CB BureauA report published by Helsinki-based
Finnwatch has put mobile-handset manufacturer Nokia under unflattering
spotlight, charging it of paying measly salaries to workers at its Chennai
plant. Nokia’s Chennai plant, which is the company’s biggest worldwide,
produces more than 300,000 handsets a day and employs over 11,300 people, of
whom 19 per cent are contract workers and 26 per cent trainees, according to
the joint report by Finnwatch, Amsterdam-based Centre for Research on
Multinational Corporations (SOMO), and Bengaluru-based NGO Cividep-India.
The joint report is aimed at understanding
unionization and employment conditions in the mobile-phone factories of Nokia,
Salcomp, Flextronics, and Foxconn in Sriperumbudur, near Chennai, Tamil Nadu. Salcomp
employs about 4,000 workers and makes chargers for, among others, Nokia in
India. Flextronics has about 1,700 workers, while Foxconn employs nearly 6,000 people in its two locations. The report’s damning observation: In sum, most
workers of the studied companies were employed in precarious positions and earn
very low salaries even in the Indian context.
The conclusions are based, among other
things, on interviews of over 100 workers from these four companies during
February”May 2011. Finnwatch and Cividep researchers had also visited the
factories in March 2011 to interview company representatives.
According to the report, permanent
employees at Nokia earn 6,000 rupees ($125) to 11,666 rupees a month, compared
with a minimum wage (in the context of India) of 7,967 rupees a month as
estimated by the Asia Floor Wage campaign. Contract workers received a lower
wage of 4,400 rupees monthly, according to the Finnwatch report. Chennai
workers said they needed at least 9,000 rupees monthly to rent a room and start
a family, it said.
One of the points made by the report is
that most of the workers who were on the direct payroll of Nokia, Salcomp, and
Foxconn started as ‘trainees’ and were kept in this status for 15 months or
more, even though their training lasted only for a month. Nokia did not have a
policy on the time limit that workers remain on contract and did not know for
how long on average contract workers worked at its factory.
Expectedly, Nokia has issued its rejoinder. Spokesperson Doug Dawson said, ‘As Finnwatch states, Nokia pays the highest
salaries in the Chennai area for employees, including trainees. These salaries
are well beyond the local minimum wage. We believe the Finnwatch report uses
salaries in New Delhi as a benchmark, which is misleading.
According to Nokia, in addition to
financial compensation, employees get free transportation to work, occupational
healthcare services, and catering. ‘The wage comparison also didn’t take into
account benefits like occupational health, meals, day care, and transportation.
We have day-care services in our factory for employees with small children. We
believe that we are able to offer very competitive benefits to our employees in
the region,’ the spokesperson said.
Indeed, the Finnwatch report says Nokia
appears to be the most responsive to worker demands among the four studied
companies. ‘Nokia has become a wage leader (in the case of permanent workers)
in the mobile-phone industry in the Chennai area and is the first company that
has recognized a labour union.
Noting that unions have been able to
negotiate with Nokia and Foxconn to get higher salaries for workers, the report
said it is not clear whether the unions have had any impact on other working
conditions so far. Despite some progress, worker unrest has been on the rise in the mobile phone industry in India and this seems likely to continue,it
said.