Date of publication: March 1, 2010
Source: Wall Street Journal
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By Andrew Morse and Nick Wingfield
Apple Inc. said audits of its suppliers uncovered 17 core violations of its policies, including three cases in which its contractors hired underage workers last year.
The Cupertino, Calif., company, in a report posted to its Web site, said three facilities had hired a total of 11 employees prior to reaching the legal working age in those countries. Some of the workers were as young as 15 years old, Apple said. At the time of the audit, the workers were either no longer underage or employed by the contractors. Apple didn't name the suppliers or identify in which countries the infractions of its policies occurred.
The document summarizes the results of on-site audits of 102 facilities and says roughly 133,000 workers, supervisors and managers have been trained as part of its program. This is the fourth year Apple has audited the work practices of its suppliers, a practice that started in 2006 after reports of worker abuses at Hon Hai Precision Industry Co.'s Foxconn, a Chinese manufacturer that assembled iPods for Apple.
Like most hardware makers, Apple depends heavily on manufacturing partners in Asia to build its products, but hit items such as the iPhone and Apple's penchant for secrecy have increased scrutiny of facilities connected with Apple.
Apple is significantly increasing its own presence in China too. At the company's shareholder meeting last week, Apple executives said the company plans to open as many as 25 Apple retail stores in China in the near future. It currently has one Apple store in the country.
Apple spokesman Steve Dowling said the company audited its supplier facilities to "make sure they comply with Apple's strict standards" and that the company also created "extensive training programs to educate workers about their right to a safe and respectful work environment."
The company said the audits included annual reviews of final-assembly manufacturers, first-time audits of component and nonproduction suppliers and 15 repeat audits of facilities at which a core violation had been discovered. "A core violation is the most serious class of violation," Apple said in the report. "It refers to any practice or situation that we consider to be contrary to the core principles underlying Apple's Supplier Code of Conduct—and to require immediate corrective actions."
The company said core violations include abuse, underage employment, involuntary labor, falsification of audit materials, threats to worker safety, intimidation or retaliation against workers in the audit and serious threats to the environment. Apple said it requires facilities it has found to have a core violation to address the situation immediately and institute a system that ensures compliance. The facility is also put on probation and later re-audited.
In addition to the underage employment violations, Apple said it found eight cases where excessive recruitment fees were paid, three violations involving hazardous-waste disposal and three involving falsified records. Apple said its audits have resulted in foreign workers being reimbursed $2.2 million in overcharges for recruitment fees.