Microsoft investigates as sweatshop spotlight shines on supplier

Ars Technica  |  April 15, 2010  |  Link to article

The conditions at factories in China are known to be particularly abysmal. A recent report by the National Labor Committee focuses on KYE Factory, which seems to be breaking every rule imaginable. According to worker estimates, Microsoft accounts for the largest proportion of production at KYE, at about 30 percent. Other major corporations outsourcing production to KYE include Hewlett Packard, Best Buy, Samsung, Foxconn, Acer, Wi/IFC/Logitech, and Asus-Rd. For its part, Microsoft says it is investigating the environment outlined in the report.

Life at KYE

The report says that the workers have virtually no rights, every single labor law in China is violated, and codes of conduct like those of Microsoft and HP have zero impact. Over the past three years, photographs showing exhausted teenaged workers have been smuggled out of the KYE factory, along with worker interviews and accounts. Smuggling was necessary because factory management prohibits anyone, including clients like Microsoft, from taking pictures inside the factory or in the workers' primitive and dirty dorm rooms.

KYE recruits hundreds of "work study students" as young as 16 or 17 years old (in 2007 and 2008, dozens of them were reported to be just 14 or 15). Management likes the high school students since they are easy to discipline and control. For the same reason, KYE prefers to hire women 18 to 25 years of age, who are often sexually harassed by security guards, according to NLC.

These students have mandatory 15-hour shifts (typically from 7:45am to 10:55pm), six or seven days a week. Fourteen workers share each primitive dorm room, and must buy their own mattresses and bedding or else sleep on 28-inch-wide plywood boards. Workers are paid 65¢ hour, which is actually 52¢ an hour after deductions for factory food (described as awful).

Not only are the hours long and the pay poor, but the work pace is grueling as workers have to complete their mandatory production goals. NLC reports that 20 or 30 workers on a line must complete 2,000 Microsoft mice in 12 hours. Once workers meet the production goal, the management raises it. The new goal is difficult to meet due to exhaustion, but also because many suffer abrasions and cuts on their fingers since the small pieces must be inserted very closely together. In addition to mice, others work on Microsoft LifeCams and Microsoft Xbox hardware, which is eventually sold in the US, Europe, and Japan.

In the summer, when factory temperatures reach up to 86 degrees, workers are drenched in sweat (when foreign clients arrive, management turns on the air conditioning). Furthermore, the factory is very crowded; nearly 1,000 workers were once squeezed into a 105 by 105 feet room. To make matters worse, workers are prohibited from talking, listening to music, or using the bathroom during working hours. Workers who make mistakes are ordered to clean the bathrooms. They can only leave the factory compound during regulated hours.

Microsoft's stance

"Microsoft is committed to the fair treatment and safety of workers employed by our vendors," a Microsoft spokesperson told Ars. "Microsoft has invested heavily in a vendor accountability program and robust independent third-party auditing program to ensure conformance to the Microsoft Vendor Code of Conduct. We are aware of the NLC report and we have commenced an investigation. We take these claims seriously, and we will take appropriate remedial measures in regard to any findings of vendor misconduct."

The Microsoft Vendor Code of Conduct (PDF) bars pretty much everything the NLC describes about KYE Factory. It's possible, however, that Microsoft is simply unaware of what exactly goes on inside. NLC says KYE management has made sure corporate audits by tech companies fail miserably:

Management instructs the workers to "answer the clients' questions very carefully." They should say they never work more than 12 hours a day and overtime is less than 36 hours a month. Workers are told to respond they are "very satisfied" when asked about working conditions, their dorms and meals. To make this sound even more "authentic," workers are told to "spontaneously" mention other factories where they had worked in the past, where conditions were "awful." They are more "hopeful" now that that they are working at KYE.

For these high school students, this is their three-month summer break, though some choose to stay a little longer, working up to six or eight months, and a few of those stay on at the factory to become full-time workers. The only positive detail is that Microsoft says it is taking this report seriously. We'll keep you posted as this story develops.