Labour rights workers in Guadalajara confirm the picture. Juan Carlos Paez, of the Centre for Reflection and Action on Labour Rights (Cereal), says: "Last year, the average pay for production line workers was a not very generous 500 pesos (about £24.80) a week. This year, most people are being offered 450 pesos."

He adds that productivity bonuses, once the norm, are becoming rarer, as are opportunities to obtain loans against salaries. Contracts are getting shorter. The Financial Times interviewed one technician who is now on his 21st one-month contract. Redundancy pay-offs, when they are made, are on the basis of the last contract, not on the totality of their work for a company.

These interviews support the findings of a report published today by Cafod, the UK-based Catholic development charity. It highlights the harsh and often humiliating experiences of workers who make personal computers, printers, monitors and components in Mexico and China for big producers such as Dell, Hewlett-Packard and IBM.

The technology industry has, until recently, escaped the supply-chain scrutiny that has damaged the reputations of big brands in the footwear and clothing industries. But interest in what happens at the lowly end of high technology is growing, just as the industry shows signs of recovery from its 2001 slump.

In Clean Up Your Computer, Cafod's researchers report that electronics workers in the Pearl river delta in China often face dangerous conditions from toxic chemicals, smoke from soldering, metal dust or noise. In China, it says, workers who test monitors can spend 11 hours a day in front of flashing screens.

There was no health and safety training in many fac tories in Dongguan, where a Hong Kong-based partner of Cafod carried out most of the research for the study. It reports that workers, many of them young women from rural China, are often in debt to a labour agency before they start their job. Their basic wage can be well below the legal minimum and many work excessive overtime, sometimes totalling 16 hours a day, seven days a week.

Faced with such competition, labour rights in Mexico are under growing pressure.

Guadalajara, Mexico's second city, is proud of its electronics maquiladoras, which import components and put them together for re-export. They have created more than 100,000 jobs in the area since the decision was made, early in the 1990s, to try to take advantage of the city's technical universities to turn it into Mexico's "Silicon Valley".

Safety conditions in the factories are not generally an issue. Flextronics, one of the largest contract manufacturers, has a huge campus on the outskirts of Guadalajara. It is spotlessly clean, noise levels are low and it even boasts its own floodlit soccer pitch.

Pressure has instead been exerted on labour standards. The city is in the state of Jalisco, which sends more migrant labourers to the US than any other, escaping poverty in Mexico's increasingly uncompetitive agriculture sector. There is a huge supply of unskilled labour. Thanks to the state's treasured technical education, there is also an over-supply of skilled technicians and engineers, who find themselves readily expendable.

The employment structure has also allowed companies to circumvent Mexico's labour laws, which in most sectors of the economy are supportive of unions. The main computer brands cut costs by outsourcing assembly to contract manufacturers, such as Flextronics, Jabil, Celestica, Samina-SCI and Solectron. But even these companies do not directly employ the workers. Instead, they are employed by agencies, of which there are now 51 in Guadalajara, according to Cereal.

This means that despite having their own codes of practice on labour rights, the big computer brands have little or no daily control over employment conditions.

Many basic requirements of job security under Mexican law can be bypassed if workers are employed by "intermediaries" rather than by their plant. One agency, PyMPSA, is currently advertising in the Guadalajara papers for production-line workers. One of the requirements, printed in the ads, is that they are women. Men need not apply.

Aurea del Carmen Juárez, a psychology researcher at the University of Guadalajara who used to work as a psychologist for CIEM, a large agency that includes IBM among its clients, describes how she used to pick candidates. "What they want is people who don't have much self-esteem or aspiration," she says.

Applicants are first screened for basics. If they have ever been involved with a union, have relatives who are politicians or lawyers, or have spent time in the US, their chances end there. These all indicate ambition, and the potential to cause trouble, Ms Juárez says. Different companies have different standards on the acceptable quantities of tattoos and body-piercing, while candidates are also questioned closely on drug use.

After that, the process is designed to recruit the least ambitious and imaginative candidates. After a day of tests, fewer than a third are accepted. "Things like your skills come second," says Ms Juárez. "What's most important is that you cause no trouble."

Hundreds apply every day to the agencies, which sometimes operate out of kiosks in street markets.

Workers told the Financial Times that agencies often went recruiting in outlying villages, where agricultural jobs have been lost and where many try to migrate. Women, who account for between 60 and 70 per cent of applicants, generally account for 80-90 per cent of those accepted. "The ones they like best are single mothers," says one technician, because they are least able to protest.

