Amazon: sweat shop Britain?

Thanks Dennis, I think it is great to spread the word about bad practises like this!!

Dennis - I hate to say it but the fact that you're surprised completely floored me. This Amazon story is a natural result of relentless downwards pressure on price. The move of (almost) all production to the east, and the rise of the super-consumer society has created a demand for low cost/high efficiency operations like Amazon - and how do they remain efficient and drive prices down? By sourcing goods from the lowest cost manufacturing countries and treating staff like disposable commodities.

Don't people see that this is our fault? Amazon are just fulfilling a demand...

And that from someone who still proudly owns a business manufacturing 100% in the West (in this case www.cactusclimbing.co.nz and production entirely in New Zealand - well paid staff, clean /light/airy workplaces and a fun environment all included)

@ben: The prices Amazon chooses to offer should have no bearing on whether they operate like slave camp owners. That's a well understood business principle. People don't realize this kind of thing is going on. That matters.

Dennis - (and I'm going to call a spade a shovel - I was taught by the best) BOLLOCKS. They are able to offer low prices becuase they slash expenditure on unnecessary items such as.... sick leave, employee health and safety and the like.

Price and cost structure are inextricably linked

@ben: that response does you no credit. Arguing that "This Amazon story is a natural result of relentless downwards pressure on price" is not something that consumers are imposing. Amazon chooses to set its prices where it wishes. To say otherwise assumes that management has no choice. That is untrue. We all have choices. And no: price and cost do not have to be inextricably linked. They may be but it's not an imperative. Ask Verasage about that one.

Amazon has always said the main reason it is competitive is because of its technology use. No-one I know and especially the extremely bright people who brought the story to my attention, had any clue this is how Amazon is behaving in the UK.

...and to say that sick leave etc are un-necessary expenditures is unconscionable. When I was in the UK, workers had legal rights designed to protect them against such arcane practices. If those rights have been lost then that is diabolical in itself.

I believe in ethical practices as I assume do you. At least have the good grace to recognize that whatever Amazon is exploiting is far from ethical and exploitative at best.

Dennis - you misunderstood me - my comment re unnecessary expenditure was very much tongue in cheek. Remember you're talking to someone who owns a business that still manufactures in the west for ethical reasons. We pay our staff hndreds of times what we could pay were we to manufacture in China - and we pay sick leave and holiday (and have regular breakfast outings and other social events.

Absolutely I agree that Amazon's actions are unethical - but they're the unethical result of consumer demands - and we have a culpability in this.

Sure Amazon sets its own prices, but it does so with the aim of growing revenues so it needs to be responsive to consumer demands - simple economics I would have thought

Strawman argument you have going there. If consumers knew the results of their choice, they might not shop there.

Knowing how Walmart treats its employees (or has been convicted for treating them in the past... hello Black Thursday fatal stampede! :( ), I avoid shopping there, even if it were to save me a few dollars.

DH is right in that you need to shed light on a practice like this.

Besides, the employees they're writing about aren't in China, they're IN THE UK, so boo-urns on picking on China when it's the domestic (albeit immigrant) workforce which is apparently being horribly exploited. :(

But Krupo this stuff (and a hell of a lot orse) has been going on in China for years as a direct result of the West's demands for cheap good. How come the sudden fuss when it happens in our own back yard?

People have been shedding light on these issues fr years to little or no effect....

@ben: All the major US brand retailers have supplier agreements in place that demand they meet certain employment standards consistent with decent treatment or they get penalized. Check Nieman Marcus, Macy's etc. Those activities are regularly audited and acted upon.

As I said, this isn't happening in the Philippines or some African state but in the UK, but it doesn't matter where it happens. Behave unethically, you get called out as far as I am concerned. the only difference is that it makes it all the more shocking that the UK should appear to be returning to Dickensian times.

Who said it hasn't already arisen as an issue?

You mean you've never gone into a store, picked up Trinket A, looked underneath, seen the "Made in China", and put it down in search of something else?

Though it's depressing when you find Trinket B (same item, different manufacturer) with "MADE IN USA" proudly stamped everywhere, and the quality is equally rubbish. :(

Seriously - this describes my weekend shopping adventure.

Didn't buy anything despite attractive prices because the quality sucked almost equally (ironically the "Trinket B" was even cheaper too). Though perhaps it had something to do with the store's shoddy presentation, I have to admit - if you want me to buy it new, it better not look like I'm taking it out of a flea market. :p

Krupo - luckily there are some of us (cue self-interested pitch for cactusclimbing) who still believe quality, longevity and ethical manufacture are worthwhile investing in.

