Report Alleges Labor Violations at Apple Supplier

U.S.-based workers-rights group China Labor Watch published a report on Monday alleging numerous labor violations at three factories owned by Pegatron Group, a major supplier to Apple:

CLW’s investigations revealed at least 86 violations, including 36 legal violations and 50 ethical violations. The violations fall into 15 categories: dispatch labor abuse, hiring discrimination, women’s rights violations, underage labor, contract violations, insufficient worker training, excessive working hours, insufficient wages, poor working conditions, poor living conditions, difficulty in taking leave, labor health and safety concerns, ineffective grievance channels, abuse by management, and environmental pollution.

In short, the Pegatron factories are violating a great number of international and Chinese laws and standards as well as the standards of ’s own social responsibility code of conduct. [Source]

CLW sent undercover investigators to the three factories and conducted nearly 200 interviews with workers from March to July of this year. In a press release on Monday, CLW urged Apple to remedy a number of broken promises in the realm of social responsibility, including those related to worker safety and the environment. In a statement responding to the allegations, Apple said that it would send audit teams to the three factories in question and investigate the claims in the report. From The Wall Street Journal:

We have been in close contact with China Labor Watch for several months, investigating issues they’ve raised and sharing our findings. When they first told us that workers’ ID cards were being withheld, an auditor from our Supplier Responsibility program was on site the next day to investigate. We confirmed that labor brokers for Pegatron were holding a small number of IDs as they helped set up bank accounts for those employees. We demanded Pegatron put a stop to this practice and a new system was in place within a week.

Their latest report contains claims that are new to us and we will investigate them immediately. Our audit teams will return to Pegatron, RiTeng and AVY for special inspections this week. If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full.

Our audits involve a thorough review of timecards and other documents to guard against falsification. We will investigate these new claims thoroughly, ensure that corrective actions are taken where needed and report any violations of our code of conduct. We will not tolerate deviations from our code.

Apple believes in transparency and accountability, both for our suppliers and ourselves. We realize being a leader in workers rights and being transparent with our findings opens us to criticism, but we believe strongly that we can make a big difference in the lives of millions of people by doing so and this provides us the courage and resilience to continue the journey. We are proud of the work we do with our suppliers to uncover problems and improve conditions for workers. By vigorously enforcing our supplier code of conduct, we ensure that our suppliers follow the same principles and values we hold true. [Source]

Pegatron has come under heightened scrutiny as it has expanded this year amid a surge in iPhone and iPad orders, according to The Wall Street Journal:

With factories in western China drawing workers from the coast, Pegatron has had to rely largely on third-party recruiting firms to find the tens of thousands of new workers it needs at its Shanghai campus for iPad and iPhone production, say managers at the company.

Recruitment firms, which are paid for each worker they refer, often take part of a worker’s pay if the employee fails to work a fixed period and also sometimes fails to provide legally mandated insurance that Pegatron says it is paying the recruiters to provide, according to labor groups.

One worker from Henan province surnamed Zhu said she was hired through an intermediary recruiting company, and has now found that she has to work for three months to avoid fines from the recruiter. Ms. Zhu, who works on an iPhone assembly line, said she plans to leave the factory after three months. “They don’t tell you everything,” she said. [Source]

July 29, 2013, 11:26 AM
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