Psychometric tests ensure that creative and imaginative minds do not get through. Ms Juárez details how she would ask candidates to draw a tree. Those who drew a small stick tree, unadorned, were likely to be accepted. Those who drew trees with big root systems, coloured in the leaves and put fruit on the branches, betrayed too much ambition and imagination.

Those candidates who passed the psychological evaluation would move on to the plant. Women generally have to give urine and blood samples and take a pregnancy test.

A woman named Monica told Cafod of her medical examination before working on a production line making components ultimately destined for HP. Her medical involved stripping naked so that she could be checked for tattoos. Then she was ordered into the bathroom to take a pregnancy test.

She described the experience as "humiliating" and "completely degrading", but did not complain as everybody else was receiving the same treatment.

Workers who talked to Cafod also believed themselves to be subject to reprisals. Ramona, employed by the Caspem agency, made hard discs for IBM for four years, on one-month contracts. She first had to prove that she was not pregnant. Her pay was deducted for taking two days to be at her father's death-bed. After she talked to Cafod, she was questioned about her decision to spend time talking to English people and her contract was not renewed.

She now works in one of Guadalajara's few surviving shoe factories (that industry largely went to Asia several years ago), on less money.

Isis, a British asset management firm, last week warned that technology companies could face lawsuits, attacks by pressure groups and higher costs unless they did more to manage risks in both their supply and disposal chains.

The fund manager ranked 11 big companies on how they tackled environmental issues and labour standards. HP and Nokia were the best performers, although both, it says, have more to do on labour standards. Siemens was the worst performer in both areas. IBM was in the weakest group on labour standards and Dell was in the middle.

This corresponds with Cafod's report, which looks at computer industry leaders Dell, HP and IBM (see box).

All the companies have responded to Cafod. HP, replying to the case of Monica, who was required to strip and take a pregnancy test, said that it would "engage with all our suppliers to ensure that the practices mentioned are not taking place in support of HP".

Responding to the case of Ramona, fired after talking to Cafod, IBM said that it considered the issues raised to be "serious". It added: "We need to go further to understand supplier practices, and to determine if there are any gaps between what suppliers are doing and what we require of them."

Investors need to know the leaders and laggards, says Elliot Schrage, a professor at Columbia University Business School and a former senior executive at Gap, the clothing retailer.

"How companies manage these emerging risks will unquestionably affect their performance and their prospects. Investors have been burnt before with the ICT [info-communication technologies] sector, and vigilance today may prevent heartache tomorrow."

MANUFACTURERS ACCUSED OF FALLING SHORT IN CODES OF CONDUCT ON LABOUR The Cafod report says Dell, HP and International Business Machines all have deficient codes of conduct relating to labour conditions in the supply chain, writes Alison Maitland. One of its main complaints is that, with a few exceptions, they refer to compliance with local law rather than international labour standards. "While local law is crucial, it is often not implemented properly, as for example with overtime regulations in China," Cafod says. "In those circumstances, codes can be a crucial means to inform workers about their rights and thus help them to enforce those rights." None of the codes provides unequivocally for freedom of association, a serious weakness when so many workers in the computer supply chain are unable to assert their rights. In China, free trade unions are banned and there is rarely any other form of participation in factory decision-making. Nor does any code include a commitment to providing regular employment. "This is a significant omission given that many of the problems suffered by workers in the electronics sector relate to their temporary status." The report examines each code in detail, comparing it with standards drawn up by the Ethical Trading Initiative, a UK alliance of companies, non-profit organisations and trade unions that promotes best practice in the supply chain. It finds HP's code superior to the other two in specifically applying to primary and secondary suppliers and containing provisions on freedom of association, child labour and harsh or inhumane treatment. Dell's code is better than IBM's in ruling out forced labour and collaboration with organisations that break laws on working hours. IBM told the Financial Times last week that it was reinforcing its anti-discrimination policy with its suppliers after seeing Cafod's findings. It would include new language prohibiting them from discriminating against employees or job applicants on grounds of "race, colour, religion, sex, age, national origin or any other legally protected status". Cafod says all three companies have welcomed its initiative and have asked to continue discussions. In setting out an agenda for change, it says the big brands need to review the pressures they impose on suppliers. "They must conduct their core business in such a way that suppliers can implement labour standards, for example by negotiating appropriate prices and lead times."