Csr Sumamry

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Trade Unions in the TNC Supply Chain and their relationship with the CSR movement Case Summary
ESRC/Case study/B/1

Chinese enterprises are essentially passive players at the sharp end of CSR in China. They are in a position of having to juggle between the different factors governing the development of industrial relations in China, including trade union reform. In this often tense dynamic, CSR is seen as an external factor and trade unions an internal factor. These two factors have an impact on each other. As part of the research for this case study, the research team (RT) ‘shadowed’ a CSR audit. The factory had come under very heavy CSR pressure in 2004. Altogether, the RT carried out two investigations: in March (see earlier printed report) and August 2006

Initial conclusions:
1) That factories undergoing CSR audits have better working conditions than those that don’t. 2) There is no evidence to suggest that trade unions have an impact on wage levels at enterprise level. However, factories subject to CSR pressure are generally large workplaces and this was perhaps a factor in improving labour conditions. Moreover, CSR-targeted factories are prone to data distortion due to ‘training of workers’ answers’ in interview and double or even triple accounting.

Enterprise Y was established in 1997 and now has 1,200 workers. It was ‘Re-registered’ in 2002 to take advantage of tax breaks etc. It manufactures electronic goods for export chiefly to three retailers and over 50% of goods go to a single US company.

Employment breakdown: 80 managers, 300 skilled workers; remainder are ordinary workers. Managers and skilled workers have contracts and social insurance based on minimum legal standards. The extent of contracts among unskilled workers remains unclear. The enterprise had previously supplied a ‘comprehensive’ contract and social insurance list to CSR audit team (excluding probationary workers) but the RT’s interviews with workers revealed that many had no idea if they had a contract or not or if they were paying into various social insurance schemes such as work injury or pensions. The RT was not given access to formal SI contribution records.

Wages were verified at between 900-1100 yuan per month with on average more than 60 hours o/t but this was subject to orders. There were few disputes and conditions generally were better than at surrounding factories. Up until Aug 2006 accommodation was free and reasonably good. The labour turnover rate for unskilled workers was just 8% and most workers had been there more than two years already. However, in the same period the labour turnover rate for skilled workers had increased dramatically.

Enterprise Trade Union
Established in 2004. Trade union chair M directly elected by workers, largely as a result of pressure from the Brand. By August the follow-up research revealed M had left, apparently for ‘personal reasons’ according to management. Former vice chair C had taken over his position. C’s previous experience had been as a member of a trade union committee in an SOE trade union. He was appointed to the post at Y. The local township union said that there would be fresh union elections ‘soon’. The trade union at Y had three other union committee members. All were mid or senior level managers: human resources manager, one an engineer, and a finance manager. The union had an office in the enterprise but has no bank account or independent accounts/expenses system. All union activities were entirely dependent on management transferral of funds.

Trade Union Work
Approach to union work very similar to work in SOEs – i.e. very traditional. Also the union works very closely with the township union and pretty much depends on it for policy etc. The latter is very pleased with the Y union, which has received a number of awards. Activities include labour productivity competitions, May Day competitions. Prizes include going on holiday to HK. Examples of...
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