Consumer awareness survey

Do labour conditions in developing countries affect our purchasing decisions?
 
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  • Updated:3 Jul 2008
 

01 .Introduction

Woman shoping

In brief

  • Consumers are most concerned about the performance, quality and price of products.
  • Almost half of those surveyed think the working conditions and human rights of the people who make the products are important.

What makes you choose one product over another? We wanted to know what makes consumers tick — and also if the environmental and human impacts of a product’s manufacture are a factor when we part with our dollars. So, in conjunction with Amnesty International, we asked 1000 Australians to reveal their buying attitudes.

Not surprisingly, consumers are most concerned about aspects of a product that directly affect them — and that’s performance, quality and price.

The environmental aspects of a product’s performance — specifically energy and water usage — also rated quite highly in this survey, no doubt in part because the more water or energy a product uses, the more expensive it is to run.

Our survey shows nearly half of consumers are also thinking about the working conditions of the product makers when they spend. However, most, though by no means all, consumers want a product to meet certain performance and quality criteria for a reasonable price — only if that’s ticked off will they look at the more ethical option.

Please note: this information was current as of July 2008 but is still a useful guide to today's market.


How we surveyed

In February, 1000 people across Australia were surveyed to find out how important various product characteristics, including aspects of their manufacture, are in the minds of consumers when buying them. We asked them to rate the importance of each aspect to them, and then to choose the top three most important attributes for each type of product.

The products we asked about were: household appliances (such as a washing machine or dishwasher),hi-tech products (such as a computer, digital camera or MP3 player), clothes and products for a baby or young child (such as a stroller, cot, toys).

A big thanks goes to market research consultancy Jones Donald Strategy Partners for their pro bono help with the survey.

CHOICE verdict

Our research shows that many consumers — for some product categories a majority — say they’re concerned about the human and environmental impact of their purchases. But there are several barriers to consumer purchasing leading to significant change: Ethical products aren’t always widely available, even at a price. Because of lax labelling practices, consumers can’t always tell an ethical product from an imposter (see Supermarket Green Watch), and they’re not always sure that a supposedly ethical choice will make a genuine difference.

Consumers want ethical products that work just as well as alternatives. For this we need manufacturer commitment and sometimes government intervention to build up the critical volumes required for production at an acceptable price. Many consumers would prefer government action to put the worst-offending products off the market, rather than add to consumers’ responsibilities when all they want to do is get the shopping done.

 
 

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02.Consumer's buying priorities

 

 Key

Scale

Major appliances

Household appliances

Results

The good news for the environment is that when it comes to the impact of large appliances, people are concerned about their water and energy use, and much of their overall environmental impact, in fact, occurs during use — for a washing machine, say, it’s about 75–80% of its total impact.

However, the mining and processing of ores for metals and the manufacturing and transport of large appliances have their environmental costs too. On the upside, many whitegoods are recycled, which not only reduces landfill but provides metals for recycling — and using recycled metal substantially reduces the environmental costs of production.

Hi-tech electronics

Hi-tech

Results

Ease of use shot up closer to price and performance as one of the most important factors in choosing a hi-tech electronics product, such as computers, digital cameras or MP3 players — and most of us will relate to that. Less than half of consumers we surveyed consider the environmental impacts of producing, transporting and disposing of electronics, and very few rated them in their top three purchase criteria.

Given that e-waste is rapidly emerging as a major environmental problem, CHOICE wants to see mandatory product stewardship programs that place the onus on manufacturers and distributors to deal with the issue.

Baby and children’s products

Baby and Children

Results

Half the respondents considered the environmental impact of making toys quite or very important. One serious concern in toy manufacture is the use of nickel cadmium (NiCad) batteries, which until recently were common. While they’re safe to use, they’re being banned for most uses in Europe because the cadmium is highly polluting when it ends up in landfill.

The Toys ’R’ Us chain has committed itself to phasing out rechargeable NiCad batteries in toys made exclusively for the company, partly for this reason, but also because of the deleterious effects cadmium has on the health of Chinese workers making the batteries — it’s linked to kidney failure, lung cancer and bone disease. And it’s not just the workers — cadmium escape has resulted in polluted water and soil, and high levels occur in food in China. Hasbro toy company has also banned these batteries from its toys.

Clothes

Clothes

Results

Working conditions of the people making clothes were considered ‘very’ or ‘quite’ important by almost half the survey respondents, but not surprisingly quality/durability and price were the most important factors when choosing clothes. Along with style/design, they make up the top three criteria (see the graph, above). Over the last decade the sweatshop issue has emerged regarding clothes. FairWear’s ‘No Sweat’ campaign addresses the poor pay rates and long hours worked by outworkers in Australia.

When we asked consumers if they’d boycotted any products for ethical reasons, the single highest response for a named brand was Nike. As a market leader, it was singled out for attention in the mid-’90s by anti-sweatshop activists, although many other sports shoe and clothing companies operated in a similar way. In recent years, campaigners have acknowledged that working conditions in Nike factories have improved, and a review by the UK’s Ethical Consumer organisation took them off the bottom of the list for ethical sportswear.

Almost half the consumers surveyed consider the environmental impact of producing clothing very or quite important. Environmental aspects of clothing production have entered consumer consciousness, with concern about the chemicals and huge amounts of water used to grow cotton. Organic cotton products are becoming more mainstream (Target, among other major retailers, now carries a range), as are alternative natural fibres such as hemp, which can be much less demanding of resources.

Table notes

(A) For example, freedom of expression, right to a fair trial, freedom from cruel and degrading treatment etc.
(B) For example, worker safety, wages paid, hours worked, etc.

Does this mean most people don’t care?

