Submitted by International Finance Corporation
BEIJING- July 12, 2007 "“ A new report published today determines that collaboration between suppliers, international customers, local government, and NGOs is key to improving social and environmental conditions in the information and communication technology (ICT) industry in China.
The report results from a year-long collaboration between FIAS - the World Bank Group’s investment climate advisory service, Business for Social Responsibility (BSR), the Electronics Industry Code of Conduct (EICC), the Global e-Sustainability Initiative (GeSI), and Shenzhen Electronics Industries Association (SEIA).
"The highest social and environmental standards result from working closely with suppliers, partners, and other stakeholders throughout the supply chain," said Bonnie Nixon Gardiner, Global Program Manager at Hewlett Packard, which is a member of both GeSI and the EICC. She added, "Collaboration between the ICT industry and local stakeholders to build greater understanding and capability will help achieve long-term sustainable impact."
The report highlights that private sector monitoring of the supply chain is necessary, but rarely sufficient to solve social and environmental challenges in Chinese supply chains. In addition to monitoring, the ICT industry should collaborate with the government and civil society to put resources into capability building.
The recommendations in the report were discussed at a workshop in June 2007 in Shenzhen with Chinese government authorities, the labor union, international buyers, local suppliers, and civil society organizations.
The conference highlighted that capability building requires that local employers better understand the cost and benefits of corporate social responsibility. "Better labor practices can reduce turnover and increase productivity, but many suppliers do not keep track of these benefits and are therefore not convinced of the business case," said Wei Dong Zhou from BSR China.
Another challenge is that small and midsize companies have fewer resources to invest in improving social and environmental practices. "An organization like the SEIA plays an important role in helping member companies prepare for the increased demand for social and environmental requirements," said Yanjun Xu from SEIA.
One of the outcomes of the conference was agreement on a six-month pilot project in Shenzhen. The pilot aims to improve worker engagement and integrate social and environmental standards into factory operations and associated management systems.
"Achieving sustainable labor and environmental practices in global supply chains requires an enabling environment that is supported by the government," said Annemarie Meisling, Private Sector Development Specialist at FIAS. "Hence we encourage the local government encouraged to participate in the pilot project through a public-private partnership to ensure a long-term sustainable solution."
The partners in the project include:
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services.
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