Date of publication: June 19, 2006
Source: BusinessWeek
How HP's Bonnie Nixon-Gardiner spurred the industry to police worker conditions
By Peter Burrows
Bonnie Nixon-Gardiner certainly knows how to throw her weight around. She's only a middle-level manager at Hewlett-Packard Co. and stands at just 5 foot 3. But the top brass snapped to attention last year when she showed up in Long Hua, China, to inspect working conditions at a massive electronics manufacturing complex owned by a key HP supplier. Executives from Foxconn Electronics, a unit of Hon Hai Precision Industry Co., tried to whisk her into a conference room for a PowerPoint presentation. But Nixon-Gardiner, 46, said bluntly that she wasn't interested.
Instead, remembers Grover Thurman, Foxconn's senior director of social and environmental responsibility, she demanded full freedom to walk around the 200,000-employee complex, the waste-treatment center, and the dorm rooms where workers live. When her hosts resisted, she sat them down for a talking-to. "Look, this isn't going to work unless you're totally transparent with me," she told the officials. Within minutes, she was off, a line of nervous, suit-clad executives in tow. "[We] were pretty uptight when she took a left turn when [we] wanted her to go straight," recalls Thurman.
Foxconn had reason to balk. A non-Chinese speaker was wandering around among 250-ton metal-cutting machines that churn out parts for computers and cell phones. Perhaps of greater concern was Nixon-Gardiner's potential impact on the bottom line, despite her unimpressive title of program manager for HP's Supply Chain Social & Environmental Responsibility.
A big chunk of Foxconn's $25 billion in sales come from HP, which buys $67 billion worth of electronics every year. So, a lot was riding on whether she gave the thumbs-up. On a bigger stage, Nixon-Gardiner has been a key behind-the-scenes catalyst for an ambitious new effort by the high-tech industry to improve working conditions at suppliers like Foxconn around the globe. "HP has taken the lead on this, and Bonnie did a lot of it on sheer passion," says Kevin O'Mara, vice-president at consultants AMR Research.
Back in 1999, as HP and other tech companies began outsourcing production of printers, motherboards, and laptops to the same low-wage countries that make Nike shoes and T-shirts sold at Wal-Mart, she began setting down strong anti-sweatshop policies for HP suppliers. By 2004, Nixon-Gardiner and her counterparts at Dell, IBM, Intel, and other companies had agreed to create the Electronic Industry Code of Conduct. The EICC sets out basic labor and environmental standards for the industry's contractors.
Modeled broadly on other industrywide groups such as the Fair Labor Assn. (FLA) founded a decade ago by Nike and other footwear and apparel companies, the EICC is a first for the tech industry, which is rarely associated with sweatshop issues. Still, it only goes so far. Unlike the FLA, for instance, the EICC isn't an independent body and to date doesn't conduct random inspections of member companies' overseas factories. The EICC simply spells out abuses -- from child or forced labor to excessive overtime -- that the companies agree are unacceptable on the part of their contractors. It leaves the inspection and enforcement of these standards to each member company.
Still, just getting hypercompetitive tech companies behind a unified effort is an accomplishment, say some. "It's too early to assess [the EICC's] success, but they've developed an industry approach that makes sense," says David Schilling, director of the corporate accountability program at the Interfaith Center on Corporate Responsibility in New York.
JUMPING ON BOARD
Nixon-Gardiner isn't waiting for the perfect solution. A New Jersey native raised by a single mom, she grew up with a strong social conscience. At HP, she has set up a 70-auditor system that has inspected 200 factories owned by 150 key HP suppliers -- more than any other EICC member. HP says allegations of labor problems contributed to its decision to break with three suppliers that didn't make the grade, including South Korea-based Trigem Computer Inc. Trigem says it wasn't aware of this issue. She is also trying to educate local suppliers. On June 1, HP announced a new training program to help Chinese manufacturers prevent labor and environmental abuses; Brazil, Malaysia, and India could be next. "My 10-year vision is for [consumers to know that] when you touch a technology product, you are guaranteed it was made in a socially and environmentally responsible way," she says.
HP's workplace crusade began in 1999, when workers at a printer unit in Vancouver, Wash., that had been sold to a supplier raised concerns that the new owners weren't upholding HP's worker safety policies. HP tapped Nixon-Gardiner, then a consultant, to benchmark how other corporations kept tabs on suppliers. By 2002, HP had rolled out sweeping rules for suppliers.
Then, in 2004, the Catholic Agency for Overseas Development, a human-rights watchdog group, issued a withering report, alleging "dire working conditions" by overseas contractors serving the computer industry. That gave her an opening to sell other companies on a common code as a way to avoid confusion among suppliers producing for several buyers. By June, IBM, Dell, and five large contract manufacturers had formed the EICC, and Intel, Cisco, Microsoft, and Sony jumped on board soon after.
Clearly, HP's activist has moved social responsibility up the high-tech priority list, even if the changes are taking place one plant at a time. During that first Foxconn audit, Nixon-Gardiner decided that the machinery was too loud. So Foxconn bought employees some flimsy orange earplugs. Not good enough. Six visits from Nixon-Gardiner later, the company had spent tens of thousands of dollars to put enclosures around the gear, change the blades, and give workers top-of-the-line ear protectors. Now, says Thurman, employees are complaining about how hot their ears get. Dealing with Nixon-Gardiner, he says, "is like being kissed and slapped at the same time. It can make you psychotic -- but it needs to be done." That message is sinking in with the rest of high tech, too.