Ethical Sourcing & MEC

China's 3.1 Upgrade - Coming Soon

The next industrial leap for China is not making more cheap clothes, cell phones, cars and just about every other knick knack.  It's IT architectecture, selling financial products and developing life saving drugs.  It's moving up the value chain currently dominated by Western economies.  This climb won't happen today but bet on it happening in our life time.

People are People

I would say about three quarters of our factories are operated by Asians be they located in Canada or Asia.  This is interesting trivia.  Not because ethnicity has something to do with a factory’s compliance or the quality of its product.  But in spite of the different cultures of where our contract facilities are located, factory managers throughout our supply chain are really not that different.  They: work long hours leaving limited time for families; endeavor to find a market niche that allows their products to compete globally; pay mortgages and send their kids off to university.  And when they have finally paid off their debts and seen their children graduate from college they begin the final stage of their long manufacturing careers (passing the business to their children as commonly done in Asia or shuttering it, which is occurring more often in Canada). 

Driving Compliance - Learning from Toyota

Successful supply chains are closely integrated and synchronized according to Harvard Business Review (HBR).  A buyer and its supplier establish common objectives like quality levels, purchase volumes or even profitability targets.  When targets are missed both parties work in concert to veer back on course.  This according to HBR is what allows this Japanese car company to tower over its competitors.

Brand Collaboration

A hard challenge we face is encouraging a factory to make substantive improvements that can involve changing manufacturing practices.  Factories assert understandably, complying with such requests, is both costly and counter productive.  Especially during an economic downturn when everyone is negotiating better prices and when none of their other customers are demanding better working conditions.  Achieving better working conditions requires not only a willing factory owner but participation by other brands. 

Ups & Downs - Our Contract Factories

There are many perceptions of our contract factories.  Two of them being "sweat shop" or "Shangrila".  Neither are accurate.  There are non compliance issues in all of our 85 or so contract factories spread across 16 countries.  These challenges range from remuneration violations (e..g, improper pay, excessive overtime) to unsafe working conditions (e.g., mechanical hazards, harmful chemicals).  The root of these issues are multifaceted.  They're discussed at length here (mec.ca/sourcing).  

Update: Bike Industry - Green & Hype

Hi Everyone,

I've temporarily removed this post because there are bigger issues behind a handful of comments I've received and what I'd blogged on in this orginal post. The issues are highly contentious and are tangential to MEC opening bike stores and service centres.

On a very pragmatic basis, when I started this blog two years ago, my goal was to push transparency within MEC and a broader dialogue with our members/general public, as they pertain to ethical sourcing. In 2009, I still hold that ideal but now at this stage of my work with various industries, brands and factories, I need to be more circumspect. Simply because the people I work with (or need to) would rather not have mutual issues visible on the world wide web. I fully agree with that.

Our goal is to improve the working condition in factories that make bikes, footwear, clothing, tents and packs and etc., To build on our prior gains, we need to move to the next level of negotiations with our contract factories or industry colleagues. These conversations ought to be held in private which frankly in my experience makes blogging awfully boring.

Cheers

Israel, Apartheid and Boycotts Part 3

The motion to boycott Israeli suppliers was defeated at MEC's AGM on April 30. 

I have a bunch of observations but will keep most of them to myself simply because if I say "low" a whole bunch of people will be peeved or if I say "high" another group will be keyboarding furiously.

However, I will say I had surprisingly civil and respectful conversations/debates with both sides at our AGM.  For sure many are disappointed, many are relieved but still disappointed and many are out right angry.   I respect the range of emotions and for me personally, the politeness I had encountered is a refreshing pause in a seemingly intractable and unending struggle to achieve peace in the Middle East. 

Israel, Apartheid and Boycotts Part 2

MEC has been labeled a whole bunch of names including hypocrite for buying products from China, Taiwan, US, India, Sri Lanka and just about everywhere else outside of Canada.  Yesterday, a blogger found us to be "pathetically transparent racists" for presumably upholding the basic democratic tenets of being a co-operative.

For the record, the resolution to boycott Israeli suppliers is NOT being put forward by MEC or MEC employees.  It is tabled by members of MEC and it will be voted on at the upcoming Annual General Meeting (AGM).  As a co-operative, MEC is obligated to protect the right of members to participate in the co-op including calling for specific motions or voicing their views (both must comply with the rules of conduct and procedure for the AGM).   If protecting this measure makes MEC a forthright but pathetic racist then so be it.  The alternative of only allowing some voices to be heard is much more bothersome than being tossed an incendiary label.

