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Apple found that 3 of its 102 parts and manufacturing partners used child labor to help build the company's best-selling iPods, iPhones, and Macs.  (Source: Apple)

The report's brutal honesty is sure to draw criticism of Apple, but it's important to remember that Apple is demanding its suppliers make changes and is one of the few in the industry not to cast a blind eye to human rights violations.  (Source: China Smack)
Company is seeking to correct abusive suppliers

Apple last week aired its annual evaluation of its supplier's compliance with its supplier standards program.  The program is designed to discourage practices like child labor and substandard living and working conditions among the company's suppliers worldwide.  The company employs independent investigative firms like Verité, to investigate it suppliers.

The new report found major violations at many suppliers, including the use of child labor.

The report describes, "Apple discovered three facilities that had previously hired 15-year-old workers in countries where the minimum age for employment is 16.  Across the three facilities, our auditors found records of 11 workers who had been hired prior to reaching the legal age, although the workers were no longer underage or no longer in active employment at the time of our audit.  One facility attempted to conceal evidence of historical cases of underage labor.  Two other facilities presented falsified records that concealed evidence of violations of Apple's Code regarding working hours and days of rest."

Many suspect that at least one of the plants belonged to Foxconn, one of Apple's biggest suppliers, who already is in a lot of trouble for the suspicious death of an employee who lost and iPhone prototype and for beating a foreign correspondent who was trying to do a news story on Apple. 

Many will be quick to attack Apple for its admission that child labor was found to be used to build the company's iPods, iPhones, and Macs at three of its 102 plants worldwide.  It's important to bear in mind, though, that most companies who contract suppliers in China or other developing nations merely turn a blind eye to rights violations.  Apple is one of the few who actually looks into its working conditions and as a result of its openness is perhaps unduly receiving negative public perception.

Aside from child labor, there were a wealth of other violations.  Apple says it "found records that indicated workers had exceeded weekly work-hour limits more than 50 percent of the time. Similarly, at 65 facilities, more than half of the records we reviewed indicated that workers had worked more than six consecutive days at least once per month."

At least one of the suppliers involved had been found guilty of violations in 2008 as well.  Apple reports that it has severed its relationship with the firm.  Writes Apple, "When Apple investigated further, we uncovered additional records and conducted worker interviews that revealed excessive working hours and seven days of continuous work. When confronted with this information, the facility provided Apple with accurate timecards. Based on the repeat core violation and inadequate actions, Apple is terminating all business with this facility."

Another common violation was underpaying workers.  Apple reports, "At 48 of the facilities audited, we found that overtime wages had been calculated improperly, resulting in underpayment of overtime wages.  At 24 facilities, our auditors found that workers had been paid less than minimum wage for regular working hours."

The audited plants were in China, Taiwan, Thailand, Malaysia, Singapore, South Korea, the Czech Republic, Philippines and the U.S., though Apple did not reveal exact locations or the name of the suppliers. 

The full report, Supplier Responsibility, is available here (PDF).

One can only hope that people view Apple's honest evaluation of its own supply chain's shortcomings in a positive light -- otherwise other firms will have little incentive to similarly monitor their own supply chains for abuse.

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Cool your jets guys
By postalbob on 3/3/2010 4:33:28 PM , Rating: 1
Correct me if I'm wrong:

This article stated that Apple has a system in which they check in on their manufacturers to ensure there is no child labor.

Apple's own system found that there was child labor. They weren't busted. You can't bust yourself.

My father's engineering company as an example, (as most engineering product companies do), uses manufacturers from other countries. It has nothing to do with selecting "child labor". Those manufacturing companies are seldom or rather never required to report their employee age/race/ethnicity.

Apple is not the enemy in this, in fact they performed admirably by having a system in place to check into it. This shows action, not lack thereof, in comparison to most companies which show none. I'm all for mocking the big bad corporations as much as the next guy, but at least have merit when you do rather than mouth off like a drone. Most of the time corporations help people.

Also: In most these countries allowing the kid to make money benefits them. This isn't slave labor.

It boggles my mind that no matter what the post on DT a horde of people mouth off about the woes of mankind and life. Half of you making comments about child labor in this case, if you were working a family farm before industrialization would have filed for abuse, and it's rather pathetic. Those types get "paid" nothing. Just food in their belly and a roof over their head. *rolls eyes* I guess we better get a time machine and tell them they were being "abused".

Had to comment on this one...

