Labor Activist: Apple Best at Auditing Factories, Still Not Doing Enough

Apple and Foxconn

Labor Activist Li Qiang wants you to know that the iPhone 4 in his pocket is not an endorsement of Apple’s policies, just an acknowledgement that the company is doing a better job of monitoring factory conditions than its peers. The founder of leading advocacy group China Labor Watch (CLW) told us that, though the Cupertino company does more-thorough inspections than competitors, it is responsible for poor working conditions at its suppliers’ factories and needs to invest some of its record-breaking profits in improving them.

“Although I know that the iPhone 4 is made at sweat shop factories in China, I still think that this is the only choice, because Apple is actually one of the best. Actually before I made a decision, I compared Apple with other cell phone companies, such as Nokia,” he said through a translator. “And the conditions in those factories are worse than the ones of Apple.”

Li explained that Apple is one of the few OEMs that discloses its factory audit reports to the public and he lauded the company’s honesty in disclosing serious vendor violations like child labor or safety violations to the public. Indeed, a quick read of Apple’s 2012 Supplier Responsibility Report reveals such potentially embarrassing facts as:

  • Involuntary Labor: Apple discovered 17 facilities that required their workers to pay excessive recruitment fees, effectively forcing them to work off these debts as indentured servants. The company says it terminated business with one repeat offender and required the rest to reimburse workers for any fees that exceeded Apple’s limits, a total of $3.3 million.
  • Underage Labor: Auditors discovered 19 cases of underage workers at five facilities in 2011, though 13 of those were workers who had either left or aged since their hires. Apple says it required its suppliers to “support the young workers’ return to school.”
  • Lack of Protective Gear: The company found 58 facilities where workers either lacked the proper protective gear, weren’t using the gear, or didn’t know how to use the gear. Apple says it required the facilities to educate the workers and supervisors about the importance of protective gear.
  • Poor Emergency Preparedness: 99 facilities were in some form of non-compliance with fire prevention standards.
  • Too Many Hours: 93 facilities had more than 50-percent of their workers exceeding the 60-hour weekly limit on work time. Apple hired a consultant to help suppliers manage their workers’ time better.
  • Explosions: This wasn’t much of a disclosure, since explosions at two Apple plants were public knowledge before the report, but the company said it has changed its rules about working with toxic dust, the source of the fires.

By comparison, HP’s detailed audit-findings page, which does not yet include information from 2011, only shows a vague percentage of worldwide suppliers who were in conformance with standards categories like “child labor avoidance” and “freely chosen employment,” without providing specific numbers of violations and remedies taken. Dell provides a list of its top suppliers and lists the labor standards it follows, including international conventions like the Electronic Industry Code of Conduct (EICC), but doesn’t show a list of specific violations it has uncovered. 

Ironcially, Apple appears to be less concerned about factory conditions than its competitors, because of the company’s unwillingness to talk with advocacy groups like China Labor Watch and Students and Scholars Against Corporate Misbehavior. Li said Dell and HP responded to his group’s reports about working conditions in their factories, but Apple ignored them. SACOM’s Debby Chan told us she had had helpful conversations with both Dell and HP, but Apple had refused to meet with her. 

“Dell and Hewlett Packard are not doing as good as Apple is doing right now,” Li Said. “But when we talk about publicity and public relations, it’s another story.”

Auditing Doesn’t Always Reveal the Truth

Though most large hardware makers conduct thousands of supplier audits a year, those audits may not be enough to uncover the truth and correct problems. Li explained that bribery of auditors is common at Chinese factories, because it’s less expensive to make a pay-off than to fix an unsafe condition. He said his company has uncovered at least nine cases of bribery at Intertek, a leading auditing firm and is currently involved in a lawsuit against the company for allegedly publishing the name of a confidential informant who had witnessed incidents of corruption. 

Even when inspectors act in good faith, a simple visit may not be enough to uncover abuses, because supervisors prepare just for the audits. In a very detailed report based on worker interviews and undercover work, China Labor Watch details conditions at 11 factories that make products for a number of suppliers including Dell, HP, Lenovo, Philips, Apple, and others. In the section on  Hongkair Electronic Technology, a supplier that makes components for ASUS, Apple, HP, IBM, China Labor Watch writes: 

The factory often has different customer representatives come visit them to do an inspection of factory facilities. At the time of inspection, the factory will demand workers wear the appropriate safety protection equipment, will turn on all the factory lights, and will make an effort to clean up the factory grounds.

