Ethical Sourcing & MEC

Financial Meltdown Hits Manufacturing

The global financial meltdown seems to have not hit the outdoor retailing sector, well not yet.  Sales in 2008 for MEC remain higher than 2007. Not that much different from our peers down south.  Informal discussions with them suggest the implosion of the US economy has not rippled to the outdoor trade.  Nonetheless, we're all cautiously watching the market in 09.  

The downturn has hit China.  Exports are down 5.4 percent which means factories are closing and laying off workers.  According to one Chinese report, over 10 million migrant workers have returned to their rural villages because of job redundancies. Only last year our contract factories were lamenting over the difficulty in finding workers.  Today, many are complaining of purchase order shortages.    

Women, Bikes and Manufacturing

We were heading to our next factory visit when our Lexus suffered a puncture on its rear left wheel.  A four inch steel bolt pierced the radial tire leaving its hexagon head jutting from the rubber surface while its body was lodged deep in the wheel.  Lucky for us there was a "mom and pop" tire store 100 metres away.

The tiny garage was deserted except for three weathered looking men smoking and drinking tea while sitting around a card table.  We pulled adjacent to them. One man examined the puncture, make a few "tsk tsk" sounds and then barked for the woman sitting behind a desk in the show room.  The woman came to the car, inspected the flat and proceeded to change the tire.

It was an odd sight.  Here was a women dressed in pink slacks, a blouse and low profile heels operating a lift, hoisting the wheel from the axle, winching the tire from the rim and then reversing all these tasks with the replacement part.  But what stood apart wasn't really the incongruent image of a well dressed woman changing a tire in a garage or performing a traditional male job, but rather it was the singular unhelpfulness of all the nearby men.  They sat, chatted and smoked while she did the work and then when she was done she returned to the office to ring in the transaction.

What's the Bugaboo with China: Part 2

China is top of mind. The Olympics, Tibet, earthquakes, dog food, lead laced toys, smog spitting chimney stacks and a Chinese Milli Vanilli scandel stemming deep from the heart of the politburo make us all wonder  the suitability of China's membership to the global community. These issues are serious and they have sparked a vocal and valid concern from some Members. Here's a sampling of what they're saying: 

Pill Happy & Health Care in the Developing World

Dr. Balachandran was prompt. He came to my hotel room in Madurai within a hour as he had promised in our initial phone conversation. I was feeling rather ill from a diet of malaria pills and spicey Indian food. The doctor carried a black medical bag and had a stethescope tucked deep into his white smock. (I remember physicians making house calls when I was kid in Canada but I don't think they do this now). His hair was jet black with the exception of a contrasting white streak at each temple. He spoke English crisply with a hint of British inflection, linguistic proof of England's colonial legacy on India.

Aunty and India's Openning Economy

India is booming. It's economy grew by 9% last year. This was obvious on my last trip there in May. Subways, freeways and airports, the backbone of bursting industry, were being constructed or upgraded in the major cities.

Much of this growth can be attributed to Dr. Manmoham Singh, India's Prime Minister. Before he was elected to govern the world's largest democracy, he was India's most successful Finance Minister. Under his watch, he opened India's notoriously closed and moribund economy. He introduced competition and lifted some of India's heavy state control over business matters big and small. His goal was to encourage entrepreneuralism and investments. Given the year over year growth he was admirably successful.

Children at Work: Child Labour Part 5

I was 15 year when I got my first job.  It was for a fast food hamburger chain  (You may have eaten there.  In fact billions and billion have).  I worked Friday nights and all day Saturday and Sunday.  I was there for three years and during that time I probably fried over 50,000 burgers. 

Made in Canada - As Long As I Don't Have to Make It

It's ironic.  We want our apparel made in Canada but we don't want to be the ones making it.  So it appears in Vancouver at least. 

               

Beyond Your World & Engineers Without Borders

Get Beyond Your World ...

and you'll see that we humans are really all the same with similar aspirations and fears. Get Beyond Your World is a joint outreach program between MEC and Engineers Without Borders EWB.  EWB is a non profit organization dedicated to alleviating poverty in the developing world. Each year, it sends volunteers overseas to work in local communities.  This year MEC provided gift certificates to each volunteer to help equip them for their sojourn. In addition to improving the lives of the less fortunate, EWB reaches out to school kids throughout Canada. 

Pollution, Social Ills & The Developing World

It's depressingly surprising. According to the United Nations, Canada on a per capita basis produces five times more carbon than a communist apparatchik in China or an impoverished farmer in Sri Lanka. This means the way we live, work and play are 5 times more global "warming" than most people in the Southern Hemisphere. As a country, which prides itself on being progressive, we have much to account for. See for yourself at United Nations Environment Program and United Nations Development Program.

