The return of western economic growth has brought a resurgence in activism over Chinese business ethics – and Chinese consumers themselves are rallying to the cause, says Paul French
The previously rising ethical consumer movement rather slumped when the global recession hit.
Though it never went away, the debate over ethical practices and conditions in China’s factories (as well as elsewhere) waned as consumers in Europe and North America became more concerned with their own perilous living standards. However, with most western economies now back to some sort of growth, ethical concerns are resurgent.
A number of high-profile cases perhaps illustrate the point.
Australia’s The Age newspaper has highlighted concerns about mica (the glittery substance used in a lot of make-up), namely its potential links to illnesses and the use of child labour to produce the substance in India, where 60% of the world’s mica is made.
Concerns have also been raised about mica production in China. In India L’Oréal’s main mica supplier, Merck, uses the consultants Environmental Resource Management to carry out monthly assessments of its mines. Such monitoring, for L’Oréal and others, may have to be extended to China too.
Then there is the issue of animal testing. Body Shop (owned by L’Oréal) has highlighted its concerns at the requirement that all cosmetic products sold in China should be tested on animals – which is invariably an optional requirement in most other markets.
While Body Shop is not on China’s high streets, its products have been available in duty-free stores at Chinese airports. While duty-free cosmetics in China are not subject to the mandatory pre-market animal testing regulations, they are technically subject to random spot tests by Chinese authorities. Body Shop has removed all its products from the shelves at Chinese duty-free outlets while, the company says, it determines the nature of these possible tests.
Apple takes a hit
And then there’s Apple – again. More concerns have been raised about Apple’s suppliers in China – notably Pegatron and the much troubled Foxconn – and workers’ exposure to chemicals such as benzene and n-hexane, which can lead to an increased risk of developing cancer, leukaemia, nerve damage and liver and kidney failure.
Foxconn is also being criticised for pressuring thousands of interns from China’s Xian Institute of Technology to work unpaid overtime producing a range of products including the Sony PlayStation 4.
Apple is working to enforce a maximum 60-hour working week but the fact remains that Apple, and Foxconn more widely, are still attracting bad press in China.
And it seems consumers are more pushy on these issues than they once were. Both New Zealand and Australia have seen active lobbying movements recently to enforce better labelling. In Australia ethical consumer lobbyists have criticised some of the country’s major clothing chains for failing to sign the Bangladesh Accord, established after the horrific Rana Plaza factory collapse of April 2013. The accord requires sourcing companies to reveal the locations of factories in their supply chains, so they can be audited by independent inspectors.
Australian campaigners have highlighted that Bangladesh is responsible for just 6% of Australia’s imported clothing while China accounts for a whopping 73%. Lobby group Choice has said that, given China’s dominance on the shelves, there should be a China Accord, too.
But what of the domestic Chinese consumers who, faced with ongoing food safety concerns and environmental problems, might feel inclined towards ethical consumption? China’s growing middle class may not be able to express itself openly on factory conditions, but issues where people can speak out more openly, such as prevention of cruelty to animals and pollution, are much discussed on China’s vibrant social media sites.
On March 15 China marked consumers’ day – “315” as it has become known. Traditionally it has been about “outing” companies perceived to be ripping off Chinese consumers – Volkswagen, Mercedes and Apple have all taken a media pounding on TV’s now regular “315 Gala”.
Tougher consumer protection laws were introduced this year, increasing the penalties for fraud and false advertising, and beefing up consumer rights regarding e-commerce and direct marketing.
However, following the 315 Gala, China’s social media saw a growing number of consumers asking not just to be protected from scam websites and weak warranties but also for the regulators to start looking at more ethical (and in China this may mean more political) issues such as animal testing, corporate environmental records and labour practices.
What has become seen as a multinational-bashing exercise may now be driven by China’s netizens to take on a wider remit of ethical consumption.
Based in Shanghai and the UK, Paul French is an independent China analyst and writer.China column Chinese business ethics ethical consumer labour practices