Apple states on its website that it has begun working with the Fair Labor Association (FLA) and will allow the association’s inspectors into its factories and allow them to post the results of these audits to the FLA website. “This represents a level of transparency and independent oversight that is unmatched in our industry,” Apple says. 

Li said he’s unimpressed with Apple’s partnership with the FLA, because Intertek conducts some of their inspections. However, Li feels that Apple’s own inspections are probably fairly accurate because of all the embarrassing abuses they’ve detailed.

Employee Hotlines a Solution

If audits don’t always uncover the truth, there’s another way to find out what’s going on at the factories: Just ask the workers. Li said a number of advocacy groups are currently testing hotline programs in cooperation with major OEMs. Workers can call these numbers and report abuses, which then get sent straight to the companies involved.

Li would not disclose the names of any companies involved in these pilot programs, because they have asked for confidentiality right now. However, he said that companies need to involve all the facilities that make their products, not just a few.

“For example if the company has 100 supplier factories in China, maybe they just wanted to involve like 20 or even less of them to participate in the hotline program,” he said. “They have to consider in the cost of the whole program that as soon as they find out about problems they have to remedy them, which is money-consuming as well.”

Foxconn One of the Best

According to employees  interviewed by China Labor Watch, the conditions at many suppliers’ factories are far worse than those found at Foxconn, a company that has become infamous because of a series of high-profile incidents such as employee suicides and a fatal explosion. However, according to the China Labor Watch report “Tragedies of Globalization: The Truth Behind Electronics Sweatshops,” workers at the two Foxconn plants they investigated received health and safety training, along with all necessary gear, before starting work. Machines at the plants are reportedly maintained and checked for safety every day. According to the report, Foxconn workers even have a trade union with a workers’ care center hotline for reporting problems.

All of this is not to say Foxconn, which manufactures products for Apple, HP, Dell, and many other OEMs,  is a pleasant place to work. As with other plants, the managers are reportedly verbally abusive, the work is grueling, and one of the Foxconn factories apparently required a lot of overtime with few breaks. However, workers at the Longhua Foxconn plant received better wages and benefits than those at any of the 10 factories China Labor Watch investigated.  

“Foxconn is not good,” Li told the New York Times.  ”But if we compare all industries, electronics, textile, toys, Foxconn is one of the best.”

Meanwhile, at other factories China Labor Watch investigated, workers and undercover agents reported serious health and safety problems, along with even more exploitative wages and poor working conditions. For example, at Catcher Technology, a company that makes notebooks and phones for Acer, Apple, ASUS, Dell, IBM, Motorola, Nokia and Sony, workers are allegedly given no safety training and are then forced to inhale noxious and potentially toxic fumes. Labor Watch writes:

If a worker has an  accident, it is their own problem. There is no systematized health and safety education training . . . Workers wear masks during working hours, although the masks do not serve much of a purpose. Workers report that especially the grinding of the cell phone case creates very fine powder which is extremely easy to inhale into the nose and lungs.

At Compal Electronics, a huge supplier that manufactures notebooks for Dell, HP, Lenovo and Toshiba, workers reported that the company does not provide face masks or ear plugs, despite loud noises. Apparently, there was not even  a first-aid kit available. “In the event of an injury,” Labor Watch writes, “the workshop manager will give the injured worker some cotton to cover up their injury.”

Apple, Suppliers, Authorities: Who’s to Blame?

Reading about the abusive managers, poor safety conditions, filthy living accommodations, long hours, and low wages, it’s tempting to blame the suppliers who run the factories or government authorities who are charged with enforcing China’s 2008 Labor Law. According to Li, China’s Bureau of Labor is limited in its abilities by local governments that receive tax revenue from the factories, but don’t have to provide benefits to what they classify migrant workers. The suppliers, he says, are also limited, because of price and production pressures from Apple and the other OEMs.

