iPod kerfuffle highlights China issues

Last week the British newspaper "Mail on Sunday" reported on Apple Computer's alleged exploitation of iPod manufacturing workers in southern China.

The Mail article seemingly represents original reporting on the paper's part, but it smells of a story idea fed to the paper by a nongovernmental organization (NGO).

It's a formula that works: piggy-back on the popular brand name or product of a multinational company; accuse the company and its North American management of exploiting poor, unfortunate workers in the developing world. Wait for the media to go crazy, get the general public indignant on an issue about which it otherwise doesn't care. Then watch the company announce some change to their labor policy, rather than face a boycott or other action.

Americans are particularly sensitive to companies' labor practices. A recent survey by public relations firm Fleishman-Hillard and the National Consumers League found "76 percent believe that a company's treatment of its employees plays a big role in consumer purchasing decisions."

This smash-mouth tactic works. It plagued Nike or years, when the sports clothing retailer botched its response to such accusations and came off looking like a slave driver.

The Mail spoke to staff at the Longhua plant, including an unnamed "security guard." In more than a decade as a reporter and editor, I've never interviewed or quoted a security guard in relation to the operations of a technology company.

The paper also said that "visitors from the outside world are not permitted." I suggest that the Mail reporters show up at a factory near their headquarters in London and see if they're allowed in, without an appointment or other business purpose. They can then write that "visitors from the outside world are not permitted" there either.

Before I joined this fine organization, I put some bread on my table through doing consulting on corporate social responsibility (CSR). Without naming names, a U.K.-based mobile services provider that until recently sponsored the Manchester United soccer team had bought about 2 percent of a Chinese mobile carrier that isn't China United Telecommunications. All of a sudden, they found themselves under attack by an NGO, claiming that the company's investment in China was supporting human rights violations in Tibet.

China is a growth market for NGOs just as much as it is for any technology company. China is a new market for more issues, more hearts and minds to win to the cause, new battlefields where skirmishes over environmental destruction, human rights, and the digital divide can be fought.

Hewlett-Packard Co. (HP) found itself the subject of protests over its technology recycling programs, and other companies have been accused of dumping toxic tech waste here. To fend off just the kind of accusations leveled at Apple, HP announced earlier this month that it would initiate a contractor-education program, designed to teach best practices in labor and personnel management to its suppliers in China, including Foxconn.

If you do business in China, you may very well find yourself in the cross-hairs of such groups and similar reporting. Just when you thought outsourcing issues and government relations were sufficiently challenging, companies serious about a China presence must make CSR as high a priority as any other marketing or public relations function.

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Steven Schwankert

IDG News Service
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