Dennis - agreed it's a shock to see a return to Dickensian occurrences in London but if you believe the hype surrounding "ethical eastern manufacture" you're being hoodwinked.

http://www.bullfrogfilms.com/catalog/china.html
http://www.bullfrogfilms.com/catalog/store.html

The auditors of these factories are notorious for being dodgy.

Anyway - all that aside my central premise is that poor conditions are a direct result of consumers pressure on pricing. While individual cases might come as a surprise (Amazon, Nike a few years ago, melamine tainted baby formula etc) the concept of Western demands having negative social, economic and environmental impacts at home and abroad is one which shouldn't be a surprise to consumers.

@ben (sigh) - unlike a lot of people on the interwebs, I do original research. That's why I can speak with authority on the issue of what happens re: the places I've named. So please don't tell me that audits in at least some of these places is a crock. Please also check in with Nike. They have taken this issue seriously and pounce on those that miss their standards.

There is no problem with your premise about consumerism but you presume that everyone 'knows' what's going on and is therefore culpable. You assign way too much knowledge to most people. As I said earlier, the people who brought this to my attention are smart folk who were not aware, any more than I was. Read what I said in my post again - it's all there.

And finally, we're not talking about goods necessarily made in China but goods that could have been made anywhere. We're talking about a distro warehouse in the UK. That's a different market segment.

And more over here - http://diversity.net.nz/what-part-of-rampant-co...

Dennis - I've sourced products from a number of Asian countries and run a factory in the West. I've also done some exercises around cutting cost out of a product in order to meet a markets price point. All that research has led to one place.

Re my comments on culpability - agreed that we live in an imperfect marketplace where knowledge is not perfect. And yes I assign too much knowledge to people - I'm a proponent of caveat emptor - but granted this might be a little unrealistic.

Re market segments - sure there is a difference between that and manufacturing. But in order for Amazon to meet price/efficiency requirements they need to trim costs compared to another distro warehouse setup in the UK. Part of that can be achieved through technology and scale but thereafter is comes down to cost cutting...

Anyway - we've done this one to death - let's agree to disagree?

NEVER!!!!


.
.

The blog software lost my smiley that was supposed to follow that... hopefully your dry British wit would pick up on that though....

@krupo - get a gravatar so we can see how gorgeous you are. :)

My sense of wit is New Zealand with a dash of Eastern European to boot

But either way the humour was seen krupo

I'm a tiny bit irritated Ben, when anyone is self-righteous around his or her own fair and equitable business practices, as I would think that it should be normative/good practice to hold oneself to a higher ethical standard in business than compliance dictates. This beyond compliance approach I have learned, is referred to as having adopted aspirational codes of ethics.
Creating a safe environment or "safe habor" for such aspirational codes should be an objective that govenments attempt to meet. And businesses who want to be competitive in our times would do well to create them for themselves.
I believe each one of us has a moral obligation to hold his or her government and in turn govenments should hold corporations not only to a compliance standard but to an aspirational code. Although I initially thought about this in the context of a personal opinion (and as a former member of a collective, where such aspirations were the norm), I discovered very interesting discussions around the topic and found that there are existing organizations that audit businesses that have adopted aspirational codes of ethics. "Social Accountability International(.SAI.) and the International Organization for Standardization (.ISO.) are two such organizations. Details are in the document: http://www.cauxroundtable.org/PDF/Professor%20B... . Page 41 particularly addresses "forced labor" .

I applaud Dennis' independent research and his insistence on surfacing these inconvenient truths even when these are at times "close to home".
Yes, it is more shocking to hear that your company or your country has transgressed and in that sense, sphere of influence and demographics do matter.
I, for example, might have more ability to voice my concern to the govenment of the country where I am a citizen or to the judicial bodies that are most accessible to me than in some removed geographic location.

If more folks were to act as responsibly as Dennis, himself an auditor, and to be raising the clarion call more often, we would have more powerful public opinion with which to lobby and to press for the important tool of aspirational codes.

We should be shocked and we should turn that shock into lobby action.

I have been following this discussion w great interest. I agree unbridled or uncontrollled market forces will take us to this but I disagree that it is inevtiable.