RE: Cool your jets guys
By RyanHirst on 3/4/2010 1:54:54 PM , Rating: 2
I agree, overall. I'll go a step farther, at the risk of going on at length. It doesn't bother me that people are upset, heated about the woes of mankind. What I find unconscionable are the fallacious and, ultimately, useless arguments.
Statements like, "I can't believe you're so naive as to think big companies don't do this all the time", and cynical prophesies have, literally, nothing to do with big companies, or the person accused of naivete. Belief in justice is not naive; it is a way in which we address the state of injustice. Believing that injustice can be fought requires identifying it, fighting against it, a knowledge of the systems for redress, and fighting for that redress. A cynical aside about naivete requires none of these things. If the first poster really believes that child labor is wrong, and that big corporations violate human rights all the time, and that it's so difficult to fight that, without informing ourselves of the means, we don't see how it's possible... then the only moral choice is to inform him/herself of the means and advocate them. Calling others naive and walking away is the naive position. And saying it can't be fought is a false generalization. He's saying HE won't fight it. That's a choice. That choice does not generalize to others. Child labor has been fought in the past, WITHOUT the example of its absence. It can be fought now.

Apple has made a crucial choice. I believe that if the cynical posters knew anything about doing business in China, they would read Apple's actions as an extremely well-informed and workable strategy against illegal business practice, tailored to the exact quandry that China presents to the foreign employer. Let me explain.

Let's say you're an American company and you've already built a factory in China. China prints a staggering percent of books for US sale, so let's say you own a small factory with a modern printing press.
The appeal of China is this: what you want done, gets done. Let's say your first print run finishes, and you realize at the last minute some pages are out of order. If you ask the manager if there's any way to reprint the whole run with the new chapter you just sent via .pdf, all within the planned budget, and within 48 hours, do you know what the manager will say?


This is the beauty of doing business in China. Everything is possible. You need only ask.

Now, if you're paying 50% higher wages than the prevailing wage in your market sector, guaranteeing overtime, guaranteeing payment of wages (as opposed to wages-as-housing and other semi-legitimate "payment" schemes), and you have a long list of company policies governing acceptable practices for scheduling, payment, work conditions, acquisition of materials, cost of goods, etc.... if you do these things, and you are not VERY careful, you will BELIEVE that these policies are being followed.
If you ask, the answer will be yes. Contractors will go out of their way to let you believe that you are running the perfect business. You make a request, and it's done. The technical expertise materializes on the spot, dedicated professionals bend to the task, work long hours and get paid for them... participate in the financial payoff. Exactly how you feel about your coding nerd friends talking about putting 60-80 hour weeks in before a product launch they were excited about... that's the environment you can believe your American Dollars are buying in China.

And, hey, maybe they are. The crux is, if you ask, the answer is yes. Was the last-minute ink supplier legit? yes. Did the workers get paid overtime? yes. Were the schedules acceptable? yes. we are still on budget? yes.


And here is, again, the devastating beauty of business in China. A moral person MUST be devastated. The chances that it is all true are slim. If you ask, someone has to lie to you, so best not to ask. You won't know either way how the project got done, so the least you can do is not make the contractor fabricate records. Right?


Finding a way out isn't easy. And this is why what Apple is doing is exceptional. It's not that they're instituting oversight, it's the manner. The structure of their oversight, and its use in the press, is tailored to this dilemma. It reflects a desire not only to protect themselves, but to determine the REAL cost of legitimate operation in China, and to advertise their contracting dollars to those willing to meet it.

What does this mean if you're a contractor in China? Apple has just terminated some contracts. Those contracts are now open. They were terminated, not because COST was too high, not because e.g. overtime hours were used (and therefore either costing Apple more money, or embarassing them when a third party found out)... but because they weren't PAID. Whatever their oversight procedure, it's good enough that current employees will tell the truth (this is huge). In the event of a disagreement or scandal, rather than leverage the contractor, Apple will voluntarily disparage their own name, and protect the contractor (this is also huge).
Conclusion: Apple is making a legitimate bid for legitimate labor and materials, and wants to know the actual cost.

Oh, yeah, and they're an international icon sitting on $40 billion in cash.

If you're a contractor in China and you haven't figured out that to bid for an Apple you HAVE to buy everything legitimately, pay everyone their hours, and that Apple is prepared to PAY the higher cost of the bid to guarantee those things, you're an idiot. And, in case we forgot since last paragraph, Apple is sitting on $40 billion in cash. You want that contract.

I'm sorry to poke at the cynical bubble, but it is moves like this that can directly impact labor and business practices. Even if you don't believe it will affect anyone but Apple and its contractors, if you responded dismissively to this headline, I beg you to think carefully about what, exactly, you want done about shifty corporate ethics and world labor practices. I would certainly be embarrassed if I was too busy sneering at someone to see that they were angry about the same things, and doing something about it.

My thanks to anyone crazy enough to read all of that. Rant over.

"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain

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