Before us is an ordinary resolution calling on MEC to stop doing business with Israeli companies and it will be tabled at our upcoming AGM on April 30. It will be brought forward by a member (as is required by MEC Rules) and discussed and voted on at the AGM. While ordinary resolutions only require a simple majority of members in attendance at the AGM to vote in favour of them to pass, they are non-binding. So, even if the resolution passes, it will be considered as only one piece of information that bears on this issue.

MEC management and Board take this proposed resolution very seriously.  It will be considered in context to a host of other priorities and issues.  Our position on boycotts in general is clearly and unequivocally stated in the prior blog Israel, Apartheid and Boycotts. 

Thank you. 

Israel, Apartheid and Boycotts

Recently, I have gotten many emails from members requesting and demanding MEC boycott products made in Israel because of that country's handling of the Palestinian issue.  The occupied territories, restrictive social and economic policies, and the invasion of Lebanon and Gaza strip, according to these voices, mirror the worst policies of apartheid South Africa.  Furthermore, to break Israel's "oppression", the World must boycott Israeli businesses as it had done with the Botha regime of South Africa.  If MEC does not heed this request (and take the right moral position), they will boycott MEC stores (of which some have). 

As a recent response to the above development, a number of members have emailed me demanding that MEC can not and shall not boycott Israel.  According to this group, the conflict in the Middle East is complex and any effort to single out Israel would be both hypocritical in light of conflict in our other sourcing countries and shortsighted as a boycott does not address the real and fundamental security issues facing Israel.  If MEC were to boycott Israeli suppliers, these members would "never shop" at our stores again. 

Amidst the push and pull on MEC, by the committed sides on this issue, lies incredible suffering on those caught in this conflict.  This is obvious. As the cycles of violence perpetrated by all groups continue to ebb, flow and escalate many more will suffer.  This is deeply troublesome and is on the forefront of our mind. 

MEC is a Co-op retailer with a mandate to get Canadians outdoor by selling them the right gear and giving them the relevant technical insight.  MEC is neither a political activist group nor a human rights body.  Nonetheless, we believe business can and should improve the human condition behind manufacturing.   To this end, MEC takes a Canadian and international view of our global supply chain. Just as creed and country are not barriers to being an MEC member, we do not divide our supply chain along political lines. In short, we will not take sides in the Israeli-Palestinian conflict. Our human rights efforts are squarely focused on our supply chain—on working to improve the factory conditions and treatment of the workers that make MEC-brand products. As much as this is cowardice to some or a sell out to others, it is our conviction and our intent is to not veer from this belief. 

Renewable Energy and Renewal in China

We were tempted to install a solar panel on our garage roof top to heat our home's water.  We were quoted about $2500 - 3000.  Wow.  The pay back time on this is over 3-5 years with no real tax break and still leaving us largely dependent on the local electricity grid.  The economics didn't work. 

I'm on a roof top of a 700 worker factory in Dongguan, Southern China.  The factory GM installed solar panels on the dormatory rooftops to heat the hot water for the workers.  The total cost was $12,000 to supply enough hot water for a dorm of 700 workers.  (note hot water for workers doesn't mean 15 minute showers.  It means a bucket of hot water drawn from a central tap and taken to your room for bathing).  The solar panels have taken the dormatory's hot water tanks off the the city's dirty coal burnng electricity grid. 

A few months ago, I was on the roof top of another factory in the same region.  This facility planted a roof garden as a means to cool off the manufacturing floor.  It gets bloody hot in this area (40 degrees and humid).  The factory was disappointed with the results as it didn't have the dramatic effect they were hoping for.  Nonetheless, its a start.

For the past 300 years, China has only known chaos, violence, famine, mass murder, corruption and destruction.  The ability of the current government to largely stop this at the scale it was in the past is somewhat of a feat. This in no way legitimizes all the hardship the dictatorship has imposed on its people.  It's definitely a step forward from the level of violence China had gone through from the 1700's onward. 

Many of my Chinese colleagues believe its only a matter of time for China to evolve to a modern democracy.  I think they're right.  The adoption of renewable energy initiatives demonstrate forward thinking.  The same type of thought that will eventually renew China.