Addressing Abuses at Apple Facilities in China

By Meg Roggensack

The Fair Labor Association (FLA), on whose board we serve, is investigating and will publish results of its independent audit of Foxconn facilities in Shenzhen and Chengdu. The report will assess working conditions in the facilities using the FLA’s code of conduct, which encompasses worker rights, health and safety and environmental issues. The FLA will also outline the required remedial action. Human Rights First is hopeful that the FLA’s report will be tough but fair, in both tone and substance, and will demonstrate to critics that their concerns have been carefully considered and will be addressed.

We are also hopeful that Apple will end the persistent and recurring abuses at Foxconn, such as excessive working hours and unsafe conditions, and will work with the FLA to identify and address the root causes no matter where in the supply chain abuses occur. Apple’s competitors, including Dell and Hewlett Packard, also use Foxconn, and they are now on notice that working conditions there are unacceptable.

These companies should take immediate steps to follow Apple’s lead, and Apple should actively encourage them to do so to ensure that efforts to improve conditions at Foxconn succeed. Unless Apple’s competitors commit to independent audits and remediation, their reputations are also at risk.

There is ample evidence of worker abuse in iPad factories in China. As the New York Times has reported, and as Apple’s own audit reports confirm, workers face harsh conditions:

• More than half of audited facilities in 2011 violate Apple’s limits on how many hours and days a week people should work.
• In at least half of all yearly factory audits since 2007, excessive hours of work, in the form of continuous shifts and extended overtime, have been reported.
• Workers received less than minimum wage and inadequate compensation for overtime, and had pay withheld as punishment.
• Some factories audited in 2011 used foreign contract workers who paid excessive recruitment fees to get their jobs, which is a form of indentured servitude.
• Other factories used underage workers.

Workers also face life-threatening and hazardous conditions. In 2011 four workers were killed and 77 injured in plant explosions from combustible dust. The risk of explosion could have been easily addressed with proper ventilation, according to a U.S. safety expert interviewed by The New York Times. The Times analyzed Apple’s reports for 2008-2010 and found that over a hundred employees were injured by toxic chemical explosions. Other safety violations included improper handling of hazardous materials, inadequate control of air emissions, and a lack of basic safety prevention and emergency preparedness measures. Apple’s own reports demonstrate that the company has known for years that factory conditions don’t meet the company’s own standards.

Why hasn’t Apple, so famously effective at solving engineering problems, been effective at addressing persistent labor and safety violations in assembly factories? As New York Times reporter Charles Duhigg explained to This American Life host Ira Glass, “Apple’s desire to change things within factories runs up against other desires. This desire for quick turnaround, for almost continuous innovation, for delivering products with large profit margins to fund future innovation. Right? So, no matter how strong your desire is to improve working conditions, it comes at a cost to the product at some point.”

Where is that point? At Human Rights First, we think Apple’s announcement last week of a quarterly stock dividend and share buyback shows that Apple has ample flexibility to address working conditions without sacrificing innovation. Apple has demonstrated its ability to tackle tough worker rights challenges, and has set the gold standard in one difficult area – zero tolerance for indentured migrant labor by mandating the return of excessive recruitment fees, resulting in the return of $6.7 million in fees since 2007.

To address the abuses at Foxconn and to ensure that they don’t recur, we recommend that Apple commit to several key steps:

• Take full responsibility for factory conditions. Human Rights First encourages Apple to set a clear timetable and method for addressing these violations, and to commit to full public reporting on progress. Full public reporting will help Apple restore confidence with its stakeholders, including Human Rights First, who are deeply concerned for the lives of the workers who make the company’s products.
• Immediately conduct a comprehensive study of its purchasing practices, which have a direct and deleterious impact on factory working conditions, as the FLA has learned when working with footwear and apparel brands. This comprehensive study will help to identify many of the root causes of continuing abuses.
• Encourage competitors using Foxconn to collaborate with it and the FLA in improving factory working conditions, to ensure that progress is swift and sustainable.
• Pay a fair price for its products so that its factories can in turn pay fair wages to workers. This means embedding expectations in Apple’s contracts with suppliers, dedicating additional, senior Apple staff to drive change, and working closely with the FLA to build factory capacity to meet requirements. These steps will ensure that additional payments for products are used to improve factory conditions, and planning for the possibility of supplier termination and replacement.
• Maintain senior management engagement to drive improvement. CEO Tim Cook has been visible and vocal about the challenges facing Apple. That level of leadership engagement is crucial to the success and credibility of Apple’s efforts to change working conditions in China.

Apple founder Steve Jobs was known for his ability to bend facts to his purposes, through a combination of charisma and indomitable will. In the process, he made products that are, in his words, “insanely great.” The choice that now confronts Apple is one worthy of its talents – to face the grim reality of current production practices, and commit to reversing them, so that its products are, in human as well as technical terms, truly, insanely, inspiringly great.