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Nokia’s Reputation and the SOMO Report

Annemarie de Weijer Supervisor Ms Kahar
May 14th 2008

“The Hague School of European Studies” Haagse Hogeschool, The Hague, May 2008

Executive Summary
In November 2006, SOMO published a report that criticised labour conditions in Nokia’s factories in Asia. This report revealed conditions where workers work up to 72 hours a week with compulsory overtime, have insecure employment contracts and work in unsafe factories, where no or inadequate protection is offered while working with toxic chemicals. Research also showed that wages are below minimum wage, workers suffer inhuman treatment and are rarely aware of their rights or of Nokia’s Code of Conduct. When doing piece work, quotas are often set extremely high, women are often fired when they become pregnant and there is no freedom of association. This research focuses on Nokia and aims to find out whether the conclusions of the SOMO report and the publicity that followed afterwards had any harmful effects for the reputation of Nokia among consumers in The Netherlands. The target groups of this research are consumers and potential consumers of Nokia between the age of 18 and 65. Nokia is the largest supplier of a wide range of mobile phones and its goal is to have the best quality products and services in the mobile phone industry. The company has a strict set of supplier requirements that are integrated in the contracts with their subcontractors and suppliers. Nokia tries to do business with suppliers that have the same standards as Nokia, but if the ethical performance of one of its suppliers might become questionable the company will compel such a supplier to take corrective action. However, if a supplier refuses to change any of the issues addressed Nokia is prepared to reconsider its business. In order to assess whether labour conditions at its production sites meet international standards, Nokia’s Code of Conduct and local labour laws, the company conducts in depth assessments. China’s law states that a workweek contains 40 hours, forced overtime is not allowed, overtime is limited to 3 hours a day with a maximum of 9 hours a week. All workers have the right to a contract and paid annual vacation. It is forbidden to set unreasonably high quotas for workers doing piece work and workers have the right to organise in unions. Furthermore, no discrimination will occur on basis of gender and it is prohibited to fire women during pregnancy. According to Thailand’s labour law employees may work a maximum of 48 hours a week and 42 hours when labour is considered dangerous. Employees are entitled to an hour break a day and at least one day off a week. Forced overtime is forbidden, except when work is very urgent to which employers have a right of overtime pay. Employees are entitled to paid annual holidays and women are also entitled to 90 maternity leave days a year. Pressure groups that are important to Nokia in the Netherlands are SOMO, MakeITfair, Goodelectronics and Greenpeace. They focus on labour conditions and the harmful effects the electronics and ICT sector have on the environment. Also the Dutch consumer organisation Consumentenbond is increasingly providing more information on corporate social responsibility.

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Nokia’s reputation, assessed by emotional appeal; products and services; financial performance; vision and leadership; workplace environment and social responsibility, shows that the company has built a strong reputation over the years. This means that if an issue appears it is not very likely that Nokia’s image will easily be damaged. Only a couple of rather small articles have been published by the Dutch press about the SOMO report neither of those articles criticised Nokia, they just summarised the main findings of the report. One article in Consumentenbond criticised the entire mobile phone industry for its practices, not Nokia in particular. The articles that have been published about Nokia in...
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