Supply chain labour problems have emerged as a key risk factor for China-based and global companies which rely on Chinese suppliers. Responsible investors are becoming increasingly aware of how these risk factors can influence their investments. Not least of these factors is the issue of poor labour conditions and in particular excessive overtime.

ASrIA released the Report "An SRI Perspective on the Impactt Overtime Project' at the SRI in the Rockies conference in late September, 2005. The report, which is the result of a collaboration with Impactt Limited (Impactt), is intended to bring the results of Impactt's well regarded work on the problem of overtime in China's supply chain, to a new and broader audience. It is based on a longer report entitled 'The Impactt Overtime Project: Tackling Supply Chain Labour Issues Through Business Practice' and provides the key findings as well as key commentary for SRI investors.

On the one hand, investors face important moral issues associated with investing in companies which buy or produce low cost goods at the expense of workers' health, safety and welfare. On the other hand, investors have to be realistic and pragmatic in understanding the pressures that manufacturing companies in particular face in terms of keeping their business models sustainable in an extremely competitive and time-driven marketplace. Companies engaged in supply-chain related business therefore have been finding themselves caught in a seemingly irreconcilable position between remaining financially competitive on the one hand, whilst meeting increasingly stringent labour related standards as well as increasing customer requirements on the other.

The Overtime Project Report is the result of three years hands-on practical experience by Impactt, working closely with 11 UK based brand-name purchasing companies and their local manufacturing partners in Southern China. The purpose of the project was to explore in practice the idea that if improvements in productivity can be achieved in a way that benefits workers, then it can be shown that higher labour standards can, in fact, support the goal of running a financially competitive business.

The results of the project shift the debate from a focus on applying standards to a focus on active engagement as a means to raise productivity and clearly illustrating that productivity can be improved without compromising labour standards.  The strategies discussed in this report provide an alternative approach to the more traditional audit and compliance model and can provide assurance to investors that there are strategies that companies can adopt, which will enable them to balance high labour standards, high productivity and increased market competitiveness.

ASrIA is a not for profit, membership association dedicated to promoting corporate responsibility and sustainable investment practice in the Asia Pacific region. ASrIA's members include investment institutions managing over US$4 trillion in assets, however membership is open to any organisation which has an interest in sustainable investment. ASrIA's goal is to build market capacity for SRI through the publication of up to date and accessible information on the development of SRI in Asia and globally and to provide a platform for different sectors within the community to exchange information and perspectives on SRI.