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New article: ‘On the move. The electronics industry in Central and Eastern Europe’ - 15 December 2009
When centrally controlled economic systems collapsed and the markets of Central and Eastern Europe (CEE) opened up to foreign capital, most of the world’s biggest electronics companies started to invest in the region. How did this affect workers in the CEE? And how can we make the companies act responsibly towards their workers?
In the past, civil society organisations and trade unions in ‘old’ European Union (EU) countries have mainly emphasised labour rights issues in Asia. With the rapid and profound changes in the CEE labour market over the past ten years, however, these issues have become acute for this region as well.
The makeITfair campaign has taken a close look at labour conditions in CEE. Studies have been carried out in Poland, Hungary and the Czch Republic. This article summarises and illustrates the key findings.
Electronics production already existed in CEE during the period of centrally controlled national economies. With the collapse of the previous system, however, markets opened up and formerly state-owned firms generally proved unable to compete with advanced US, Asian and European companies. As a result, foreign multinational corporations (MNCs) have become the key actors in CEE’s export-oriented electronics sector. EU companies were among the first to invest in the region, responding to strategic opportunities such as lower labour costs and geographical proximity to the western European market. Korean firms also moved in early, looking to use central Europe as a production platform for the entire European market. By the mid-1990s, US firms had also moved in, followed by Japanese firms by the end of the 1990s.Nowadays, most major electronics brands are operating within the region, such as Phillips, Siemens, Nokia, Motorola, Sony, Matshushita, LG Electronics, Ericsson, Daewoo, HP, Dell, IBM, Microsoft, Intel, Canon and Samsung. All the major manufacturers are also present; Flextronics, Foxconn, Celestica, Jabil, Solectron, Sanmina, Zollner, Benchmark, Plexus and Elcoteq.
What companies should do
The rapidly expanding electronics industry in CEE faces many social and environmental problems – issues that electronics companies must take responsibility for throughout their entire supply chain. Companies should also assume responsibility for agency workers, especially those from abroad. These workers run the risk of becoming illegal immigrants once they lose their job. Their situation remains highly insecure; a situation that needs to be addressed urgently by employment agencies and companies alike. Companies can integrate agency work in their codes of conduct and pay specific attention to agency workers in their monitoring efforts. Electronics companies should also train their suppliers in implementing codes of conduct and improve their auditing and monitoring systems. In addition to improved internal monitoring systems, external and independent verification is important. Special emphasis should be placed on foreign companies, since they often already have CSR policies. Finally, companies must work with local NGOs and trade unions. Companies, including their suppliers, must recognise workers’ rights to form or join trade unions. The fight for better working conditions cannot be won if workers themselves cannot be heard.
