CSR Policies & Initiatives: In the wake of mass staffs suicide

OUTLINES
Vision,

Mission, Strategy CSR of Foxconn Market Forces Analysis Stakeholders Engagement & Phase Model Key Issues & Gaps Recommendations Conclusion

FOXCONN TECH. GROUP

HON HAI PRECISION INDUSTRY CO.

Founded

1974, Taiwan World largest contract manufacturer of 3C products 500 largest global Co. Taiwan, HK, London, China

VISION
Cost Advantages Vertical Integrations Devotion to greater social harmony and higher ethnical standards
Total

MISSION
Provide

electronics users the most cost-effective, high quality 3C products possible

STRATEGY
Develop

strategic relationship with industry leaders Focus on the development of global logistics capabilities Expansion of production capacity Vertical Integration Maintain technology advance and flexible production capabilities New Products

CORPORATE SOCIAL RESPONSIBILITY (CSR)

OF FOXCONN

 Foxconn

Global Social & Environmental Responsibility Committee an Executive Director was appointed to lead this group. Some areas of the CSR of Foxconn: (A) Employees  Work Life Balance, Program provides e.g. caring for newborn babies & managing family finance  Employee Education, e.g. Industrial Engineering Academy in ShenZhen
Source: Foxconn, 2008, Corporate Social & Environmental Responsibility Report.

CSR OF FOXCONN (CONTD)

 Advance

Degree Education there

are 10,000 have participated under Foxconns sponsorship.  Supplier Employee Education & Development for line operators.  Occupational Health and Safety 700,000 employees world-wide, safety culture: zero incidents and zero injuries focus on prevention

CSR OF FOXCONN (CONTD)

(B) Environment  Energy conservation  Reducing emissions  Tree planting  Recycling

CSR OF FOXCONN (CONTD)

(c) Community Initiatives  Yongling Foundation was established in Taiwan & work together with China Communist Party in China medical care, education, poverty, alleviation, culture & safety.  Support for minority populations

CSR OF FOXCONN (CONTD)

 Charity

world-wide

Christmas 2008 in the Wilson de Oliverira Nursery

Adopt a child Campaign 2008 South America

Donations to S.O.S Santa Catarina 2008

CSR OF FOXCONN (CONTD) (D) Supply Chain SER Management

Foxconn

screen supplier, will terminate business relationship if they involve the following:  Child labor  Forced or prison labor  Release of poison or hazardous materials to the environment or violate environmental laws  Working conditions that damage employee health

MARKET FORCES The BUYERS

80% Bottom line

Buyers Pressure

STAKEHOLDER ENGAGEMENT
Stakeholder Communication
Satisfaction Survey, Employee Hotline, Presidents Letter Box Customer Audits, Business Meetings Scheduled Meetings, Annual CSER Review BOD Meetings

Results/Issues
Proper work environment, barrier free communication Code of Conduct, CSER audits, International forums, Carbon disclosure Project & hazardous substances Increased ROI

Degree of Power
Weak

Employee

Customer NGO
Shareholder

Strong

Strong

Strong

SUSTAINABILITY PHASE
Rejection Non Responsiveness Compliance

Efficiency
- Systematic Attempts

to use resources effectively for decreasing costs

Strategic Proactivity
- Proactive Sus. Strategy as source of CA

Sustaining Corporation

KEY ISSUES
No. of Suicide incidences increase in Foxconn;
Public

blaming on CSR Complaint on harsh working environment & militaristic working style
More than 40 France Telecom employees have taken their lives since 2008
http://www1.voanews.com/english/news/europe/France-Investigates-Suicides-at-Telecommunications-Companyhttp://www1.voanews.com/english/news/europe/France-Investigates-Suicides-at-Telecommunications-Company-90571979.html

SUICIDE RATES (PER 100,000), BY COUNTRY, YEAR, AND GENDER.

Male Female

14.8 % 13.0 %

Note: Number of suicides per 100,000 of the population. * Selected rural and urban areas in China; ** Hong Kong SARSource: World Health Organization, Most Recent Years Available. Data as of May 2003. Downloaded in August 2005 from WHO web site at: www.who.int/mental_health/prevention/suicide/suiciderates/en/print.html

GAPS BETWEEN ISSUES

Issue in China Business Unit Policy

Long working hours Claim to do 100 hours extra for overtime

Has policies sanctioning any practice of compulsory overtime and all overtimes are results of employees' voluntary participations

Harsh working Has conducted a nonconditions tolerance policy to anyone Militaristic working style who imposes any kind of physical punishment to her employees/subordinates

RECOMMENDATIONS

Strengthen & Expand their BCP.

- Risk management for terrorist / disease at their plants worldwide

Innovation in technology, reduce consumption and labour requirements. Pay more attention to stakeholder - employees

Cultural /Social Study on community values Damage control for bad press received on employee treatment can jeopardize relations with suppliers

RECOMMENDATIONS
Screen

employees to detect those having psychological problems or those with family history of depression.
Minimize OT by raising basic salary Piped in music to create a stress less working environment (Muzak & Hawthorne Studies improved productivity, less stressful) Engage independent and reputable external audit committee to Audit their HRM policies and implementations and NGOs

CONCLUSION

Foxconn adopts good CSR & employee practice as evidenced by their many contributions to the local community and by the above average facilities provided at their campuses.
The recent happenings are not a direct result of any practices, uncommon to the working conditions in China.

Employee suicide statistics in European countries are as high but have not drawn worldwide attention.

QUESTIONS

??

THANK YOU

Cost of Living in Shenzhen

Food/Drink milk, small paper cup white bun supermarket half sliced bread apples (per kg) water (1.5 liter) lettuce (0.5 kg) rice (0.5 kg) pork (0.5 kg) spareribs (0.5 kg) bag of nuts Price (Yuan) 2.90 1.8 5 7 2.5 1 2 12 18 5-20

Daily usage big bottle soap t-shirt, men shirt, men 20-30 20-50 40-200

Restaurant dinner, 2 person lunch, 2 person chinese fast-food order (incl. delivery) some dishes fish vegetable meat rice/bowl 20-100 10-30 20-50 1-2 30-120 25-50 10-20