No. Witness the expansion into supermarkets of Fairtrade products, with total sales increasing from half a million dollars in 2003/04 to over $10m in 2006/07. The Fairtrade label is highly regulated and monitored, and the logo assures consumers they’re helping people in developing countries. There’s also growing interest in so-called ethical investments, and assets invested in such portfolios have grown from $325m in 2000 to over $17 billion in 2007.

But for other products it’s not so straightforward to buy ethically. While our survey shows people are concerned about poor working conditions, particularly in some Asian countries, many consumers just don’t know where to turn for reliable, trustworthy information. Also, a company’s ethical status can change quickly, so you need up-to-date information.

You also need to do your homework before you hit the shops, because there are no ‘star rating’ stickers for a product’s ethics, and there are so many logo schemes and green and ethical claims it’s difficult to know who to trust (for more on this, see Supermarket Green Watch). Consumers are also sceptical of companies that say they’re ‘doing the right thing’ — are they really addressing environmental and human rights issues or is it PR spin?

Best intentions can come to nothing

Supply chains are complex. Many companies contract their manufacturing to independent factories (called suppliers) that control labour conditions and know local environment laws. The original company may have a ‘code of conduct’, but often the supplier doesn’t adhere to it. As suppliers gain more power, a growing number can pick and choose the companies they’ll make products for: if they’re not willing to meet working conditions standards required by one company, there’ll be another, less ‘ethical’ company they can supply.

Suppliers outsource work and supply chains are extending further and further from the control — and watchful eye — of the company whose brand is on the product. So if consumers are sceptical of company spin, even companies themselves can be in the dark (but some may prefer it that way). On the other hand, some companies are developing schemes that require suppliers to certify the ethical or environmental qualities of each delivery they supply. Whether all these schemes are robust is currently difficult for consumers to determine. Another force undermining good intentions is that governments of poorer countries often view their cheap labour force and resources as a competitive advantage to attract investment and stimulate economic growth.

That doesn’t mean companies aren’t trying, even if their attempts are ultimately thwarted. One company reportedly worked hard to ensure its suppliers allowed democratic trade union elections so workers could influence wages and working conditions. While it had some success in some countries, in China it amounted to little as the official government unions wouldn’t allow what was perceived to be foreign interference.

What can you as a consumer do?

You can buy according to your conscience in one of two ways: you can buy products made by companies doing the right thing, or avoid those that don’t. If you believe coffee growers should have decent wages and working conditions you can buy Fairtrade coffee. Or if you want to be sure child labour wasn’t used to make footballs, buy fair trade footballs. If you’re concerned about pesticide poisoning of cotton growers, buy organic cotton. Lack of reliable information is the biggest stumbling block for consumers who want to buy ethically — we’ve suggested some resources in Buying ethically.

Then there’s product avoidance or boycotting. About 30% of consumers in our survey indicated that they had at some point avoided buying certain products for ethical reasons, mostly concerns about human rights or working conditions. Many claimed to boycott products specifically from China for these reasons, which ties in with perceptions of China rating poorly in our survey for human rights (75%) and working conditions (76%).

There have been many consumer boycotts over the years, some as part of broader campaigns. Not all boycotts gain wide support and even those that do don’t always achieve their aims — Nestlé is still selling infant formula in developing countries despite 30 years of protest and boycotts. But there have been wins for activists: a boycott of Shell in Europe against its proposal to sink the Brent Spar oil rig in the North Sea resulted in massive reductions in sales, particularly in Germany, and a rapid change in company policy.

It’s hard for consumers to easily get good information about particular brands and companies, and the information available will also depend on what matters to you. CHOICE regularly researches issues of ethical consumption, particularly in relation to environmental impact (for example, choosing green power products , and how to make your home carbon-neutral.

General advice includes:

  • Buy secondhand goods.
  • Buy fewer goods.
  • Replace goods only when necessary — repair when possible and don’t upgrade on a whim.

Ethical purchasing

Fairtrade Australia has information about Fairtrade products (mainly coffee and chocolate) and links to suppliers.

The UK’s Ethical Consumer magazine has information on a wide range of products.

Etiko sells fair trade footballs and sports wear.

FairWear has a list of clothing manufacturers and retailers on its website who’ve agreed to produce clothing ethically.

Oxfam offers shop-based and online shopping for fair trade products, including food, toys, clothing, cards and homewares.

Laws aren't enough

International Consumer Research and Testing (ICRT), of which CHOICE is a member, conducted research into working conditions in Asian factories where mobile phones and laptop computers were made. One finding was that ultimately it was the country where products were made, rather than the brand, that determined the working conditions.

Factories in China were worse for working conditions than similar factories in Thailand and the Philippines. The research found workers in China doing 12 hours a day or longer (sometimes more than 400 hours a month), a lot of unpaid overtime, and people working in dangerous conditions without protective equipment or adequate training. In one such factory, they interviewed a man who’d lost his hand in an industrial accident, and was forced to pay his own medical expenses. In some cases women were dismissed for becoming pregnant.

These and many other negative findings were in contravention of Chinese labour laws, which are in some ways not bad. For example, the legal maximum for working hours per month is about 200 hours, women are entitled to 90 days’ paid maternity leave and companies are required to provide ‘social insurance’, which covers accidents, medical insurance and a pension. The problem lies in poor auditing of workplaces and enforcement of labour laws.

Such working conditions have been well-documented by human and labour rights NGOs (and not just in electronics factories — see our article on toys) over the last decade or so, and the general perception of a clear majority of consumers in our survey was that working conditions in China (76%), India (75%), Vietnam (71%) and Thailand (71%) are poor. Almost half of the people surveyed thought the working conditions of the people who make electronic goods are ‘quite’ or ‘very’ important when choosing a hi-tech product, and 4% considered working conditions in their top three criteria.