To reduce our ecological footprint, the Canadian government has devised an array of taxes to make us pay for our pollution. For example, when I bought my car three years ago, I paid a battery and tire tax to handle their future disposal. Truthfully, I'm not fond of our onerous taxes but I do support these ones because they allocate a price to an outcome that historically was not considered, namely pollution. In the past, we could dump batteries and tires with abandon. Let someone else bear the cost. Let the environment absorb the waste.  But with our planet in peril, we can no longer.  Now I pay a tax for harming our environment. And the more I pay of these taxes, the more careful a consumer/polluter I will be become. Brilliant. Consumers are price sensitive. Make polluting costly and maybe we can lower our per capita global warming status from five times to four.

Economists call pollution an externality. Something that is a spill-over from an activity like driving a car. Historically, spill overs were not accounted for. Imposing taxes on consumer spill-overs should make us more disciplined polluters.

Not all externalities are environmental. They can also be social. Take when I lived in Toronto, the city issued daily health warnings on air quality. Car emissions on hot muggy days posed serious challenges to individuals with respiratory illnesses (like my asthmatic daughter).  Respiratory disease caused by car fumes is a social externality

The big challenge facing government is finding similar policy instruments to reduce industry driven externalities. Carbon taxes on corporations is the next logical step. On this front, our government is non committal.  However, public officials have introduced with some success, policy tools to control other externalities like waste water discharges and unemployment. For example, in our contract wash facilities (a wash facility is a commercial laundromat that washes garments before they're shipped to MEC), a city official will audit its water discharges monthly for compliance to municipal standards. To meet those standards, the facility is required to treat and monitor its liquid waste.  This is costly.  On another front, the same facility must pay a "employment insurance" tax to finance a government social safety net to support retrenched workers (a spill-over from industry restructuring).   Again, this adds to the facility's operating costs.  These and other legitimate taxes to protect our local water supplies and to make losing ones job less harsh are admirable and necessary.  But there is a downside, namely an inability to compete with Asian factories where costs are low and externalities not regulated.

MEC, like all retailers, is shifting increasingly to the developing world to secure more competitive goods.  But there is a negative.  Namely, by buying abroad, we "export" our externalities to impoverished countries where environmental and social standards are weakly enforced.  This became evident on my last visit to Asia.  Many if not all of our suppliers send their waste materials to landfills which for the most part are poorly regulated.  This is extremely problematic.  For countries like China and India, where fresh water is increasingly scarce, possible toxins from land fills will eventually leach local water tables and worsen shortages.  At this moment according to the UN, there are 1 billion people who don't have secured access to drinkable water.  If we don't mitigate the spill over effect of manufacturing, we'll soon be adding to this number.     

A second example is social benefits. The majority of suppliers don't fully subscribe to their host country's pensions. Thus, when a worker is injured or retrenched, inadequate funding makes their social safety nets unworkable.  The incapacitated worker has little recourse.

Sourcing in the developing world is financially attractive.  Labour is inexpensive like most other things.  But this low-cost has a negative outcome.  And that is pollution and social ills spilled over by factories are absorbed by workers and impoverished communities.  They are not passed on to Western consumers nor reflected in the price of gear in our stores. 

Canadians have a huge environmental footprint. Five times more than the average person in the southern half of the world.  This isn't sustainable given our planet is in peril.  Neither is our reliance on low cost factories in the developing world.  They may sustain our material needs but they do so by mortgaging their local environment and workforce.   It's unsustainable to the developing world.  Let's stop and reflect on all of this.  And let's find our conviction to foster change.      

Evil vs Evolution

There is unspeakable evil in this world.  Perpetrated by governments, businesses and individuals.  The victims are typically the vulnerable, such as women, children and the impoverished.  When evil happens, we're predictably moved with compassion and just anger.  We want to comfort the victims and forcefully end the brutality.

Dictatorships are evil.  Tanks bulldozing citizens who dare to exercise their inalienable right to speak out is wrong.  As a retailer, MEC needs to deepen its appreciation of this given its sourcing model participates in the economy of these despots.  As consumers, we too need to reflect on our participation because many of our consumer goods (e.g., electronic devices) are made or partially made in despot regimes or societies with grave human rights flaws.  As consumers and retailers, we rely on the economic disadvantages of flawed regimes.   

Countries that don't respect the rights of their own citizens to speak freely or to choose their leaders are evil.  However, this evilness doesn't necessarily equate to dumping inferior goods on the global market or the clear cutting of forests.  Evilness contributes to many of these challenges and likely compounds them but in itself, its unlikely the root cause.  Rather, its ignorance, shortsightedness, inefficiency and all the other debilitating traits of under-development that drive the destruction of our environment or the manufacturing of defective goods.      

Only 4% of MEC's branded merchandise is made in India.  Small but important as our organic programs originate from this large (world's biggest) and stable democracy.  Despite all the advantages of free elections, India is plagued with serious social issues that stem from a deeply entrenched caste system.  In a recent Wall Street Journal article (December 27, 2007), a villager's wife and children were bludgeoned to death because the husband successfully lifted his family from its ancestral caste/occupation of handling rotting cow carcases to that of small scale farmer.  His success helped finance his son's college education, daughter's English language training and simple material rewards like a cell phone.  However, such upward mobility incensed his neighbours because as a former "untouchable" in India's caste ladder, he dared to achieve more.   

