Labour Rights Living Wage and Freedom of Association in the Garment and Electronics Sector

Wednesday, June 1, 2016

Netherlands - This case study "Labour Rights: Living Wage and Freedom of Association in the Garment and Electronics Sector" - hereinafter referred to as Case Study Labour Rights - was conducted by research bureau Profundo and commissioned by the Fair Bank Guide. On behalf of the Fair Bank Guide, the Dutch trade union FNV has initiated this case study. Other coalition partners of the Dutch Fair Bank Guide are Amnesty International, the Dutch Association for the Protection of Animals ‘Dierenbescherming’, Friends of the Earth Netherlands, Oxfam Novib and PAX.

Most of the international electronics brands and clothing brands outsource product manufacturing to production sites and suppliers to countries with low labour and products costs, in order to cut operating expenses.

In recent decades, shifting the manufacturing of clothing and consumer electronics to low-cost countries, led to an increase of products affordable to larger numbers of consumers. For emerging markets and developing countries this trend has led to employment, economic development and industrialization. China is the world's most important production country for the manufacture of consumer electronics, both ready-made products and components. Other major production countries are the United States, Japan and Germany. China also account for a third of global garment production, followed by Turkey, Bangladesh and India.

The downside of outsourcing to low-cost countries is that workers in factories and workshops where the products are made are exposed to poor working conditions. Labour issues concern long working hours, lack of freedom of association, low wages and health and safety risks.

Over the past years, serious abuses got worldwide attention. In April 2013, hundreds of people died and thousands were injured after the collapse of the Rana Plaza garment factory in Bangladesh, supplier of a large number of international garment brands. Since 2010, Taiwanese electronics’ producer Foxconn (Hon Hai Precision), major supplier of Apple products, got media attention due to reports about high suicide rates among young Chinese workers in production plants in mainland China, caused by depression and stress over long working days, high work pressure and low wages. Today, in Turkey, hosting over 2 million Syrian refugees, garment factories exploit the vulnerable position of refugees, which involves underpayment and child labour. Again, these factories are suppliers of international garment brands.

This case study focuses on the ten largest banking groups in the Netherlands and how they address the potential risk of violation of human rights and labour rights in the production and supply chains of corporate clients and investments under management in the garment and electronics sector; and whether they take action when companies do not adequately manage these risks or involved in controversies. The case study is specifically focused on payment of a living wage and freedom of association.


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