3. Problems with SuppliersMany comp

3. Problems with Suppliers
Many computer hardware manufacturers rely on foreign companies to provide raw materials; build
computer parts; and assemble hard drives, monitors, keyboards, and other components. While there are many
advantages to dealing with foreign suppliers, hardware manufacturers may find certain aspects of their business
(such as quality and cost control, shipping, and communication) more complicated when dealing with a supplier
in another country.
In addition to these fairly common business problems, hardware manufacturers are sometimes faced with
serious ethical issues relating to their foreign suppliers. Two such issues that have recently surfaced involve (1)
suppliers who run their factories in a manner that is unsafe or unfair to their workers and (2) raw materials
suppliers who funnel money to groups engaged in armed conflict, including some that commit crimes and human
rights abuses.
In February 2009, alarming information came to light about the Meitai Plastics and Electronics factory in
Dongguan City, in China’s Guangdong province. This factory, in fact, represents an extreme example of a
supplier who runs its factory in an unsafe and unfair manner. Meitai Plastics employs 2,000 workers, mostly
young women, who make computer equipment and peripherals— such as printer cases and keyboards—for Dell,
IBM, Lenovo, Microsoft, and Hewlett-Packard products.70 Based on research conducted between June 2008 and
January 2009, the National Labor Committee (a human rights organization based in the United States) published a
report in February 2009 highly critical of the work environment at the factory.71According to the report, young
workers were required to sit on hard wooden stools for 12 hours a day, working on an assembly line that never
stopped. Workers were prohibited from talking, listening to music, raising their heads from their work, or putting
their hands in their pockets. Employees were fined for stepping on the grass of the factory grounds, not trimming
their fingernails, and for being even one minute late. A worker who needed to use the restroom had to wait until
there was a group break. The average workweek consisted of 74 hours, with a take-home pay of $57.19—well
below the amount necessary to meet subsistence-level needs in China. If a worker took a Sunday off, she was
docked one-and-a-half-day’s wages. Workers were housed 10 to 12 per dorm room. The dorms had no air
conditioning, and temperatures in the rooms could reach the high 90s in the summer. Workers were required to
walk down several floors to get hot water in a small bucket to use for personal hygiene.72
Manufacturers who use rare raw materials face another ethical issue related to the use of foreign suppliers:
how to ensure that their suppliers do not funnel money to groups that engage in armed conflict or commit crimes
and human rights abuses. Manufacturers of computers, digital cameras, cell phones, and other electronics
frequently purchase rare minerals such as gold, tin, tantalum, and tungsten for use in their products.
Unfortunately, some of these purchases are helping to finance the deadliest conflict in the world today —the war
in the Democratic Republic of Congo. The war began in 1998 and has dragged on long after a peace agreement
was signed in 2003. During the war and its aftermath, over 5 million people have died—mostly from disease and
starvation—making it the deadliest conflict since World War II.73
In Congo, many mines are controlled by groups that engage in armed conflict and inflict human rights
abuses on local populations. The Enough Project’s “Raise Hope for Congo” campaign is trying to get large
electronics firms to trace and audit their supply chains to ensure that their suppliers do not source minerals from
mines in Congo that are controlled by armed groups. This is often easier said than done because of the long,
complex supply chain and often disreputable middlemen involved in the minerals trade. As manufacturers
struggle with these issues, some are trying to use their influence to demand that their suppliers stop sourcing from
mines that continue to fund violence in Congo and elsewhere.74
Discussion Questions
1. What responsibility does an organization have to ensure that its suppliers and business partners behave
ethically? To whom is this responsibility owed?
2. How can an organization monitor the business practices of its suppliers and business partners to determine if
they are behaving in an ethical manner ?