Democracy in itself doesn't necessarily lead to equality or a better working environment.  Our India contract factories share many of the same payroll and working condition issues of the Chinese, Vietnamese, Thai and Sri Lankan factories in our supply chain.  Rather, education and economic development/trade in combination with democracy/freedom of expression are fundamental to social mobility or better factory conditions.   

There is very little comfort we can offer to the Indian farmer who lost his family to such madness.  Evilness pervades our world and it is exacerbated by both despot regimes and under-developed free societies.  MEC's sources from these two worlds and it benefits handsomely from the disadvantaged.  MEC has an obligation to understand this and to engage its trading partners to evolve from the underdeveloped to the developed.  This is Ethical Sourcing and this is my goal for the new year.  To shift the focus from evil to understanding the huge debilitating forces of under-development.   

 

The Wages of Sin is Death & Excess Money Supply

"The wages of sin is death" wrote Saint Paul to the Romans. He meant if we live excessively and without moral parameters, we’ll die spiritually. He was not only bang-on concerning how we treat ourselves and one another, he was also prescient, unknowingly, about the dangers of excessiveness in the material world.

Right now there’s way too much money circulating in China and it’s created a building bubble. Speculators, motivated by abundant cheap borrowing have invested billions to build buildings, all with the dream of finding buyers and tenants. But as with all bubbles, hope and speculation rarely materialize. Along a 25 KM stretch from Shenzhen City to our factory in Pingshan Town, I counted 52 empty residential high rises and office towers. (And these were only the structures visible to the eye while driving along the freeway. Imagine what lies beyond the horizon!).  These buildings, enveloped by bamboo scaffolding and green synthetic mesh, were half finished with their structural frames complete but empty throughout. There were no construction workers or cranes in sight. It was eerie looking at rows and rows of temporarily abandoned towers.

The first time I witnessed this excess was last spring in Beijing. From my hotel room on the 17th floor, I could spy into the cavernous offices of two beautifully finished but vacant office towers in the city’s financial district. At that time I found it odd but thought no further. Just yesterday, while driving to our factory in Qingdao, I spotted similar empty or half finished buildings throughout the region, comparable to what I’ve witnessed in Shenzhen and Beijing.

Building bubbles are worrisome because they encourage inflation. Picture fifty-two buildings along a 25 KM stretch competing simultaneously for construction workers, building materials and services (e.g., engineering, architecture). The more everyone wants of one particular thing, the higher its price becomes. Eventually, this phenomenon takes a life of its own and spreads to other sectors of the economy.  

Construction bubbles also have a negative impact on the environment. They encourage wasteful consumption of natural resources (e.g., for building materials) and they unnecessarily add to global warming (e.g., carbon emissions from making building materials).

The building craze has a direct impact on factories. Every factory I’ve met on this trip, whether in the south or north, is having a hard time finding workers. Unimaginable if one considers there are over 1.3 billion people in China. But due to the construction bubble, restrictive migration policies and other economic realities, workers are becoming scarce or at least temporarily. And as workers are harder to find, wages will rise. As they currently are within our supply chain.

Saint Paul saw the light at Damascus and he immediately understood the necessity of constraint. Right now China could benefit from someone like him. Not only to encourage moral parameters but to shrink the supply of money. Because the wages of sin is spiritual death and the consequences of too much money in circulation are inflation, waste and climate change.

You Got to Go Through Hell Before You Get to Heaven

Jet Airliner

Goodbye to all my friends at home
Goodbye to people I've trusted
I've got to go out and make my way
I might get rich you know I might get busted
But my heart keeps calling me backwards
As I get on the 707
Riding high I got tears in my eyes
You know you got to go through hell
Before you get to heaven

   by Steve Miller

Ninety years ago my grandfather said goodbye to all his friends and the people he trusted.  He immigrated to Canada to make his way. With his small savings added by loans from his family, he bought passage on a steamship for Vancouver and paid the mandatory $500 head tax to enter Canada.  Ottawa desperately needed cheap labour to build rail lines, dig coal mines and harvest trees - effectively to develop the West. 

The Chinese were ideal workers with one exception, they were of the wrong color.  As labourers, they were formidable, accustomed to harsh conditions and long hours.  And they would work for about half the market rate.  The only drawback they were not of European stock and thus threatened to dilute Canadian culture if large numbers were given entry.  To manage this necessary but distasteful flow, the Federal government imposed a hefty entry fee, which applied only to the Chinese.   

The day my grandfather left his village in southern China was the last time he would live with his wife.  Canadian immigration laws prevented Chinese wives from joining their husbands. Husbands could return to visit their families, as my grandfather had done, but they could not sponsor their wives to migrate here.  The reason was shrewd and simple. Prevent spouses from coming here and Ottawa can cap the Chinese population and even induce its decline via natural death rates. 

It took several decades for Canada to evolve from its racist immigration policies.  During that period, my grandfather worked in a string of low status and low pay jobs.  He was a labourer, houseboy and cook.  I don't recall how he felt about all of this but I do believe he came to terms with his lot.  His adopted homeland, despite its flaws, presented a security and opportunity that escaped his country of birth.

