“We are trying to find out what fair means”

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In its Cost Breakdown FairPhone included “a premium on every phone produced that goes into a worker welfare fund for the benefit of the factory workers”. We asked Roos van de Weerd from FairPhone what’s behind all this.

Faire Computer: About 10 Euro of every single Fairphone goes to your Made with care program consisting currently of two projects, a workers welfare fund and social assessment of the working conditions. Is that different to what, say, Samsung, Apple, Nokia, or Motorola are doing?

Roos van de WeerdRoos van de Weerd: The thing with our cost breakdown is that it is our business case expressed through a single phone. Although other companies do annual reporting, we don’t know how other manufacturers operate, how they dedicate their budget, because their reporting is not based on the production of one single product. So I cannot possibly give you an answer about what they spend their money on, but I am sure that each company dedicates part of their budget to CSR activities. What I can say is that it is our mission is different. We are making a phone to open up the supply chain and to employ commercial strategies to create social impact. This is a different driver from most other companies who are after profit maximisation and need to pay shareholders.

As reported, the social assessment at your contract manufacturer, A’Hong, has already been started by the TAOS Network. Did you get first results, and when will the audit report be published?

Good question, the first assessment was conducted by TAOS in August. We are processing results and formulating an improvement plan with TAOS, the factory and a special working group, which we expect to share in the coming weeks (two or three).

As a project which puts „social values first“, did you ever think about how to react if TAOS reports bad working conditions not significantly different to what we know of all the manufacturers of Samsung or Apple?

Of course we did. To be frank, some people think we have magically found a factory that is already perfect. That’s a misconception. We found a production factory, who shares our value proposition, is willing to openly look at possibilities for improvement on several levels and be transparent. We want to build a long-term relationship with them and grow business not simply chase the lowest prices. By being part of the system, i.e. by having a purchase order, we can learn from the current systems and look at new ways to address existing systemic problems. The changes that come out of this can only be a process and this process facilitates systemic change.

So you’ll stay with A’Hong whatever will be observed?

I think it is obvious that we won’t stay at A’Hong no matter what the results are. We will stay when we feel we can work on improvements together, by still doing our own thing. As we base our model on a commitment to transparency, we try to strive for the same in return. As I mentioned before our decision on working with them has been based on sharing the same ideas and values. The time we spend with the factory is a way and sort of investment to create a long-term relationship. It is in our interest to grow business with them and not just chase lowest prices or place extreme pressure on the supplier by suddenly raising amount of production. As a social enterprise, positive impact is more important than margins.

Why do you think a workers welfare fund is necessary? Do the workers not earn enough money, or how will the money be spent?

On several points in our production we first try to assess where change is needed, instead of assuming it is for example wage, child labor or working conditions. For example, when we went to the mines in Congo we asked the miners what they think would help them towards fairer conditions. They didn’t tell us to take their kids away from the mines but as a first step to give them tools (i.e. a spectrometer) that will give them a better bargaining position, which in turn gives them a fairer price for the ore they mine. We are trying to find out what fair means in the supply chain and we want to create a discussion.

Creating a workers welfare fund is a first step to worker representation. This is about creating a long term-relationship, and not as tangible as in Congo. It takes months to set up a structure to work on these issues. Again, setting up the program with the fund is only a way to make sure that there is capacity to make improvements.

Sounds reasonable. Sure there will be more to do than could be financed using the fund. I understand that the fund not only covers the manufacturing in China. Is there any guidance or criteria list you will follow in choosing the next step for improvement?

The worker welfare fund is specifically focussed on China now. We are setting up working groups around each action area, from sourcing to production, design, business and recycling. More information on this setup will be published soon on the blog. These working groups consist of multiple stakeholders, partners, and other people from the industry combined with researchers. Within each of our action areas, FairPhone has formulated their ambitions and set out the first steps on our road map to achieve these. These groups are advising us on our next steps.

As a consumer, I support the idea of being fair to those who actually assembled my gadget. I would like to pay directly to the fund. Could you please give me the details to the bank account?

Dear Sebastian, that is very noble, but not the way we work now. As we are not a charity, or an NGO, we can not accept gifts. We are a social enterprise, which means that we are using commercial strategies to create social impact. We want to experiment and pioneer new practices in the supply chain of electronics to inspire the industry to change. Next year we might have different ways to contribute, but for now, please spread the word and knowledge you gain and talk about what’s behind the beautiful interface of your gadgets!

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