Maersk's Response to Danish News

Maersk's Response to Danish News

In response to Globalization Monitor's January report and the related Danish news report on the deplorable working conditions at the Dongguan Maersk plant, Maersk released a statement on 12th January, refuting nearly all of the charges. Maersk's statement is as follows:

Editor's note: The original press release is in Danish. The closest document in English was the one posted on Maersk's intraweb for their employees. Most of the same information from the press release is in the box.

MCI factory in Dongguan in the Danish news 12 January 2009 Sunday 11 January, 2009, the working conditions and employee rights on Maersk Container Industri’s (MCI) factory in Dongguan was criticised in the Danish national newspaper, Politiken, and on the weekly news programme in Danish national TV. The criticism was based on interviews with anonymous employees and included statements from the organisation, Globalization Monitor. We do not believe that the items showed the conditions at the factory correctly nor the initiatives taken by management to ensure a well-functioning workplace with good working conditions for the employees. We are proud of our container factories in China, including the factory in Dongguan which we put into operation at the end of 2006. We acknowledge the power of leading by example, and today our factory in Dongguan sets a high standard in China.

mployment conditions exceed by far the conditions in similar factories and in several areas the requirements of Chinese legislation. Our employees must always be able to communicate freely with management on working conditions without fear of reprisals, threats or harassment. They can freely express dissatisfaction or make suggestions through the union or management. If they wish to complain anonymously, they can use one of the many suggestion boxes situated around the factory area. In all that we do, we aim to demonstrate responsible corporate practice. It is our clear target that the factory in Dongguan must continue to be a work place which sets high standards, not least within the area of working conditions and environment. It is therefore only natural that we continue to work jointly with the employees of the company, including the union, to constantly ensure that problems are solved quickly and efficiently. Therefore, we are frustrated that the news items yesterday misrepresent the actual conditions at the factory. This is regrettable, not least in light of the large effort that all our employees – at Dongguan and elsewhere – make to continue to ensure and develop good and safe work places that we can be proud of and happy to work in.

Strengthening our CSR effort

A year ago, we initiated a process of creating a more structured approach to CSR work, most recently by creating a CSR department. The objective of the department is to set specific targets for our CSR efforts which will be followed up every year. Our efforts on CSR will be documented and data collated annually in a sustainability report. Increased openness will also mean that the Group to a higher extent will enter into dialogue with e.g. human rights organisations. With this process of creating more structure in the area of CRS work, we are working towards joining a particular set of principles for CSR work. Global Compact is being considered, but other frameworks are also possible.

For further information, please contact: Group Relations, Communication

Maersk Container Industri has rejected the criticism on most points. Further to this, A.P. Moller - Maersk will make sure to look into the matters in depth through an independent investigation to establish whether there is basis for changing specific conditions. If such an investigation identifies flaws and deficiencies in relation to Chinese legislation or UN worker’s conventions, these will of course be rectified immediately. Furthermore, we will enter into dialogue with Globalization Monitor and listen to their concerns regarding the factory. Again, should the accusations be truthful, we will rectify the problems immediately. The following working conditions are being criticised and will be covered by the investigation: Corruption:

The employees complain about demands for money gifts to middle management, and that managers buy their positions resulting in many not being qualified. MCI’s reply: We have zero tolerance to bribery and corruption. To the knowledge of Maersk Container Industri’s management, this is not taking place and procedures are in place to prevent it. This means that individual middle managers cannot independently carry out promotions or dismissals, these always take place in cooperation with the HR department of the company.

Rules: This concerns rules which offend employees. The rules were put in place last summer following a number of strikes. Violation of the rules leads to dismissal. There is a question of an arbitrary penalty system which has now been discontinued.

MCI’s reply: We have an employee handbook which is updated and distributed on an ongoing basis. All changes are subject to union approval. In the spring of 2008, we removed the penalty system which is standard in Chinese production companies. Violation of the majority of rules as mentioned in the employee handbook will at most result in a reprimand. Only in cases of repeated and severe violations will dismissal be an option. If such a case arises, the union must be involved and the labour authority office of the local city council must be consulted. We have zero tolerance to physical violence, bribery, corruption and other illegal acts, and violation is grounds for dismissal.