The Chinese are everywhere.  Their diaspora really took off in the 19th and 20th centuries.  This first wave mostly emigrated from Southern China bringing with them to the world the now all so familiar Cantonese dialect and style of cooking.  Currently, China is undergoing a second wave of migration.  It's estimated that within the last 25 years, 140 million labourers moved from farms to the cities.  And partially because of this migration, Chinese cities have grown from 170 million inhabitants to 540 million.  It's the largest shift of any population in modern times and the fastest rate of urbanization known to human history.      

The sudden growth of Chinese cities poses huge problems for Beijing.  First, the doubling or tripling of urban dwellers places enormous pressure on city services (e.g., schools) and infrastructure (e.g., waste removal). Second, a giant migratory workforce (estimated to be in the 100 millions) shifting homes frequently makes it extremely difficult to administer universal programs such as health care.  And finally, intensive urbanization invites a host of socioeconomic problems like ghettos or crime and ecological pressures as in depletion of water tables or the rise of car cultures and related pollution.  How China deftly handles these complex challenges will underscore it's modernizing efforts. 

The current diaspora in China is really not that much different from the earlier ones.  Like my grandfather, today's migrant workers have left their homes and traveled afar to find their riches.  They too will perform grueling work in quite unjust settings and for little material reward.  And at the end of their journey they would have toiled incredibly hard for modest gain.  But their hard work will open the door for future generations, as my grandfather had done for his.  If we can understand this sacrifice of one generation for another, we then can take rightful comfort in the verse "you got to go through hell, before you get to heaven". 

 

"I wanna, I need it", the Rights of Man & Global Warming

The toughest thing about business travel is the time away from my daughter.  On average, I spend three months of the year out of the office.  I've been doing this since she was born and she's now four.  My time away makes me acutely aware of all the rapid changes she undergoes as she matures from a baby to a toddler.  For the first few years, the changes were notably physical like being a bit taller or having a thicker mop of hair.  In the past six months the changes have become more conceptual.  Currently, she's fascinated with arranging her collection of chestnuts or acorns according to either their likenesses, dissimilarities or what ever fancies her at that moment.  Each time I come home the best moment is discovering her differences.  But good things fade and my excitement dims as we inevitably return to the all familiar toddler whining of "Why? Why? But I wanna, but I need it".  Nonetheless, it's all painfully good and for sure the next time I'm traveling I'll be missing her.

Right now, I'm sitting on an Airbus heading for Hong Kong.  It's a four turbine engine emitting 2.4 tons of carbon per passenger (return fare).  The flight one way takes about 14 hours flying at an altitude of 10,500 meters over a distance of 10,000 KLMs.  If you add up all the discharges of my flights, and my direct carbon emissions (car, heating) and indirect (supply chain discharges to produce and ship my food, clothes and etc.,), my household generates about 40 tons of carbon per annum (the average American home produces 55 tons). 

According to the UN, this is almost six times more carbon than the average household in Africa, Asia and South America.  Wow, If this is true, we ought to ask why we are so hot and bothered by the environmental practices of China or any of it's non democratic peers?  After all, we North Americans reportedly cause way more global warming than anyone else.

But the developing world is catching up.  Not in the next few months but within the decades to come.  They aspire for our middle class lifestyle.  They want comfortable homes with cars, flat screen TVs and stylish furnishings.  They want predictable food supplies, basic health care and proper schools.  They want good jobs.  In effect, they want the security, opportunity and leisure you and I have probably known for all our lives. 

Unfortunately, what they want and what we have are no longer sustainable.  The planet can't absorb the environmental costs of North America's households and lifestyles let alone the introduction of several hundred million Asian families mimicking our habits and estates.  It can't be done.

Everyone of us has an undeniable right to a safe home, good schooling, decent job and spare time to do nothing.  Ironically, this very fundamental right is driving global warming and keeping Al Gore sleepless at night. 

I'm impatient for my daughter to leave her "Why? Why? But I wanna, I need it" stage.  She's eternally adorable but nerve shattering at times.  Unless, we find some new technologies or natural resources, the middle class lifestyle we all want will end up destroying our planet.  Because I seriously doubt that anyone of us either in the Western World or in Asia will grow out of our collective phase of "Why? Why? But I wanna, I need it".  Unlike long suffering parents who must always remain at their child's side, our fragile planet has finally lost its patience with our demands.   In due time the rage of its temper will literally be visited on our shores and skies.

To understand this google GEO4 (UN Global Environmental Outlook 4) and to change this madness check out David Suzuki.  We can do it! 

 

Globalizing Equality

Each minute a production line is not moving widgets from one assembly station to the next is costly to the factory. That's because money is only made when people and machines are busy assembling components.  When they're idle profits are not being generated while costs continue to accrue as the factory pays for the ongoing electricity, machinery and people.  Hence, the immense pressure to keep people and machines busy in factories throughout the world.

Last month, we bucked this trend by requiring our Canadian suppliers to shut down their production for one hour while we conducted worker rights training on the production floor.  Over four hundred immigrant women sewers, who make about 20% of MEC's branded merchandise, were introduced to basic human right concepts.  (MEC absorbed 50% of the factory's cost for the down time).