“If Apple still lowers their prices and doesn’t give enough profits to the factories, then the factories don’t have money to improve the labor conditions,” he said. “So it’s always the problem of Apple and not the problem of factories. We can see that Apple is trying to put all the responsibility on the factories by releasing the supplier factory list and trying to put the factories into the focus of the immediate public, but we think that Apple should do more to make a positive change in the whole system.”

Though he believes that Apple has done a better job of inspecting its factories than others, Li maintains that the public is right to put more pressure on Tim Cook’s company than its competitors who have the same problems. Because Apple makes the most profit, he reasons, it also bears the most responsibility for fixing a broken system. He maintains that it wouldn’t take more than 2-percent of Apple’s profits to dramatically improve workers’ lives in China while companies such as Dell and HP would have to spend more.

“Although we think Apple is among the best in terms of auditing, we still think that Apple can do more because it is the most profitable company in the world,” he said. “As soon as Apple is willing to give a small percentage of its profits, the workers can benefit a lot. But Apple is not willing to do that.” 

AUTHOR BIO
Avram Piltch
Avram Piltch
The official Geeks Geek, as his weekly column is titled, Avram Piltch has guided the editorial and production of Laptopmag.com since 2007. With his technical knowledge and passion for testing, Avram programmed several of LAPTOP's real-world benchmarks, including the LAPTOP Battery Test. He holds a master’s degree in English from NYU.
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  1. China Labor Watch Says:

    http://www.facebook.com/notes/china-labor-watch-clw/open-letter-from-clw-to-apple/335313373176063

    Tim Cook
    CEO, Apple, Inc.
    1 Infinite Loop
    Cupertino, CA 95014

    Dear Mr. Cook,

    I am one of the millions of people who use an iPhone every day. It’s stylish and easy to use and it enables me to check my email at anytime from anywhere. I often use my iPhone to reply to urgent emails I receive from China Labor Watch’s investigators about the status of their investigations of Apple’s Chinese supplier factories. I also use my iPhone to answer questions from journalists about the working conditions in those factories. As a labor activist who has spent over a decade fighting against sweatshops, buying an iPhone was not an easy decision for me to make. Although the international anti-sweatshop movement has recently trained its focus on Apple’s supply chain, I find that the labor conditions in Apple’s Chinese supplier factories are actually not the worst of the factories used by multinational electronics companies there.

    However, this is what “not the worst” means for workers in the factories that make your products:

    - They have to work as long as 11 hours a day, 6 days a week with only one hour-long break during lunch. For this they only make about 2000 RMB a month, which at current exchange rates is only $320.

    - Those that work in the iPad case polishing workshop are exposed to vast amounts of aluminum dust and may be injured or even killed in an explosion should the dust ignite. This has happened twice in the past year. First, in May 2011 at a Foxconn plant in Chengdu (3 killed, 15 injured) and then in December 2011 at a Ri Teng plant in Shanghai (61 injured).

    - At the factories of Foxconn, one of your largest suppliers, 13 workers committed suicide in 2010. Foxconn’s response of putting up nets on factory buildings to catch suicidal jumpers indicates that it believes this is an ongoing concern, since many of the environmental factors that may have led to the workers taking their lives — including long working hours, social isolation and loss of agency — remain unchanged.

    As a result, that Apple’s suppliers aren’t the worst in the Chinese electronics industry probably says more about other Chinese factories than it does about the ones your company uses.

    As you said in your letter of January 26th to Apple’s employees, Apple has done more recently to improve these conditions, having disclosed its full list of supplier factories, made efforts to “inspect more factories” and “educate workers about their rights” and even “opened our supply chain for independent evaluations by the Fair Labor Association.” This assumes that the problem is with Apple’s suppliers, rather than with Apple itself. However, there are still two big questions that Apple needs to answer before it can truly claim that this is the case.

    First, how can a company that claims to make working conditions a priority make such astronomical profits at a time when those making its products are obviously suffering? Recently, Apple has seen its profitability soar to new heights. In the first quarter of the 2012 fiscal year, Apple made $46.33 billion in revenue and made a net profit of $13.06 billion, its largest profit ever and one of the largest quarterly profits of any American company in history. And you, personally, received stock options worth $380 million shortly afterwards. Let’s do some simple math. The $13.06 billion net profit Apple made in one single quarter is equal to the combined salary of 300,000 workers at Foxconn’s assembly line over the course of eleven years. And the value of your options alone could pay for those 300,000 workers’ salaries for that extremely profitable quarter. And remember, those workers have to work 240 hours a month or more and some workers are required to stand all day long without a restroom break.

