Competition between mobile phone manufacturers in the Asian and African market is getting fiercer as phones need to be produced more and more cheaply. Before the arrival of smartphones, Nokia was the clear market leader  but now their position of dominance is threatened both by established competitors and new entrants in the field. One of the interesting side effects of  this competition is how it is affecting corporate decision-making and established social responsibility.   “Made in Finland” has long been associated with ‘ethically‘ produced products, but that’s not the case any more.  For example Nokia has been forced to close several manufacturing plants in Europe and open new ones in Asia. Their plants are not able to produce enough products to satisfy demand for smartphones, so they have leased assembly lines and manufacturing space from Samsung, which makes supply chain reliability and and monitoring more complicated.

The five biggest manufacturers (Nokia, Sony-Ericsson, Samsung, Motorola and  LG) have documented  their social responsibilities,  (http://www.nokia.com/global/about-nokia/people-and-planet/, http://www.sony.co.in/section/csr) and they look good on paper; they have promised to look after their employees and reduce environmental effects of manufacturing. Kuluttaja (“consumer”) magazine wrote about research carried out by Helsinki University, which analyzed manufacturer’s social responsibilities and how these words have been acted upon. Employee Rights in developing countries are not at an acceptable level; there are massive shortcomings using (and enabling use of) securing equipment and illegal working hours, inadequate wages and poor conditions is the norm in these plants. Also, suppliers are not monitored by third parties, so their practices will rarely become general knowledge.

I may sound prejudiced pointing out, that in Nokia plants things are so far relatively good compared to competitors. Samsung and Sony-Eriksson obtain average results with regard to respecting social responsibilities based on interviews withemployees. These interviews brought out the fact, that one Motorola suppliers is using child labor and that Motorola was aware of this. As mentioned before, Nokia may face similar problems as they have outsourced processes. As Apple is not considered as mobile phone manufacturer, their plants are not in this study. There was very little information about their supply chain, so it remains as a question mark, how socially and environmentally ethical is iPhone.

Working conditions do vary according to plant, but more they vary between countries. In Europe, EU is supervising manufacturers, so if phone has assembled in European country, it is probably made in rather “good conditions”. In China working hours are longer and safety poor. In India using under 16-year-olds as a labor force is common, unions are forbidden and wages under average. The Philippines seem to be an exception, as plants there pay average wage and safety has been taken care of moderately well.

Most phone manufacturers share suppliers, which means, that if one supplier is acting unethically, it is problem for all manufacturers and it makes phone less ethical no matter where it’s assembled. One solution for this could be joined board of manufacturers to supervise suppliers who together would have enough power to force suppliers to act ethically. Supervision is also needed for to examine the provenance of raw  materials.

Working conditions are not the only thing to worry about when talking of  social responsibilities, the environmental issues need to be considered too. As we heard from presentations about recycling of mobile phones, they include toxic chemicals, which are risk for environment also in manufacturing phase. Especially components like batteries and LCD screens, which are produced by suppliers, but handled by assembler, and which contain toxic chemicals. Although phones remain a waste  problem after they are not used anymore, more than 60 per cent of mobile phone’s environmental effects is from manufacturing. When most of that manufacturing is from developing countries, it will load these areas and cause secondary effects, like poisoning drinking water and lands. The more industry there is , the more there also is need for energy and using safe, green and NOX-free electricity is most certainly not the number one priority of plant owners.

The origin and means of manufacture of a particular phone does not often enter into the  reason why a customer chooses to buy a certain phone, but maybe unethical actions of its manufacturers can be reason not to buy one. Not all mobile phones are produced in bad conditions and plants bring a higher standard of living to many families around the world. Pointing out faults of certain brand’s plants is part of competition, so I think it is more important to support good and socially responsible actions of manufacturers. I have once chosen one slightly more expensive phone, because it was made in Finland over a  cheaper one  which wasn’t. This kind of decision could have saved Nokia plant in Salo, but it’s too late now. Still I wish, that  a price war will not lead to the abandoning of social responsibilities.

Here is news from Apple assembly plant in China, so apparently they don’t have so much fun either…

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20120606000112&cid=1102

http://www.digitoday.fi/tyo-ja-ura/2012/06/07/vihaiset-iphone-kokoajat-sarkivat-paikkoja/201231040/66 (in Finnish)