Ethical Performance
inside intelligence for responsible business


Foxconn factory first in Apple’s supplier labour practices review

March 2012

Apple has bowed to pressure over alleged labour abuses in its factories and taken one of the most significant CSR steps in its chequered history on the issue by appointing an NGO to inspect all its suppliers, beginning with the infamous Foxconn plant.

The company, which has still to produce a CSR report, says it has given the Fair Labor Association (FLA) ‘unrestricted access’ to its suppliers worldwide, and insists it will break links with manufacturers found operating below standard.

The FLA will ask thousands of staff about working conditions, compensation, hours and communication with management, and will inspect factory floors, living areas and other facilities.

Investigations have already begun into Foxconn, where more deaths have been reported in recent months after the 2010 spate of suicides (EP13, issue 5, p12).

The 230,000 employees have long been reported, most recently by Chinese NGOs, to be subjected to long hours, forced relocations, harsh working conditions and other labour rights violations.

Apple’s decision is likely to have a huge impact on the electronics sector. Apple is not only the industry’s market leader but also the world’s biggest company, and its suppliers make products for many smaller businesses.

Foxconn alone, for example, supplies companies including Acer, Amazon, Dell, Hewlett-Packard, IBM, Microsoft, Motorola, Nokia, Samsung, Sony and Toshiba. The entire electronics industry, therefore, will probably be forced to follow Apple’s lead.

The company says its 156 suppliers cover 97% of its purchases, though secondary suppliers that provide parts to businesses directly under Apple contracts are not listed.

The FLA’s task is huge, especially as Apple is apparently taking a totally hands-off approach, not even specifying where many of the factories are. The FLA monitored only 190 factories altogether in 2010.

Judy Gearhart, executive director of the International Labor Rights Forum campaign group, said: “It’s a bit of a half-step really to say, ‘Here are the names of the factories, go look through a haystack.’ But it’s a start.”

Apple appears keen to emphasise the independence of the project. It has produced an annual Supplier Responsibility Progress report since 2006, but says the new project is ‘unprecedented in the electronics industry’. The FLA’s initial findings will be made public on Apple’s website this time next year, with recommendations.

Worryingly, the NGO – thanks to its new affiliation with Apple, which joined the FLA in January – seems to have tarnished its own image already, and serious questions have been cast on its autonomy for the first time since its founding in 1999.

The FLA is partly funded and directed by participating companies, including Apple, and this has attracted increasing attention in the light of Apple’s supposedly ‘independent’ audit.

The Worker Rights Consortium, a US-based factory monitoring group, said: “The FLA does some good work, but we don’t think it’s appropriate for them to call themselves independent investigators because they’re in part funded by companies. Independent monitoring means you’re generally independent of the companies.”

The FLA responded: “We have a very credible, independent monitoring system. Yes, Nike is on our board. So are other companies. But so are universities. And our reports are written by staff, without consultation or influence.”

Describing the move as a “Nike moment”, Inaes Kaempfer, of the FLA, said: “There was a moment for Nike in the ’90s, when they got a lot of publicity, negative publicity. And they weren’t the worst. It’s probably like Apple.

“They’re not necessarily the worst, it’s just that the publicity is starting to build up. And there was this moment when they just started to do something about it. And I think that’s what happened for Apple.”

Apple | Global | Supply Chain Management


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