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How can I make sure my China supplier complies with local & international labour laws and regulations?

Posted: 2012-05-22

Full Question

Do Chinese factories have labour unions and does the government keep records of complaints from workers for a specific factory? Our company wants to make sure that the suppliers comply with local and international law (regarding forced labour, working time, etc.) and we think our social audit might be not be enough to find out the real situation.

Answer

Factories over a certain size are required to have a labour union. But the unions here are very different than the concept in N. America or Europe. They are not very adversarial and don't really serve as collective bargaining tool to represent the workers and gain concessions from factory boss. They may offer suggestions and complaints, but that doesn't mean management is forced to take the advice. Because they don't have much power in the relationship (more and more power each year, but still not powerful like a French union) it is rare they would go outside to the government to express a complaint. Disgruntled employees may go to the government as individuals, but very rare that the union leader would make the complaint. So if you are trying to understand how your supplier treats their staff, talking to the union rep or local government would most likely not give you a good snap shot of what is happening since the union, government and factory owners are often working in a close and mutually benefiting relationship.

Social Audits only cost a few hundred USD and are a great tool at catching any big red flags - forced labor, dangerous work conditions. I would agree with you that a social audit might not be enough to find out the real situation in terms of wages paid and hours worked. For example, when your auditors arrive, even if un-announced, the line workers know that the factory management is watching what they say to the auditors. They may have even been training what to say to auditors.

The only tool I know to really understand what is happening inside the factory is to take a look from the inside of the factory. In other words, go undercover to get the truth. Many buyers don't realize there are investigators who for a reasonable fee can discreetly conduct business intelligence. They interview staff in private after work and sometimes even go into the factory undercover as foreign buyers or Chinese employees. The best part is that the factory doesn't even know they are being watched and you get the real take on the situation.

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