Partnering up for progress with Arima

Does it matter if your phone is made by someone who is happy in their work? That they’re well paid? Have a voice? Work in healthy, safe conditions with opportunities to develop? We think so. So much so, in fact, that we’re willing to reward progress in worker satisfaction and overall working conditions by paying a higher unit price, and to contribute directly to the ability of the factory workers who make our phones to make a living wage.

The final assembly of our Fairphone 3 is done by our partner, Arima. The company’s headquarters are in Taiwan, with Fairphone production taking place at one of their manufacturing facilities in Suzhou, China. We decided to work with Arima due to their technical capabilities, their quality standards, and in particular their interest in partnering with us to improve employee satisfaction and overall working conditions. Arima understands our values and supports our ambition to increase sustainability from product design through the entire life cycle.

Engaging employees to improve the workplace

Fairphone and Arima work together to improve employee satisfaction, working conditions and employee retention in the factory. Key to this approach is employee input. It shapes our plans and actions, and we seek it out continuously as we implement improvements. Employee participation in workplace improvement is rare in China. It shows true leadership that Arima is working on this together with Fairphone. Fairphone and Arima have together committed to invest 100,000 USD a year for three years in improvements based upon employee input and expert advice.

Our starting point at Arima was an assessment and extensive employee satisfaction survey. The survey, consisting of more than 100 questions, was conducted by a 3rd-party NGO, the Economic Rights Institute, to identify areas for improvement. Focus group discussions with employees and management followed, to dive deeper into the root-causes of some of the survey findings. The outcomes were then subject to an in-depth analysis by Fairphone and Arima. The result was a three-year action plan, including monthly activities and targets for 2019.

The plan takes an inclusive, holistic approach, with training and capacity-building for everyone in the factory, from top management to line supervisors, including employee representatives and production line employees. It addresses issues like employee-management communication, health & safety, living conditions and, even (perhaps crucially) the quality of the canteen.

Achievements so far

Improvements that Arima, Fairphone and our 3rd-party NGO partners have already achieved include:

• Organized democratic elections for new employee representatives
• Constructive dialogue training for management and employee representatives
  (by ERI)
• Communication training for 42 line supervisors (by CCR CSR)
• Health & safety training for 333 employees using the interactive QuizRR training tool
• Introduced a canteen committee, including employee representatives
• Introduced regular employee ’pulse’ surveys to monitor the canteen experience
• Installed security cameras for dormitory safety
• Increased the food subsidy

If progress is made and employee satisfaction is increased by the end of the year, Fairphone will reward Arima by paying a higher product price.

Towards living wages: a direct bonus for employees

Low wages are an issue throughout the electronics industry, and one of the reasons why employees want to work overtime hours. The employee survey and focus group discussions revealed that wages were also a key concern for employees of Arima. In response, we consulted employees on the cost of living, wages and how Fairphone could organise a direct bonus to help employees of Arima towards a living wage.

Employees at the Fairphone 3 packaging line in the Arima factory in Souzhou.

With the support of Arima, we have calculated how much of an additional unit price Fairphone would need to pay as a bonus to allow employees on production lines for Fairphone to earn a living wage. This is 1,50 Euro per Fairphone 3, which will be paid as a bonus directly to Arima’s employees.

Following the advice of the employees, the bonus will be shared with all employees, not just those who work on Fairphone products. They will get this direct bonus on top of their regular salary, starting in November 2019. If this approach were to be scaled up by all brands that partner with Arima, 100% of the factory employees will earn a living wage.

Transforming the electronics industry together

We think that improving working conditions is intrinsically important, but we also believe that it just makes good business sense. By improving conditions for and with employees working on the production lines we are taking a unique approach to changing the heart of the electronics sector in China. Together, our partnership has the potential to make both a value proposition and a business case to the entire industry.

The result we seek is a win-win-win situation for Fairphone and its customers, the factory, and the workers. That’s a long road, and there will be bumps and plenty of obstacles along the way. We’ll continue to share information on progress and results as well as setbacks, and invite other industry players to join the journey.

Imagine a world in which every phone brand rewarded factories for increases in worker satisfaction. A world in which every phone brand cared whether their partners were paying production line workers a living wage, and stepped in with additional funding to ensure they did? The result would be transformative. That’s not just the world we envision for the future, it’s the world that every Fairphone user is helping build today.