Fair Materials and Working Conditions in FP 3

[Elli]

Hi there FP community,
I am currently doing some research on the supply chains of FP minerals.
On the FP website I have found a lot of material concentrating on the supply chain of FP gold.
In the launching press conferene of FP 3 Laura has mentioned, that FP wants to improve the supply chain of 8 minerals that they have chosen in cooperation with the TFI.
Has someone more information on the other 7 supply chains and about which minerals we are talking?
I know Wolfram is included and Copper, but what more?
Thanks a lot for your help!
Elena

[paulakreuzer]

According to the Impact report Fairphone already worked on 7 materials with the FP2 in 2017:

• Cobalt (*)
• Copper (30% recycled -> >50% in the FP3 according to Laura at the Launch event (28:10))
• Gold (fair trade)
• Plastic (50% recycled)
• Tantalum (conflict free)
• Tin (conflict free)
• Tungsten (conflict free)

(*) Cobalt is not officially considered a conflict mineral, but Fairphone has identified similar challenges along the supply chain as with Gold, Tantalum, Tin & Tungsten and is working on improvements.

According to this blog post (also from 2017) they are concentrating on 10 materials where they want to improve things, which also include:

• Galium
• Indium
• Nickel
• Rare earths

[Elli]

Thanks for your help!

[Elli]

Hi again,

Acutually I came across another question concerning the working conditions in the FP 3.
I did not study economics, so it might be lack of knowledge that stands in my way to understand a paragraph about the living wage for workers at the FP partner Arima in China.
On the FP website (https://www.fairphone.com/en/2019/08/27/progress-with-arima/) it says:

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.

What does that mean exactly? Does the whole factory get 1,50 Euro more per sold FP? That doesn’t seem like a lot. Or is it a single worker, that assembles the FP alone, to earn the bonus for herself (does also not seem to be very likely)?

Someone out there, who understands what is meant by this paragraph? And also I couldn`t find any information about actual working hours of the workers at Arima? Do you have information there?

Thanks a lot in advance!

Elena

[paulakreuzer]

@Elli

Does the whole factory get 1,50 Euro more per sold FP?

Yes, I assume so.

It doesn’t seem like a lot, that is true, but if you multiply that by the number of phones produced, divide it by the time it takes to assemble that many phones and by the number of factory workers involved in the process I guess you’ll get the difference between the minimal wage and the living wage for one worker.

I don’t know any of the other numbers in that formula, so I can’t verify that claim.

@Elli

And also I couldn`t find any information about actual working hours of the workers at Arima? Do you have information there?

I don’t know anything about the actual working hours either. What I heard is that many workers “voluntarily” work a lot of over time. I’m pretty sure that by FP’s calculations workers would get living wages without working overtime (I have no source for that claim nor do I know what the regular working hours are) and that is (one of?) Fairphone’s tactic to combat excessive overtime work. See Laura’s remarks at the 35:00 mark

PS: Oh, okay here is why it seems and actually is quite low:

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.

So Fairphone’s commitment alone is not enough to achieve living wages.

[Ingo]

Hi Ellie,

I think one answer is in the paragraph following the one you quoted:

Following the advice of the employees, the bonus will be shared with all employees, not just those who work on Fairphone products.

And indeed, 1.50€ per phone doesn’t sound much. But have a look at the cost breakdown of the FP2: Cost breakdown of the Fairphone 2 - Fairphone

It says 37.20€ Manufacturing & Assembly, 9.80€ of which are for Labor. The way I understand it, you need to compare the 1.50€ with the 9.80€ which is a bonus of 15%.

Numbers for the FP3 are surely a little different but I guess one gets the general idea.

[BertG]

@Ingo

The way I understand it, you need to compare the 1.50€ with the 9.80€ which is a bonus of 15%.

In my understanding, the 9.80 € does include the 1.50 €, which makes the surplus even higher, i.e. 18% of 8.30 €.

@paulakreuzer

So Fairphone’s commitment alone is not enough to achieve living wages.

That had to be expected.
The Fairphone extra would mean a living wage for those workers that are actually working on the Fairphone.
As Arima is not exactly a small business, Fairphone can not be expected to guarantee living wages for all workers by the production of just a few thousand phones.
I really love that the extra from the Fairphone production is shared between all workers, which was decided by the workers themselves, as it reduces potential envy between them.

Edit:
To the working hours.
Arima themselves give a 9h working day (including pause, I guess) on their homepage → Careers/Benefits

Employee Benefits

1. Flexible working hours 08:30~17:30 or 09:00~18:00

[Ingo]

@BertG

In my understanding, the 9.80 € does include the 1.50 €, which makes the surplus even higher, i.e. 18% of 8.30 €.

Yeah, could be. Of course the 1.50€ is the number for Arima manufacturing the FP3 (I guess) and the 9.80€ is the four year old number for the FP2 and a different manufacturer IIRC.

But yes, in the cost breakdown I would expect the bonus would already be included, you are right.

[BertG]

True, that’s old data. Let’s hope, that the labor costs are a bit higher now, i.e. that the workers got a pay-rise.

[paulakreuzer]

Afaik the 1,50€ bonus is really new with the FP3. Fairphone always said they invest in programs to improve working conditions and that they made a fund which the workers can decide over democratically (and at least once they decided to just pay it out evenly to all workers), but “living wage” is actually quite new in the FP vocabulary - at least when talking in present tense.

August 2013:

Fairphone, I know from my conversations with its team, shares the same heightened commitment and passion for promoting a living wage and humane conditions in its supplier factories globally.

April 2015:

To better understand what the current wage means for workers, the next step could be to research living expenses for the area. This would give a reference point for living wages in the region where Fairphones are made in comparison to other manufacturing facilities.

October 2015:

At the same time, GSN plans to design a progressive remuneration system (salary and non-financial benefits) that can support workers in achieving a living wage standard in the future.