The training we conducted in Canada is identical to the one we want to give to our Asian factories.  It centers on the inalienable right of a worker to a safe work environment, proper pay and a workplace free of harassment.  These standards are universal and apply to every worker regardless of their nationality and occupation.   Just as everyone is entitled to these rights, everyone is obligated to protect and champion them.  This "take" and "give" approach is at the philosophical heart of human rights.  We in the Western world are extraordinarily lucky in that our governments have put in place multiple measures to protect our rights.  In the emerging economies, people are less fortunate.  Their respective governments have less interest and fewer mechanisms to advance what we enjoy.  With this in view it is incumbent of us to not lose sight of the inequality around us and to actively promote the rights of individuals everywhere.  If we truly did this, we would surely globalize equality. 

 

Globalizing Supply Chains & Equality

Witnessing the foreign take-over of iconic Canadian companies or the migration of local factories to overseas is unsettling.  It makes us feel vulnerable.  It suggests that we’re a bit less “Canadian”.  These feelings are real.

I spent my childhood in one of Canada’s prettiest cities, Victoria.  During the 1970’s, it was a quiet town full of mom and pop shops and Canadian chain stores.  Rush hour along the commercial core started at 4:55 and ended at 5:05.  Today, some thirty years later, Victoria remains painfully sedate and drivers in the downtown core can still expect to be idling in traffic for a full 10 minutes but what has changed though is the demise of local shops and retailers.  The independent electronic stores that dotted Yates and Douglas Streets have been replaced by an American big box chain.  The three department stores, which anchored the city, have faded.  Eatons and Woodwards were buried in the 90’s and the remaining one is moribund but lingering thanks to the life support of a foreign investor. 

The changes in Victoria’s retail landscape and our national economy are driven by globalization.  Globalization is foreign companies buying local ones and vice versa.  It’s also the amendment of Canadian laws and practices to conform to international ones.

Probably the biggest impact of globalization on MEC is on its supply chain.  From 2004 to 2006, the percentage of MEC labelled merchandise made in Canada dropped by almost 10% to 37.5%.  This portion will likely drop further in the years ahead as local suppliers relocate their operations overseas and prices become even more competitive. 

In 2007, two long term local suppliers gave MEC notice that they will not be accepting any future orders because they’re shuttering.  Others have not been that explicit but are instead running their operations on a short term basis as if they have one foot out the door.  The movement of production offshore is tough.  Workers (read Asian immigrant women) will lose their livelihood and the local tax base and economy will dip albeit temporarily.   

Economists call this painful transformation structural adjustment.  It’s the ongoing shift of low skill and labour intensive industries, in wealthy nations like Canada, to more value added and knowledge intensive ones.   Translating this to the lives of factory workers, it means this: lose your job, collect employment insurance and eventually find another low pay occupation in a fast food restaurant or hotel.  However, your kids will likely enjoy the fruits of structural adjustment by taking positions in the banks or computer companies.  (This is exactly what happened to my family and those of my Asian cohorts). 

Living through the transformation of Canadian industries or the foreign take-over of domestic companies makes many of us uncomfortable.  It implies uncertainty, weakening of Canadianism and vulnerability to “outsiders”.  That’s how I feel especially when I witness the shift of MEC’s supply chain to overseas.  But on the flip side, does it really matter?  Whether an Asian immigrant woman in Winnipeg sews a button hole or changes bed linen in a fancy Montreal hotel, it’s really all the same.  They're both  in low status and low pay jobs.   Maybe the real issue is not the shrinkage of the local textile trade but it’s shrinking the number of women (and the impoverished) in occupational ghettos both in Canada and abroad.  Let's be daring and thoughtful by fighting for the latter and less so for the former.       

Abandoning our Values & The Man with the Cart

There are a number of vocal members who feel that MEC should only be sourcing from Canadian factories because it supports local jobs.  Canada is also a country with high human rights and environmental standards.  By sourcing in the developing world where the regard for people and the environment are typically short, MEC is abandoning its core values.  Even worse, according to these opinion holders, our offshore merchandising props up morally decrepit regimes and aggravates environmental instability.    Instead, we should immediately boycott all products from China, India, Thailand, Vietnam, Israel and Sri Lanka because of their human rights and environmental records and demand justice from the respective host governments.  Until these governments come around, we'll source only from like-minded countries.

There is merit to such a view.  After all, Apartheid slowly disintegrated partly because of the imposed sanctions on South Africa in the 80's.  "Why not reinvigorate boycotts?" asks the proponents of isolation. 

Boycotting the third largest economy in the world (China) or half of the planet's population (Asia and Indian Subcontinent) is today impossible.  Asian economies directly influence our comfortable lives not only in terms of cheap clothes or computers but also in the financial markets where they are major holders of American debt.  Whereas racist South Africa was a minor player in the global economy, isolating it had little impact on Canada's standard of living and economy.  The world has changed considerably since Apartheid's chief advocate President Botha condescendingly wagged his finger.  To explore these constraints click Why Can't You Source More in Canada and then hyper-link to Why Do You Source in China.  We source overseas because of economic necessity and pragmatism.  And because we deeply believe that business can make factories safer and the human condition a little better. There is equal merit to our views. 

