Computer Makers Sign Joint Code of Conduct

The three largest computer makers spearheaded a program today
designed to standardize working conditions for their non-U.S. workers.

IBM , HP and Dell said they have signed agreements with overseas partners
Celestica, Flextronics, Jabil, Sanmina SCI, and Solectron to establish
the Electronics Industry Code of Conduct.

The goal of the agreements is to make sure each global supply chain provider adheres
to local laws but ultimately be held accountable for global standards, such as
fair labor and employment practices, health and safety, ethics and
protection of the environment.

Earlier this year, a report by the
non-profit Hong Kong Christian Industrial Committee harshly
criticized working conditions overseas. After working on the problem for
three months, IBM, HP and Dell said they wanted to heed the
recommendations for their own peace of mind. Each company contributes to
a multi-billion dollar off-shoring manufacturing industry.

Under the combined code, for example, workers in countries like
Taiwan, China and Mexico would be protected against child labor laws and
would be eligible for the same minimum wage, overtime and other benefits
as the local law allows. The standard would also prevent against
discrimination in the workplace, such as an applicant from Pakistan
denied a job with a supplier in India based on national origin.

Prior to today’s announcement, the companies used their own
respective codes of conduct, and suppliers were sometimes subjected to
multiple independent vendor audits based on different criteria.

Stan Litow, who serves as IBM vice president of corporate community
relations and president of the IBM International Foundation, told
internetnews.com the new program paves the way for better
monitoring suppliers’ performance.

“This is not a hollow code,” Litow said. “It’s important internally
because it’s socially responsible. It’s one code that everyone can
subscribe to. So far we have 13 members and we are inviting other
companies to join us.”

Mike Fawkes, senior vice president of operations at HP and Pat
Nathan, Dell’s global sustainable business director, backed Litow’s
statements suggesting that, while the consortium has not initiated
contact with any non-government organizations (NGOs), the group does
expect support by the World Trade Organization and government regulators
in North America and Europe.

IBM’ Litow said that the company has already trained some 40 auditors
to scour IBM’s 33,000+ suppliers and protect its $40 billion supply
chain investment.

HP said it has trained more than three dozen auditors on Social &
Environmental Responsibility to assist its 350 suppliers. The computer
and printer manufacturer said it will realign all of its processes and
tools to the newly revised code of conduct by 2005. HP said its supply
chain consists of $43 billion direct material spend and a $10 billion
indirect spend.

Dell’s procurement covers approximately $35 billion annually — 75
percent of which is spent with 20 suppliers.

“Longer term, we believe that it will be the healthy work environment
that produces the best product,” Dell’s Nathan said.