades in the “B” range, 11 received grades in the “C” range, 13 received grades in the “D” range, and two received a grade of “F.”

Only Nokia, one of four companies who received a “B+,” received any credit for paying workers a living wage.

The other three companies receiving the “B+” rating were LG Electronics, Microsoft and Apple. The two companies receiving an “F” were Hisense and Palsonic.

Some other grades among the better-known companies:

â—     Acer (B-)

â—     Cannon (D-)

â—     Dell (B-)

â—     Fujitsu (D+)

â—     Garmin (C)

â—     Hewlett-Packard (B)

â—     Hitachi (C)

â—     HTC (D)

â—     IBM (C-)

â—     Intel (B)

â—     Amazon Kindle (D)

â—     Lenovo (D-)

â—     Nintendo (D)

â—     Olympus (B-)

â—     Oracle (D)

â—     Panasonic (B)

â—     Philips (C+)

â—     Samsung (B)

â—     SanDisk (C-)

â—     Sony (C)

â—     TomTom (C)

â—     Toshiba (B-)

The grading methodology examined each phase of the production process, including the extraction of materials, the smelting and refining, the manufacturing of components, and the final manufacturing.

Companies were, therefore, held accountable not only for their own practices and policies but also those of their suppliers.

The extraction phase overall received the fewest positive marks. In fact, only 18 percent of the companies had even partial knowledge of the sources of their raw materials.

Concerns about child and forced labor, particularly during the extraction of minerals, received attention on several pages of the 35-page report.

“Product supply chains are particularly susceptible to the presence of slavery and exploitation when little or no responsibility is taken by companies to protect worker rights upstream in the supply chain,” the report warned.

“Electronics companies have great potential to bring substantial benefits to the countries in which they operate,” the report said. “For developing countries, the investment, technology, job opportunities, skills and tax revenues that accompany their operations can be critical in helping their citizens overcome poverty. However, without adequate safeguards many of these benefits will not fully materialize and workers may be exploited or even enslaved.”

Gerson Nimbalker, advocacy manager of Baptist World Aid Australia, noted that if electronics companies provided a living wage to workers, it would only barely increase the price of products for consumers.

“Workers in developing countries work long hours in often oppressive conditions to make the phones, TVs and tablets that we enjoy,” he explained. “The additional cost to ensure that they are rewarded for their efforts with a wage that is sufficient for them and their families to live is only a few dollars per product. By some estimates, as little as two to nine dollars per smartphone or less than 1.5 percent of the total price.”

Yet, 97 percent of the electronics companies studied failed to provide a living wage to workers.

The electronics industry’s grades are much worse than what the first “Behind the Barcode” report gave the fashion industry last summer.

Like the Ethical Fashion Guide, the electronics report is designed to help consumers “to ‘vote with their wallets’ and advocate for better business practices.”

Baptist World Aid Australia hopes the report will spark greater consumer attention to ethical issues and that “in the future, better standard practices will enable us to grade companies on a more rigorous curve.”

Brian Kaylor is a contributing editor for EthicsDaily.com. You can follow him on Twitter @BrianKaylor.