To some members this is just a sly intellectual contortion to justify what we do.  As one person writes after having read the referred pages "... yeah, yeah I read your website giving further insight on this topic, but I'll be honest with you. I think you're pulling the merino over my eyes."   

We respectfully disagree.  We're not trying to shield her eyes or anyone else's.  Quite the opposite.  We're pushing candidness and dialogue as we develop a better sourcing model while meeting our members' product expectations. 

In any disagreement between reasonable parties, there is validity on all sides.  Our current debate is no different.  Nonetheless, I often wonder what the typical worker behind the assembly line would think about all of this.  I suspect, if she were like my mother, not much.  She would politely smile, attend to the mindless task at hand and ponder about tomorrow.   

As a young child my mother was a war refugee.  During WWII, the Japanese bombed her village in Southern China in preparation for a large scale invasion.  Aware of the brutality of the Imperial Army, my maternal great grandmother fled with my mom and her toddler sister.  Together, the three set off by foot for Hong Kong, a Protectorate still in the hands of the British. 

My great grandmother was the principal caregiver of her extended family.  She was also of the last generation in China with bound feet.  Her foot was no bigger than your fist. With what ever belongings they could carry, my mother and her family set off by foot on a several hundred mile journey.  Less than a week on the road, my mom's left foot got infected and ballooned several sizes larger.  She couldn't walk.  Her elderly grandmother was already carrying her younger sister plus a small sack of personal effects.  It was impossible for her to take on a sick child.  They were immobilized.   

At that point in time if you weren't on the move you would die.  Bandits roamed the countryside, the Japanese were approaching and dysentery was rampant.   My mother and her family were terrified. 

From nowhere a stranger passing by with an empty cart stopped and offered to carry my mom to her destination.  He saved my family. 

For the vulnerable found either in conflict or in factories, what matters most are not well constructed arguments but it's action.  It's our joint activities with factory managers to install more adequate ventilation. Or our financial threats that drive stubborn factories to eliminate "Oliver Twist" like practices.  These small gains resonate much deeper than words ever will.  This is the heart of our Ethical Sourcing program.  Everyone of us is vulnerable and in our moment of weakness we look to the man with the cart and less so to the one with the words.   

      

Jesus Freaks, Corruption and 140 KMPH in Traffic

Remember when Jesus freaked at the Pharisees and merchants who were conducting business in the temple?  Christ wasn't a communist opposed to the market.  He was just angry at the debasement of faith and conviction.  There is something about factory corruption that irks us.  It's because we rightfully want to know the factories that make our tooth paste, toys and dog food are on the "up-and-up".  No one wants to do business with a supplier who uses industrial grade chemicals designed for heavy manufacturing in consumer products.  We should all freak. 

Likewise, factories that cheat workers by exposing them to debilitating work conditions or unlawful wages should also inflame our ire.  After all it's an affront on the dignity and security of another being.  With these factories, we should be tossing them out like the Chosen One did with the money changers.

There are limits to our indignation.  The August 4th Economist Magazine writes brilliantly of the cultural nuances of corruption in China.  It states that corruption is largely driven by greed but there is a component that is a result of a different set of beliefs.  For example, Confucianism emphasizes loyalty to family and friends first.  Second comes "face" and finally conformity to laws.  It writes "even then, the law is seen as malleable rather than absolute".  Let's be clear, the Economist doesn't endorse corruption or the current mess in China but instead offers insight.  It seeks to balance our indignation.

In the mid-90's I worked for Foreign Affairs Canada.  Part of my job was to review our Embassy rating of countries.  Canadian diplomats in their postings all over the world compiled profiles of their host countries on a number of indicators (e.g., corruption, freedom of speech and etc.,).  Most of the indicators were no brainers as they conformed to human rights law and philosophy.  Other's such as graft I found a bit more tenuous as some cultures don't see it as black and white.  It would serve us well to balance our sentiment toward factory corruption with a more enlightened understanding of cultural nuances.

The biggest culture shock I endured in China was not the consistent smog that hides the sun in Chinese cities nor the enormous wealth adjacent to wretched poverty but it was instead two simple cab rides to the airport.  On the first occasion, the taxi, a shiny new red Volvo, shephered me from my hotel in the Bund neighbourhood to Shanghai's Pudong airport.  Taking the A1 and A20 freeways, the cab drove at speeds of 140 KMPH between lanes, on the shoulder and in "bumper-to-bumper" traffic.  We dodged merging tractor trailers and weaved through lanes and lanes of cars driving exactly like us.  Imagine the unruly traffic patterns of Ho Chi Minh city or Delhi but accelerate them almost ten fold.  Understandably, I was terribly frightened. 

