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Magazine / Need to Know: Technology

High Tech, Low Standards

Technology companies posture as exemplars of corporate responsibility. Then there’s their track record.

Not so green: Server farms draw tons of power.(FABRICE COFFRINI/AFP/Getty Images)

photo of David  Hatch
April 28, 2011

If Silicon Valley were to adopt an official color, it would be green. The technology sector has carefully cultivated an image of corporate responsibility that emphasizes eco-conscious initiatives, energy-efficient products, and state-of-the-art work environments. From efforts to promote electronics recycling to investments in smart electrical grids, high-tech stalwarts praise themselves for fostering an innovation-based economy. Cisco CEO John Chambers agitated for environmentalism in a 2008 speech, declaring: “Every corporation has a responsibility to help address climate change and to minimize the impact of its operations on the environment.” And a nine-page “code of conduct” created by the Electronic Industry Citizenship Coalition—which seeks to ban child labor and reduce dangerous emissions—is widely followed by makers of computers, televisions, and other electronics.

But in truth, the tech sector hardly differs from any other. In recent years, giants in this field have found themselves on the defensive over reports of child labor, unsafe working conditions at overseas factories, and the use of natural resources from Congo that fund civil war. A Greenpeace report last week said that Silicon Valley icons like Apple, Facebook, and HP are heavily reliant on greenhouse-gas-emitting coal.

These companies and others have largely avoided scrutiny from Washington because nearly all of their manufacturing is overseas in countries with weak regulation—far from the watchful eye of U.S. enforcement, consumer advocates, and labor groups. But as information continues to leak about the companies’ operating practices, the tech sector’s image of corporate responsibility could unravel.

 

The National Labor Committee, a nonprofit human-rights group, concluded last year that two Chinese factories assembling products for Microsoft, HP, Whirlpool, and GE operate like minimum-security prisons. And the Foxconn manufacturing plant in Shenzhen—which makes computers and other electronics for Apple, Dell, HP, and others—saw at least 10 suicides last year. The facility is operated by a Taiwanese-based conglomerate and is notorious for long workdays, low wages, and repetitive jobs, according to labor activists. Apple, meanwhile, drew headlines in 2010 over allegations of child labor at several Asian facilities in its supply chain.

“The ability of these companies to know and understand their supply chains seems to be lacking,” lamented Trina Tocco, deputy director of the nonprofit International Labor Rights Forum. Like many industries, the tech sector applies a double standard to its foreign operations, she said, noting that the industry’s code of conduct is not always followed, because it is voluntary.

Greenpeace is shining a spotlight on the tech industry’s reliance on coal to operate massive computer-server farms that store Internet content. “Technologies of the 21st century are still largely powered by the dirty-coal power of the past,” concludes the group, which cited Apple, Facebook, IBM, HP, and Twitter as the worst offenders. It also praised Google, IBM, and Yahoo for reducing their overall carbon footprints and for being transparent about their energy consumption.

Another area where high-tech companies have a mixed record involves the use of “conflict minerals”—tin, tantalum, tungsten, and gold—from war-ravaged Congo for electronic devices. Militia groups that reap millions of dollars in profits from the minerals spend the money to perpetuate a war that has killed more than 5.4 million people since 1996, according to Raise Hope for Congo. An affiliated monitoring group cites RIM (maker of the BlackBerry), Panasonic, Sony, and Toshiba as among the companies that have taken little or no action to adopt conflict-free practices. Other tech companies, including Dell, HP, IBM, and Microsoft, have been more responsive.

The drive to hold domestic tech companies accountable for their sins abroad reprises a 1990s fight in the fabric industry. Then, watchdog groups pointed to sweatshop conditions at Asian factories that produced products for Nike, the Gap, and other major retailers. Public pressure curbed many of the abuses, including child labor and dangerous work conditions, but it didn’t eliminate them. Coming off those victories, labor advocates have taken the fight to a new generation of American companies desperate to lower expenses and stay competitive.

Yet tech companies are businesses before they’re global citizens. “The pressures of running a business, where Wall Street is looking at how you’re cutting costs—rather than what you’re doing for the world—certainly sets up a situation where it is easy to look at the bottom line first,” said David Hamilton, director of global-warming and energy programs at the Sierra Club.

Nevertheless, it’s impossible to generalize about the industry because some companies—such as Google—have made significant investments in clean fuel, or have taken many small steps to reduce energy consumption. “If airlines or automobiles were to show the level of improvement that we have [in energy efficiency], we would be living in a Jetson world,” said Dean Garfield, president and CEO of the Information Technology Industry Council. “Can we do more? Yes. Are we doing more? Yes.” He also insisted that tech companies have been responsive to concerns about labor practices and noted that Congress enacted legislation last year requiring more transparency about the source of minerals.

The deep-pocketed corporations that Garfield represents are lobbying Washington for lots of regulatory goodies, including a tax holiday on revenue earned overseas, an increase in the number of highly skilled workers permitted entry into the U.S., and an extension of a federal tax credit that reduces corporate research costs. If monitoring groups keep drawing attention to the industry’s failures on environmental and labor issues, those sorts of favors could be much harder to win. 

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