The rules are more severe than in similar Chinese companies, they contravene Chinese legislation and UN conventions. The company’s ban on strikes is not in accordance with Chinese legislation.

MCI’s reply: At A.P. Moller - Maersk all employees have – as a starting point – the right to strike. However, we generally encourage management to ensure proper dialogue with the employees and to make sure that negotiated solutions can be found to the problems that may arise. Management at the Dongguan factory is currently working with the A.P. Moller - Maersk Group’s CSR (Corporate Social Responsibility) office in Copenhagen to clarify our policy. This is being done, not least to create clarity on the rights and duties of the employees in relation to Chinese legislation, but also regarding our values. In China, workers have the right to stop working and/or ‘go slow’ to protest against workplace issues, preferably with the support of the Trade Union (under Trade Union legislation). The law encourages workers to negotiate through the union beforehand. It is however a violation of Chinese legislation if it is a question of a mass meeting or a meeting which causes social unrest that has not been approved by the local Chinese authorities.

It is prohibited to conceal sexually transmitted diseases

MCI’s reply If the criticism is justified, the passage will be removed. The deciding factor is contagious diseases such as tuberculosis and hepatitis. Chinese legislation requires people to make it known whether they suffer from a contagious disease. When staff is employed and when they leave an independent health check takes place at an external, local hospital. In connection with the terms of employment, we offer our employees an annual health check at our medical clinic and free, around-the-clock treatment for minor injuries and vaccinations etc.

It is prohibited to make a mess in the canteen MCI’s reply: Many employees are former rural workers not used to working in a factory where many people eat together in a canteen. One of the episodes that resulted in a strike was in fact caused by a lack of proper queue behaviour. It is prohibited to give information about your own salary MCI’s reply: It is only prohibited to give information about the salary of others. We have no problem with the employees giving information about their own salaries, and the current edition of the employee handbook does not state this. We have zero tolerance to physical violence, bribery, corruption and other illegal acts, and violation is grounds for dismissal.

Management: The bosses take revenge and give punishment or dismisses if the employees criticise the conditions

MCI’s reply: We have zero tolerance to physical violence, harassment and threats. Our employees must always be able to communicate freely with management on working conditions without fear of reprisals, threats or harassment. They can freely express dissatisfaction or make suggestions through the union or management. If they wish to complain anonymously, they can use one of the many suggestion boxes situated around the factory area, and they can contact they local city council’s labour office. The union of the factory was formed in July 2008. In accordance with Chinese legislation, the management had no influence on the process, the proposed candidates or the election of representatives. Each week the management of the union and the managing director meet. At these meetings the general situation of the business is discussed along with employee working conditions and satisfaction. The dialogue is very open and of great benefit to the employees and the management.

Working environment: Claims of hazardous working environment, that employees are sent home injured on a daily basis, every day in December has seen 4-5 injuries.

MCI’s reply: We monitor and treat all work related injuries, and the rate of injuries is – compared with Danish conditions – very low. Last year, the whole factory had only 34 injuries which subsequently led to one or more day’s sick leave, equivalent to a rate of injuries of 5.41. The employees get hearing damage and lung problems caused by high noise levels and large amounts of dust, lack of ear plugs and other safety equipment MCI’s reply: To date, no cases of permanent hearing damage, occurring at the factory, have been verified. All new employees go through a two day course which covers environment, safety at work, fire fighting, employee handbook, use of the canteen, organisation, workflow processes and our values and more. Our safety equipment includes shoes, helmet, ear defenders, masks, safety goggles, gloves, welding screens and work clothes. Our employees can at any time and with no limits replace worn or damaged safety equipment. Both management and unions organise ongoing courses in using safety equipment. Among others, we train our employees in the correct use of ear defenders. There is not enough extraction/ventilation MCI’s reply: We have undertaken extensive investments in ventilation/extraction systems, an internal water treatment system and circulation, and cleaning of chemicals. According to legislation, the factory is subject to official opinion polls. These show that the factory complies with environmental standards which to a large extent are compatible with equivalent European ones. Where e.g. air ventilation and extraction is not technically possible, our employees are protected in different ways, e.g. by using masks. Our safety standards in this respect are on a par with Danish standards.