Six months later I was heading for the same airport from the same hotel.  On this occasion, I instructed the driver via the bell hop to take his time and drive only at the speed limit.  Instead, the worn looking VW taxi drove identically to the Red Volvo.  Even worse the young driver would periodically brush his tightly groomed hair while aggressively passing those decrepit looking blue dump trucks that are everywhere in China.  I feared for my life and I still tipped him.  He was just too affable.

I recounted my taxi experiences to a local and he told me that for some cabbies getting passengers to their destination quickly is a sign of proficiency and zealous service.  Driving like what many of us would deem as crazed is apparently regarded as good customer service in Shanghai.  This is one cultural norm I would opt out of.

There is a body of human rights norms that is universal to every culture.  Standards like the right to a safe workplace, child labour, health and etc.,  There's also a series of standards that are nuanced by culture.  Graft is one of them.  MEC's Ethical Sourcing program is well respected in some quarters in part because of our ability to spot universal norms from cultural practices.  And maybe even more pivotal to this success is the simple feat of not taking rides from overly eager cabbies.

       

Why Men Earn More & the Price of Human Rights

Did you know that in many occupations women and men do the same work but the former only makes about 65 cents for every dollar men make.  This is pay discrimination.  When I finished grad school I did a year at the Canadian Human Rights Commission and investigated pay equity complaints.  There was this one case where a woman flight controller (with many years experience and a ticket) was making less than a recent male hire.  In fact she made less then all her male peers.  In the past, women public servants in our Federal government were paid less than their male peers in similar jobs.    For details hyperlink Ottawa.

One reason why pay discrimination exists is because of traditional gender roles and the valuation of them.  For example, traditional female occupations are supportive ones like nurse, flight attendant, school teacher secretary and etc.,  Being in a support role is not valued as high as say a plumber or problem solver (historically seen as male occupations).  Furthermore, traditional gender roles value men more then women.  Hence, men are paid more.  There's many other reasons why pay discrimination occurs.  Just google the key words.

At first I thought all of this was a crock but when I saw the data and trends, it was obvious.  I support equal pay for work of equal value.  What is befuddling are the tens of million spent on legal fees by our Federal government.  One department (Human Rights Commission) on behalf of the workers/unions contested another Federal department (Treasury Board).  In other words, the Feds were battling itself, all financed by our horrendous tax brackets.  Mind you the deserved redress amounted to billions spread over thousands of discriminated female workers. 

Regrettably, money places a ceiling on human rights principles.  I visited a factory in May and it reported that its labour turnover this year is at 30%, and its material and labour costs have risen by 10-30 percent.  Negating the inherent posturing by some factories (to obtain better prices from their buyers), there is inflation happening in our supply chain.  At the same time retailers are looking for better prices from suppliers. 

So what does this all mean to factories and ethical sourcing?  It means this, in the next few months we'll begin to dollar quantify the improvements factories shall take to meet our code of conduct.  Workers are notoriously underpaid in factories throughout the developing world.  To get them to approach legal minimum wage will mean a spike in their operating costs.  One consultant firm estimated labour costs hiking up to $360,000 US per annum for a factory of 500 workers.  This cost will go somewhere including possibly at the cash register.

Unlike the public sector where pockets are deep and hundreds of millions can be spent on battling human rights principles, retailers operate in finite economies where price hikes can be disastrous. We all support equality.  But will we support it at the cash register?

"Girls aren't worth it"

The newborn was placed in an earthen pot under the sun.  Reportedly, she was terribly weak and would soon die anyways.  The pot only mercifully hastened the inevitable.  I don’t buy it!  The newborn was my mom.  The woman who abandoned the infant was my maternal grandmother.  No loving parent would forsake their child – especially one struggling to live. 

My mother was born at a time when the landed class in China faced its sunset and the turmoil of the Japanese occupation and Chinese civil war were on the horizon.  My maternal grandparents were wealthy landlords who led leisurely lives and were akin to cultural traditions that favored sons.   
   
My mother was the first born - a double liability.  Tradition favors boys, especially the first born, since they can continue the family name, inherit the family wealth and eventually support their aged parents.  Female offspring don't.  They marry into the groom’s family, while adopting his identity and resources.

Women just about everywhere are subordinated to men.  They typically earn less, hold few positions of authority (look around your office) and are of lower status than their male peers.  This inequity is not a feature of political or economic systems.  It's a trait of men. 

For greater details on gender inequality click this link UN and the Status of Women.

A depressing and real consequence of this inequality is the violence perpetrated on women.  Right now as you read this, in parts of the middle east, a girl is being forcibly circumcised (genital mutilation).  While in other places like the Asian sub-continent, a raped women is being stoned, often by her own father, because of the "dishonour" the rape has brought to the family.  In parts of Asia hundreds of baby girls are being sent to the West for adoption simply because they're not boys.  This barbarism doesn't escape the west.  It's only more shaded.  It's found beneath domestic conflict and violent crimes. 

One hopes we have become more civilized.   But I'm not sure.  From the time my mother was left to die under the sun to the recent death of the young Egyptian girl from a botched circumcision, the violence against women hasn't changed.  I hope for my daughter's generation.   

