Apple for the day

Charles Duhigg and Nick Wingfield have an article in The New York Times about the problems that Apple is having in China:

Responding to a growing outcry over conditions at its overseas factories, Apple said that an outside organization had begun to audit working conditions at the plants where the bulk of iPhones, iPads, and other Apple products are built, and that the group would make its finding public.
For years, Apple has resisted calls for independent scrutiny of the suppliers that make its electronics. But for the first time it has begun publicly divulging information that it once considered secret, after criticism that included coordinated protests last week at Apple stores around the world and investigative news reports about punishing conditions inside some factories.
Last month, Apple released the names of 156 of its suppliers. Two weeks later, Apple’s chief executive sent an email to the company’s 65,000 employees defending Apple’s manufacturing record while also pledging to go “deeper into the supply chain”. And now, the company has asked an outside group— a nonprofit financed partly by participating companies like Apple— to publicly identify specific factories where abuses are discovered.
Corporate analysts say Apple’s shifts could incite widespread changes throughout the electronics industry, since a lot of companies use the same suppliers. They also said it seemed calculated to forestall the kind of public relations problems over labor issues that in previous decades afflicted companies like Nike, Gap, and Disney. “This is a really big deal,” said Sasha Lezhnev at the Enough Project, a group focused on corporate accountability. “The whole industry has to follow whatever Apple does.”
But it is unclear if the efforts by Apple, whose $469 billion market value is the largest of any company in the world, will be enough to quiet its critics, some of whom had urged Apple to work with Chinese monitoring organizations with direct knowledge of its suppliers in China.
Though some labor groups applauded the announcement, others said that the outside auditor Apple chose, the Fair Labor Association, which is based in Washington, was not sufficiently independent. And some critics questioned whether the inspections— Apple said the manufacturers had agreed to do them voluntarily— would sharply curtail problems or merely help Apple deflect criticism. “The Fair Labor Association is part of a corporate social responsibility industry that’s totally compromised,” said Judy Gearhart, executive director of the International Labor Rights Forum, an advocacy group for workers. “The auditing has been proven to be weak, and real solutions need a lot more than auditing. It takes empowering workers.”
Apple, in a statement, said that the Fair Labor Association was an independent organization that had been given “unrestricted access” to the company’s suppliers. The first inspections, Apple said, were conducted at a factory in Shenzhen, China, known as Foxconn City (photo), one of the largest plants within China. Human rights advocates have long said that Foxconn City’s 230,000 employees are subjected to long hours, coerced overtime, and harsh working conditions, all of which Foxconn disputes.
Apple has said that, if the companies manufacturing its products do not measure up to its labor and human rights standards, it will stop working with them.
“We have a very credible, independent monitoring system,” said Jorge Perez-Lopez, executive director of the Fair Labor Association. “Yes, Nike is on our board. So are other companies. But so are universities. And our reports are written by staff, without consultation or influence.”
Since 2007, Apple has released yearly audit reports of its own detailing labor violations and unsafe conditions at its suppliers. More than half of the facilities audited by Apple every year had violated at least one aspect of the company’s supplier code of conduct, and in some instances violated the law.
Auditors have found instances of excessive overtime, underage workers, improperly disposed hazardous waste, and falsified records, according to the company’s reports. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Last year, two explosions at iPad factories killed four people and injured 77.
Because Apple’s public disclosures of problems do not identify the suppliers by name, it is difficult to determine where specific abuses happened. It is also tough to determine if conditions improved after Apple demanded changes, as the company says. The company has disclosed little about its manufacturing process over all, at least partly because it does not want to tip off competitors.
For instance, Chinese advocacy groups— which are often considered reliable, independent monitors— have published multiple reports saying that Foxconn employees regularly work more than 12 hours a day, seven days a week, a violation of both Chinese law and Apple’s code of conduct. Apple has audited Foxconn City multiple times and Foxconn, in a statement sent to The Times, said it had never been cited by Apple for overworked employees.
If the Fair Labor Association conducts wide-ranging audits and publishes data on specific facilities, it could transform the attention brought to the worst performers, and in the example of Foxconn City, help determine whether Foxconn, or the advocacy groups, have been telling the truth.
“The problem with the Fair Labor Association is that it lives by rules set up by the companies itself,” said Lezhnev of the Enough Project. “Real transparency will transform the electronics industry. But if it’s just a whitewash, I’m not sure how much will change.”
Apple, in its statement, said the Fair Labor Association’s findings and recommendations from its first inspections would most likely be posted online in early March on the group’s website.
At Apple’s request, the group will also conduct audits of Apple’s other main assembly factories, including Foxconn’s plant in Chengdu and facilities run by Quanta and Pegatron, where the bulk of iPhones, iPads, and other devices are made. Those and other plants also build goods for almost every other major electronics company, including Dell, Hewlett-Packard, IBM, Lenovo, Motorola, Nokia, Sony, Toshiba, and others.
While other companies have been criticized for conditions at their operations overseas, Apple has received particular attention because it is the biggest (its market value is more than the combined value of Google and Microsoft) and among the richest. Its stock closed recently at $502.60, up more than twenty percent this year. The company also has a vast overseas presence, with its contractors employing seven hundred thousand people in China and elsewhere.
Apple said that its suppliers had pledged to give the auditors unrestricted access to their operations during the inspections. Apple said the organization would “interview thousands of employees about working and living conditions including health and safety, compensation, working hours and communication with management.” It will also inspect manufacturing areas, worker dormitories and other facilities, the company said.
“We believe that workers everywhere have the right to a safe and fair work environment, which is why we’ve asked the Fair Labor Association to independently assess the performance of our largest suppliers,” Timothy D. Cook, Apple’s chief executive, said in a statement. “The inspections now under way are unprecedented in the electronics industry, both in scale and scope, and we appreciate the Fair Labor Association agreeing to take the unusual step of identifying the factories in their reports.”
In January, Apple announced it would be the first technology company to join the Fair Labor Association. The organization was founded in 1999, and evolved out a task force created by President Bill Clinton and a handful of apparel and footwear companies, including Nike, to combat child labor and other abusive working conditions.
When completed, Apple said, the association’s inspections will have covered factories where more than ninety percent of Apple’s products are assembled.

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