    Second, how can a company with as much control over its manufacturing process as Apple has not already know what labor conditions are like in its supply chain? From our research, the production processes (and by extension, the intensity of the work that employees have to perform) at supplier factories have been approved by Apple. Apple’s quality controls mean that only those who meet the standards Apple design can get a production order. The raw materials the factories use have to be purchased from the suppliers Apple designates. As a result, most supplier factories manufacture products according to Apple’s specific guidelines and have no ability to alter them.

    We believe that the answer to these questions is that the problem is not a result of a few “bad apples,” in the midst of the supply chain but is rather deeply rooted in your company’s business model. It’s a systemic problem resulting as much from decisions made in Cupertino, California as from those made in Chengdu, China.

    We believe the most basic cause of the problems at Apple’s supplier factories is the low price Apple insists on paying its supplier factories, leaving next to no room for them to make a profit. The demand for astronomically high production rates at an extremely low price pushes factories to exploit workers, since it is the only way to meet Apple’s production requirements and make its factory owners a profit at the same time.

    To be fair, Apple’s problems are not unique. They are faced by the entire electronics industry and its customers as they attempt to manage a global manufacturing system that locates factories wherever the cost of production is cheapest. The key choice Apple has to make as a company is whether it will try to shift the attention of journalists and the public towards the individual factories that make their products, or will sincerely acknowledge its responsibility for these factories’ deplorable working conditions and make systemic changes to its supply chain.

    Over the years, China Labor Watch has sent many letters to Apple about our investigations of its Chinese supplier factories, hoping that we could work together to find a way to solve the problems workers face. But Apple has never responded. However, we now feel that perhaps the time for analysis has ended. There is a simple solution for the problems we have observed in Apple’s supply chain. And it doesn’t even involve raising the prices on the American consumer who buys its products. It is simply sharing a larger proportion of Apple’s sizable profits with the supplier factories it contracts with, and by extension, the people who make its products. And perhaps if Apple’s customers no longer have to worry about the ethical implications of buying an iPhone, it will be able to go on to earn even more in the future.

    Sincerely,
    Li Qiang
    Founder and Director, China Labor Watch

  2. Cole Says:

    Equating responsibility with profit, as Li Qiang does, is simply naive. So is moaning about the fact that apple won’t “work with you” when they are clearly doing a great job without you since as you admit, they are better than any of the other firms that have manufacturing bases in China.

  3. Jim H Says:

    I have to say just one thing: why is this Apple’s fault, or anyone else’s but the Chinese labor situation? I believe that China is ruled by a communist government. What is Li Qiang doing, complaining to the capitalists? If you want your conditions to be improved, isn’t that the responsibility of the government? Why is the labor movement bugging Foxconn for better wages? Asking the politburo for help?

  4. animatio Says:

    @cole … never read a more arrogant note than yours. this is more than offending every working being in a production lane.
    one might have thought that the times of slavery and imperial exploitation would be past. instead the contrary is the case in a so called “market oriented society”. this money grabbing attitude of – in this case american management and shareholders – is one of the ugliest forms of human egoism and disrespect existing these times. thus said, letting everybody participate in a decent way in regard of the distribution of profit (worker equally as management and shareholders) is a main question of respect, responsibility and last not least of common social welfare. it is time to end this feudalistic behavior of modern economies and their protagonists.

  5. AdamChew Says:

    Kind of funny to read that HP responded and if they did why the same working conditions in these factories as they are using the same facilities as Apple.

    I am getting fatigue over this subject – sweat shop, poor working conditions and what have you.

    Stop flog this dead horse, revisit it in six months time will be better and stop try to get hits.

  6. Gustav Says:

    Li Qiang,

    Foxconn’s suicide rate is lower than that of the US, or the rest of China.
    Foxconn’s pay is above average for China too.
    Workplace deaths are also lower than that of the US or the rest of China.