In our contract factories, women labourers dominate the sewing machines.  In Canada, it’s Asian immigrant women who occupy those positions.   Factory work offers some economic mobility.  It’s a chance for a young factory worker to live on her, buy some material goods and support her family.  The work is hard and the independence gained small.  What a trade off!

Part 2 – Gender and the Factory Workplace – coming soon. 

We Believe in Social Justice - We Believe in You II

Two high school students were awarded MEC's first ever human rights scholarship.  They are Raena Kai Fisher and Brenda Chow.  Both are finishing high school in Vancouver, BC. 

Congratulations.  MEC will be purchasing their text books for the entire duration of their post secondary education.

Here are the essays:  Download mecscholarshipraenakaifisher_2.doc Download brenda_chows_social_justiceessay.doc

Good luck with your studies Brenda and Raena. 

Cheers

60, 80, 100 Hour Work Week

Can you imagine working 60, 80 to 100 hours a week for 16 weeks straight without a day of rest each week.  Well this happens in factories throughout Asia. 

A typical day may start at 8:30 with a 10 minute break at 10am, hour lunch at 12 noon, and another 10 minute break at around 3pm.  The official work day ends at 5:30 pm.  However, the huge demand from Western brands and consumers and the quest for greater sales by factories have led to much longer work days.   Instead of ending work at 5:30, workers often return from a 1 hour supper break to work late into the night, often ending at 10 pm or even later.

Local laws clearly cap overtime at about 12 hours on top of a regular work week of 48 hours.  Workers must have at least one day of rest.   Obviously this is rarely being adhered to.

To get an idea of what work should be like click this Fair Labour Organization.

Compounding the long hours is the often practice of not paying workers the ovetime pay earned and or financially penalizing workers for not "volunteering" to work overtime. 

So why does this matter?  It matters because these long work hours are unhealthy to the incumbent to society as a whole.  Imagine attaching a screw to a widget for 10 hours a day.  Repeating the same task hunched over a desk connected to an unstopping conveyer belt of widgets waiting to be processed.

Before we blast India, China, Vietnam and just about every developing economy with a factory sector, let's recognize that this is a reality partially caused by global capitalism and our own western consumerism.  It's sobering and mind boggling. 

"Is life better?" ponders Sandy the CFO of MEC

Our CFO (Sandy) asked is life better for workers who leave their farms and villages for work in factories.  He's originally from South Africa so he's seen first hand the horrors of racial conflict and socio-economic deprivation.  Is life better?

Life in a factory (making retail goods) is tough.  The hours are often long (8 - 12 hour days), the pay poor (about 40-80 cents per hour in the developing world), and the work repetitive and mind numbing.  It's an occupation shunned by most workers in the Western world (one reason for the exodus of factories from the developed world).  In Canada, the vast majority of workers in our contract factories are not Canada born but Asian immigrant women.  This speaks volumes. 

In the emerging economies, factory work in spite of all its serious faults, provides an opportunity for workers.  A salary of say $1,200 US per annum allows a worker to seek material comfort (e.g., cell phone), support her family and have some financial means to make possible life changing decisions.  A life on a farm or village typically doesn't afford this.  The Wall Street Journal (Nov 8, 2004) neatly chronicles the working life of an 18 year old and the socioeconomic mobility factory work has given her.  Working in a factory can make life better.       

My dad pushed a broom for most of his working life and likewise, my mom cleaned chickens.  Both had low status menial jobs (dad was unionized, mom minimum wage) that only poorly educated immigrants took.  Their lack of job status caused me considerable embarrassment throughout my teen years.  Regardless of what I felt, my parents "accepted" their station in life because it offered them stability.  They escaped the wreckage of war, civil war and famine.  So cleaning up after others, for over 20 years, was the price to pay!

Improving the human condition in the developing world is always a balance between social justice and economic opportunity.  Working in a factory is everything horrible that Karl Marx laments but it also paves a new avenue for individuals and nation states to improve themselves. 

Is life better for the factory worker?   Was life better for my parents?  For many including my folks I suspect it is.  But take note, it's a relative "better" in comparison to the alternatives and it'll never be good enough for the likes of you and me.       

We Believe in Social Justice – We Believe in You

MEC launched a pilot Human Rights Scholarship to support under-privileged kids (from Vancouver) entering a post secondary program.  The Scholarship will buy the text books for the duration of a student’s post secondary education.  Imagine not having to buy a text book for your entire degree.  To win the Scholarship, students must write a simple essay on human rights. 

Our goal with this initiative is to get more high school students involved in human rights.  After all they are our future. 

A few years back a whole bunch of coworkers had kids leaving home for university and college for the first time.  They were fresh faced 17 & 18 year olds entering a fantastic stage in their lives in terms of learning, independence and exploration.  What really struck me about this was that across the globe, their peers in the 1000s were also leaving home for the first time. But instead of going to school, they’re going to work, eat and live in a factory.   In some ways the lives of these two groups couldn’t be so different.

In 2008, we’re looking to expand the Scholarship to two other provinces.  Perhaps, we can offer something similar to the young factory workers.