Daily Telegraph: Apple 'attacking problems' at its factories in China

28 January 2012
China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

Apple has defended its ethical standards after a newspaper reported factories in China rely on child labour, 24 hour days and unsafe conditions to manufacture iPhones, iPads and computers.

By Malcolm Moore in Shanghai
27 January 2012

In an email reportedly sent to Apple's 60,000 or so employees, Tim Cook, the company's chief executive said that Apple "cares about every worker in its supply chain".

The letter appears to be in response to a series of articles in the New York Times cataloguing the company's problems in China and divisions within Apple about how to handle the issues.

The paper said more than half of the suppliers audited by Apple have broken at least one part of its conduct code each year since 2007 and have even broken the law in some cases.

"Most people would still be really disturbed if they saw where their iPhone comes from," one unnamed former Apple executive told the newspaper.

Mr Cook's letter, which was reproduced on the website 9to5mac.com, promised that Apple would "continue to dig deeper" into problems in China and that it would "undoubtedly find more issues". "What will not do, and never have done, is stand still or turn a blind eye to problems in our supply chain," he added.

"Any accident is deeply troubling, and any issue with working conditions is cause for concern. Any suggestion that we don't care is patently false and offensive to us. As you know better than anyone, accusations like these are contrary to our values. It's not who we are," he said.

As criticism has mounted of Apple, and threatened to tarnish the company's brand, its shares have risen to record highs, especially after the company said it had doubled its profits in the first three months to $13.1 billion (£8.35 billion) because of sales of its gadgets over Christmas.

Apple has monitored its factories in China since 2007. However, as sales of Apple's gadgets have soared, putting intense pressure on the company's suppliers to ramp up production, a spate of suicides, explosions and poisonings have occurred.

As Apple has improved and extended its monitoring, its annual reports have exposed more problems. In the company's latest report, it found at least 90 factories were asking workers to work for more than 60 hours a week, the company's own guidelines, which are themselves significantly over the 40-hour limit imposed by Chinese law. Apple also found five cases of child labour at factories.

In response to outside pressure, Apple this year published a list of its 156 suppliers, representing almost all its supply chain, for the first time. It also joined the Fair Labor Association, becoming the first technology company to do so. Apple has also worked with Chinese labour rights advocates, environmental groups, and has agreed to allow outside monitors into its suppliers' factories.

Nike, the athletic company, was a founding member of the FLA after it suffered intense criticism in the 1990s for using sweatshops in Asia.

Auret van Heerden, the president of the FLA, told Bloomberg that Apple is now going through a similar process. "Most big corporations have their 'Nike moment' at some stage, when they realise the difficulties of maintaining their standards, particularly in an increasingly global environment," he said.

However, Mr Van Heerden added that Apple's factories, including Foxconn, remained some of the best places to work as an unskilled labourer in the developing world. "If you are a 16-year-old girl in a developing country, your best chance of enjoying proper rights is if you get to work at a multinational company," said Mr Van Heerden. "The power of their contract is more powerful than the power of law".

Foxconn, which came under intense criticism for its "military" style working conditions, said 8,000 people apply to work at its factories every day. More than a million people work at Foxconn, but the Taiwanese company has a tin ear for public relations, with its chief executive having to recently apologise for comparing the management of his workers to the management of zoo animals.

One of China's leading labour advocacy groups, China Labour Bulletin, asked if Apple had the power to improve the lot of its workers. Only three companies in China - Foxconn, Pegatron and Quanta - have the ability to mass-manufacture Apple's products competently and on deadline. And they are being pushed to ever thinner profit margins for their work.

"It would seem that sharing profits with suppliers could be one way in which Apple could improve working conditions," wrote William Nee of CLB on his blog. "But then again, this voluntary step would fly against market dynamics and there is no guarantee that suppliers would pass the benefits onto the workers [...] What incentive does Foxconn have to improve standards if they know full well that Apple's entire business model relies on them?" Mr Nee said there were "no easy answers" to the problem.

Meanwhile, the New York Times reports on Apple have drawn a measured response inside China, with many commenters pointing out that other technology companies are equally guilty of worker abuse, and that further regulation could make lives for the workers worse.
"Construction workers and farmers are also living a harsh life in China, shall we also boycott housing and grains," asked Zhou Zhimei, one commenter. Another said the conditions in the factories should be better policed by the Chinese regulator, whose responsibility it was.

"If Foxconn were to abide by the labour law, the wages would be lower.If workers establish a formal union, lots will be disappointed and return home to rural areas. The production cost of Chinese manufacturing will increase and Chinese factories will lose their competitive advantage. Who would be happy if that really happened?" asked another commenter.
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