And this is where I believe @ben has become ensnared in his own circular logic.
On the one hand Ben is proud of his own non exploitative, ethical busines model and on the other hand he is writing off the Amazon situation as inevitable outcome of market determinism. Well which is it? Are we a market determined society or not? And Ben I don't think narrowly segmenting and differentiating your business model as 'ethical' relative to others benefits many or much beyond your own bottom line. This is why I think narrow segmentation on the lines of old school Body Shop or Ben & Jerry's is not sustainable in the long run although its a great business model and there is a great irony in this -- these models are successful only because everyone else's are not and thats not good enough. We need to scale up decent and sustainable working practices and hold them universal as a baseline for all businesses everywhere.

I for one believe in the market but I'm not a fundamentalist about it and my zeal for markets end where vulnerable people are exploited. We should not submit to it as an inevitable outcome in the UK or anywhere else for that matter.

@Marilyn

1) I don't consider that I'm being self righteous. We do what we do because we want to. My incredulity is around the naivety of people to what market forces can do
2) With the utmost respect to Dennis - this article does not come from his "independent research" it comes from a newspaper link
3) Rather than people act responsibly and voice these concerns, perhaps people could act responsibly in their consumption. Talk, as they say, is cheap

@James

1) Appreciate your comments re circular arguments - what I'm saying is that we're a very small, semi-marginal company. In order to grow beyond a certain size we'd have to move to sweat shop production. We've decided that we don't want to. So the argument is only marginally circular (more oval perhaps?)
2) We're not narrowly differentiating ourselves based on our ethics per se. Rather we do what we do because we think it's right. It's a personal decision we've made and we don't really push it in our marketing (not too much anyway). I only use the example here because it's a business I know inside out

@Ben thanks for your reply but I'm curious -- your firm belief is that your enterprise cannot grow to scale and maintain ethical standards? Is that true just for your market or do you believe all large enterprises are ethically compromised? On your second point -- good for you but your first point still confirms my concern with your thinking -- if you have decided you can mainatin standards in your corner of the market why is that not possible for others and at scale? Why is that not possible? I believe it is.

On your third point to Marilyn - I agree in personal responsibility to a point but lets face it people are the same the world over and encompass light and shade. It isn't enough to place all the responsibility at the door of the consumer because as Dennis has said they just may not have the information. Second they may not be able to afford the ethical premium if this has to be paid for at a premium but why is this the agonising choice for the consumer? And this is where I get on my high horse -- why should I as a consumer pay extra for the privilege of knowing that workers were not exploited along the way and have that sold to me as some kind of cache, green premium. We no longer accept that we can be sold dangerous goods at a lower price such as lead laced toys or cars that blow up in a collision (Ford Pinto). We have internalised many moral standards already into the market -- there is room for more across the board internalisation and not just segmentation. i do grant you that brand leadershoip in this area can lead to normalising of the standards for all but that must happen.

Yes individual consumers and citizens should take more responsibility but governance and institutions matter a lot in how society is guided so that we reach our highest not lowest common standard and purpose. Here I mean regulation and concrete voluntary action of the corporation to transparently set, maintain and demonstrate universal standards of decency & self policing in their operations.

@James

I don't want to get into an argument with the Enteprise CSR gang but suffice it to say that in my market there are many players who are strongly branding themselves as ethical - sometimes that's little more than marketing spin....

@ben

OK - thanks, I enjoyed the conversation. But to be clear I don't represent myself here as part of the 'enterprise CSR' gang whatever you imagine that to be. Actually -- the fact that you think that is the position is still more circular logic. Remember the original blog post was critical of the alleged behaviour of a fairly large enterprise. If I was trying to pigeon hole myself as 'enterprise CSR' then I might like you look for 100 reasons why what was alleged to have happened was somehow OK. On the contrary.

All I'm asking and arguing for is that the very standards you uphold in your own business - clearly exemplery - and I mean that sincerely, might be upheld by all businesses every where. Its an entirely reasonable propositon and I will always insist that citizens & consumers (as opposed to enterprise csr gangers ;-) ) are entitled to expect it as baseline behaviour.

@ben rereading above .. i misspoke, I don't think you think the poor standards are 'ok' as I wrote. far from it, clearly. The difference between you and I is that believe it is inevitable and market determined and I do not.

Thanks James - and happy we've amicably agreed to disagree - oh and I wasn't referring to you as part of the enterprise CSR brigade at all

I've appreciated the dialogue - cheers (oh and if you're ever in need of some cactus gear flick me a line and I'll do you a 20% discount - just 'cos I can...)

:-)