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The use of Prison Labour – in the US

The use of manpower in prisons can be an aspect of forced labour and, consequently, Global Compact members must be aware of potential issues. The pivotal factor is that the work must be carried out on a voluntary basis and that the working conditions must meet the rules of imprisoned manpower.
In Texas, USA, jobs have been created in prisons in order to accommodate the very high rate of relapse into crime after imprisonment.

The use of imprisoned manpower in Texas is regulated via a special programme, the PIE program (Prisoner Industry Enhancement Certification Program), which is supervised by the American Justice Department.  

After acquiring a part of the company Chatleff Controls in 2007 which makes use of imprisoned manpower in the Lockhart correctional facility in Texas, Danfoss has had to deal with the role as a user of prison labour. According to the acquisition agreement, the company would continue to supply Danfoss Chatleff after the takeover.  

All of the inmates under the PIE program are employed on a voluntary basis and are paid a salary which is not allowed to be below the local minimum wage level. There are a number of deductions from the salary to pay for the imprisonment, compensation for victims, support to the PIE programme etc. When this has been distributed, approx. 20% is left for the inmates and 20% for any children. Auditors from the PIE program carry out audits at the Lockhart facility four times a year, and one solely concerns salaries.  

Openness
 
Danfoss is in continuous contact with a large range of interest groups. In 2008, Amnesty International raised criticism of the acquisition and use of imprisoned manpower at Danfoss’ supplier. This resulted in the group’s CSR function paying a visit to Danfoss Chatleff and the supplier at the Lockhart facility. The original owners of Chatleff and five former inmates were interviewed.  

The interviews showed that inmates are on a waiting list to get a job in the prison and that several former inmates described the PIE program as very valuable: they improved their skills which, in turn, increased their job opportunities, and they got the chance to start a new life after their incarceration because they had some savings at the time of their release.  

Currently, seven former inmates work at Danfoss Chatleff. Five of them have senior positions, such as team leaders or supervisors in the company.

Corporate Citizenship

Danfoss’ overall goal within Corporate Citizenship is "keeping our own house in order".
This applies to employees, so that they have an attractive workplace and a healthy work-ing environment. It applies to the environment, where Danfoss products contribute to energy savings, and where the environmental impact of their production is constantly being reduced.
And it applies, in a broad sense, to social and ethical responsibility.
Efforts are continually being intensified, because when employee satisfaction is high, consumption of resources is as low as possible, and the company’s ethics and reputation are good, the result is a positive effect on the accounting bottom line.