Is it possible to run an ethical supply chain? After the publication on 29 March 2012 of the first independent audit of the factories Apple uses in China, the iconic consumer electronics giant has definitely become the test case for whether multinationals can put an end to labour abuses.
According to the long-awaited report, which is considered one of the most detailed audits of a Chinese manufacturer to date, there were at least 50 serious and pressing non-compliances with Chinese law and Apple’s code of conduct, including excessive overtime and other health and safety violations.
Apple had asked the Fair Labour Association (FLA), a non-government organisation, to conduct the audit following a burst of bad publicity over reports of workers being abused, particularly at factories in China operated by Hon Hai, known as Foxconn, the world’s biggest contract manufacturer. The FLA visited Foxconn factories in Shenzhen and Chengdu, and surveyed some 35 000 workers at three facilities where Apple products, including iPhones and iPads, are assembled.
At all three, during the past 12 months workers on average exceeded the limit of 60 hours of work a week stipulated in Apple’s code of conduct. Many also worked more than 36 hours overtime a month, China’s legal limit. Nearly half of workers surveyed said that they had had an accident or seen one. On the other hand, no workers appear to have been under age (in contrast with a recent internal audit by Apple), and the FLA says that conditions were “no worse than any other factory in China”.
Apple and its CEO, Tim Cook — pictured, talking to employees during his visit of the iPhone production line at the newly built Foxconn Zhengzhou Technology Park, Henan province, on 28 March — to their credit welcomed the report and agreed to support its recommendations. “We think empowering workers and helping them understand their rights is essential,” the company said in a statement. And it claimed that is has been working quietly on these issues for years, albeit clearly with only mixed results.
Foxconn has told the FLA that it will reduce working hours to legal limits by July 2013, which is a start. The FLA says this will require Foxconn to recruit tens of thousands of extra workers.
Compliance will not be easy as long as Apple’s business model remains unchanged. The evidence from other big consumer brands suggest that most abuses of workers — particularly when it comes to overtime — occur when a factory is under pressure to meet a sudden surge in demand, often around product launches. The same appears to be true of Apple, judging by comments made by Auret van Heerden, FLA’s chief executive. Working hours, he said at the presentation of the audit, were being “blown out” during peak periods like device launches and the holidays.
The big question is: can Apple find a way to reengineer its product cycle in such a way that it does not put the factories it uses under excessive strain next time it launches a new iPhone or iPad? — (c) 2012 The Economist