Every year Apple hires private inspectors to perform an independent audit of its vast network of global suppliers.  These inspectors scour the partners for signs of labor abuses.  That's a bit unusual in the corporate world that usually casts a blind eye to such things.  What is more unusual is that Apple publishes the report airing its "dirty laundry", so to speak, for all to see.

Like the last couple years, this year's report [PDF] wasn't all roses.  The report found abuses at many of the 127 plants worldwide that make Apple products.

One of the biggest problem areas was child labor.  By law in China children cannot work until they turn 16.  But Apple found that 91 children were working at 10 of its suppliers' Chinese plants.  In one case Apple discovered that a plant had cooperated with a vocational school to fake documents for 42 children to work.  Apple terminated its relationship with that factory.

Another major problem was unsafe working conditions.  In one case, workers at a Wintek plant were using the toxic industrial solvent n-hexane in an assembly and cleaning process.  The company had allowed the building's ventilation system to fall into disrepair and vapors from the organic solvent poisoned dozens of workers.  Apple has demanded the plant fix the ventilation system and stop using the n-hexane.

Other problems discovered include excess working hours and workers being shorted overtime pay.  Also suppliers overcharged migrant worker employment agencies in Southeast Asia $3.4M USD.  Apple is forcing them to repay this sum.

Interestingly, Apple praised embattled supplier Foxconn for its steps it took to prevent more deaths following a spate of suicides early last year.  Foxconn, which employs 920,000 people in China, responded by raising pay rates and installing "anti-jumper" nets on high buildings in its factory towns.  Apple says these measures "definitely saved lives", though it adds, "We were disturbed and deeply saddened to learn that factory workers were taking their own lives."

Despite Apple's unusual openness about its labor problems and its apparent attempts to fix them, it often is criticized as one of the electronics industry's most destructive players in terms of labor and environmental abuses.

The key reason for this is Apple's demand for utmost performance and quality at the lowest cost.  Apple maintains huge margins on its high-end gadgets and it is ruthless in its negotiations to obtain lower prices, dropping suppliers if they can't keep up.

As a result some manufacturers are looking to cut corners in various ways.  For example Wintek used n-hexane at its factory in Suzhou, near Shanghai, because the compound cleaned device screens better than alcohol, leading to lower defect rates.  Wintek never told Apple about the switch, hoping it would give it a secret edge over contract competitors.  The plan obviously backfired.

Chinese environmentalist Ma Jun, of the Center for Public and the Environment, has helped various activists in China to compile a rival report entitled "The Other Side of Apple" [PDF].  The report blasts Apple's quality and price demands, accusing the company of setting up an environment conducive for abuse.

The report surveyed multiple companies and found that Apple was the worst at dodging requests by environmental advocates for investigations, despite its yearly internal study.  Mr. Jun told the San Francisco Chronicle, "We originally thought that Apple, as a corporate citizen, would take a leadership role, but now we feel they ended up as the most obstructive."