    As Cole said, why equate profits with responsibility? Are you saying if Apple wasn’t as successful, it’d be ok to treat employees worse?

  7. TimT Says:

    This article supplies something that the NY Times article doesn’t, context on overall conditions in China and feedback on what other companies are doing. And it’s clear that the Times manipulated their coverage to make it sound like Apple is the big problem — which is just the opposite of the facts that this labor activist is admitting.

    He says that Apple does far more to police these places than the other tech companies and admit the problems that they have uncovered — something that HP and Dell don’t do.

    He also points out that Foxconn is the best of all the factories they’ve monitored. Not too surprising. China makes everything for the US market from socks to appliances to computers. And clearly the profit and labor conditions at the typical sock factory are going to be worse than at a place that makes high end computers. That may be why Foxconn has to turn away so many workers who apply for jobs there.

    But the Times and China Labor Watch know they will get better PR by focusing on Apple than by exposing the really bad offenders. It’s a manipulative approach and one they should be ashamed of. But even the media and labor activists like to manipulate the facts if it serves their purposes.

    The sad thing is that this approach will mean that the workers at apparel and appliance factories end up not seeing any improvements in their lives. The Times and Labor Watch want to focus on Apple and so fashion companies — places that are true “sweat shops” — are off the hook. The Times wants to make a statement about the company that is actually doing the most to police their suppliers.

  8. Hank Says:

    “Although we think Apple is among the best in terms of auditing, we still think that Apple can do more because it is the most profitable company in the world…”

    That’s right, go where the money is. It really makes no difference how much Apple does because it will never be enough. Apple has the most success yet is the most active in trying to protect workers. Clear justification to single out Apple for criticism. “Other firms” have significantly worse conditions but since their profit margins are low they get a free pass.

    Imagine, workers slaving away for poor pay under unsafe conditions. And where is this happening? The PEOPLE’s Republic of China. A country ruled by the Communist Party of China–allegedly a WORKERS’ party founded on the principles of Karl Marx and Friedrich Engels. The workers’ paradise. And where is this WORKERS’s party, this PEOPLE’s government in all this? From the many articles, blogs and podcasts on the issue, one would get the impression that the primary evildoer is big, bad Apple (usually written with the throw-away phrase, “…and other firms”). Little mention is made of the Chinese Government. Almost none. Why? Because Apple is an easier target than the Communist Party of China or the National People’s Congress. Apple is an easier target because it will at least try even if it cannot succeed. Apple is an easier target because it has the most money.

    I find it sad, even tragic, that those who profess to support the human rights of Chinese workers, don’t call out the Communist Chinese Government for its hypocrisy. Don’t those people then share that hypocrisy? Are they really interested in helping workers or is it a matter of “Apple” bringing more hits their website?

    Upton Sinclair’s “The Jungle” uncovered the dark side of the meat packing industry in America but the conditions weren’t changed by firms like Hormel or Oscar Meyer. Conditions changed when the Federal government was driven by people to act.

  9. Steven Says:

    “All of this is not to say Foxconn, which manufactures products for Apple, HP, Dell, and many other OEMs, is a pleasant place to work. ”

    You know, I don’t consider the place where I work “pleasant” either, but I choose to work there. With the exception of child labor practices, a grown adult chooses to work where he or she works. If it is not a “pleasant” enough place, he or she can leave.

    I do believe that U.S. companies have a responsibility when it comes to making sure working conditions are safe at its overseas suppliers. But local demand for and supply of labor will always determine level of pay and hours worked. We are not obligated to provide everyone in every manufacturing locality in Asia with a Western standard of living.

  10. George Says:

    Finally, the core of the issue is coming into focus.
    All of this fuss is about extorting Apple out of cash in exchange for a stop to the media hit pieces.
    Apple should “buy” some “help” from these shady characters to make all the tarring and feathering in the press go away.

    How about this, China Labor Watch: take a hike!
    Apple clearly doesn’t need any “help” from you because the factories where their products are manufactured already offer the best conditions.

    Apple does better than their competitors because they are more competent at designing, manufacturing and marketing their products and as such they deserve the resulting mountain of cash to themselves no matter how many drooling low-lifes it attracts.

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