Broken Promises and Continuing Worker Abuses as Apple and its Suppliers Miss Deadline
On February 13, 2012, Apple announced that it would be relying on inspections by the Fair Labor Association as a path to ending labor rights abuses in its supply chain, leading to front page coverage in the New York Times. Six weeks later the FLA released a report documenting a range of serious labor rights violations at three Foxconn factories making Apple products, most of them previously reported by independent investigators whose findings Apple had largely ignored. Apple, Foxconn and the FLA pledged that these violations would be addressed through reforms to be implemented by July 2013.
That deadline has now passed, strangely unremarked upon by Apple and its chosen labor rights monitor, and Apple has not made good on its commitments. It is clear from interim verification reports by the FLA and from independent assessments that progress in Apple’s supply chain has fallen far short of the sweeping change promised early last year, particularly in the areas of unpaid compensation, inadequate wages, illegal overtime, violations of workers’ rights to freedom of association, and the scope of the reform efforts within Apple’s full (and massive) supply chain. The FLA’s August 2012 and May 2013 interim reports claimed great strides, but included concrete findings that often belied this positive spin (as we discussed here and here).
The FLA reports helped obscure a number of disturbing realities.
Apple and its suppliers have not implemented promised pay reforms for low-wage workers, even as Apple has amassed nearly $50 billion more in profits.
The 15-month period between the FLA’s initial report in March 2012 and the July 1, 2013 deadline for reforms to be completed coincided with Apple’s last five financial quarters, in which its profits totaled $47 billion. A modest fraction of those profits—and an even smaller fraction of its $147 billion cash reserve—would have been sufficient to fund every corrective action pledged by Apple and the FLA. Instead, Apple failed to fulfill the following promises:
- A promise to provide retroactive compensation to hundreds of thousands of workers who were paid nothing for some of the overtime hours they worked. No such compensation has been reported and the FLA has indicated that it will not be paid.
- A promise that wages would be increased enough to offset planned reductions in work hours, thus ensuring no loss of income for workers. While wages have increased somewhat at Foxconn factories, largely coinciding with hikes in the legal minimum wage, there is no evidence to indicate action by Foxconn to raise pay sufficiently to protect workers’ net income and the FLA has been silent on this issue since its initial report in March 2012.
- A promise to conduct research to determine how much workers need to be paid to meet their basic needs. The FLA carried out a worker opinion survey in which nearly two-thirds of Foxconn employees reported that their wages did not meet their basic needs. Since the FLA code of conduct, which Apple is supposed to follow, requires payment of a “living wage,” the FLA announced that it would conduct a study to determine the proper wage level of Apple workers in China. The study has apparently not been carried out.
The workers in Apple’s supply chain in China still work overtime hours in violation of Chinese labor law.
Apple pledged, through the FLA, that it would put an end to illegal overtime in its production system in China by July 1, 2013. Apple’s code, like the FLA code, requires compliance with local law. However, the FLA has consistently reported that, despite some reductions in hours, Foxconn employees still work hours well in excess of legal limits (roughly 49 hours per week in China)—whose purpose, it must be noted, is to protect workers from the physical and psychological consequences of excessive hours of grinding manual labor. The July 1, 2013 date has now passed without any claim that Foxconn has stopped breaking Chinese overtime law and it is virtually certain such violations continue on a significant scale at the three Foxconn factories covered by the FLA’s original report, and at other Chinese factories supplying Apple.
The promised “genuine voice for workers” has not been established.
One of the feature commitments the FLA said it secured from Apple and Foxconn in March 2012 was to “establish a genuine voice for workers,” i.e., to create mechanisms through which workers would have genuine collective representation in the workplace and the ability to influence labor practices—as required by the FLA code of conduct and international standards. Since then, the FLA has claimed progress, but the “reforms” it has reported are so weak as to belie those claims. For instance, the FLA’s most recent verification report touted an increase in the number of workers, as opposed to managers, in the leadership of factory-level unions. According to the FLA, worker representation increased from a range of zero to 10 percent in the three Foxconn factories in June 2012 to 29.5 to 41 percent in January 2013. The FLA, however, ignores the central point: in all of these facilities, the majority of the union leadership is still composed of factory managers, thus ensuring that the union that is supposed to represent workers and press managers for better wages and conditions is controlled by those same managers. Moreover, the FLA does not assess the actual influence of these committees; even if the majority of the members of these committees are eventually workers, standard practice in China suggests it is far from clear that will they have any significant voice when it comes to decisions made at these factories. An analysis by SACOM raises plausible concerns that sham unions may be the outcome even if workers eventually lead the committees.
Contrary to what Apple indicated, the FLA process has covered fewer than one-fifth of the workers in Apple’s supply chain. Other information suggests severe labor rights abuses continue throughout Apple’s supply chain.
Apple’s February 2012 announcement stated “Similar inspections [to those of Foxconn] will be conducted at Quanta and Pegatron factories later this Spring, and when completed, the FLA’s assessment will cover facilities where more than 90 percent of Apple products are assembled.” Yet the FLA has only presented information on three Foxconn facilities, now employing 178,000 workers, fewer than one-fifth of the more than one million workers Apple says are in its supply chain. No reports have been issued by the FLA on Quanta, Pegatron or any other Apple production facility. Moreover, it is clear from independent reports that serious labor rights violations are rampant in other Foxconn factories and throughout Apple’s supply chain (a reality also revealed, in significant respects, by Apple’s own annual “supplier responsibility” report). For example, China Labor Watch released a report in July 2013 on Pegatron, Apple’s second largest supplier. It found that Pegatron violates 17 specific commitments made by Apple in its code of conduct, ranging from widespread hiring discrimination, to the significant misuse of underage workers and pregnant women, to forced and uncompensated overtime.
It has been 17 months since the FLA released its findings on the egregious workplace violations at Apple’s leading suppliers, and seven years since Apple first pledged to address labor rights abuses such as excessive overtime that independent researchers had found in its supply chain in China. Apple has had more than enough time to clean up these abuses. The highly-touted FLA process, announced by Apple in early 2012, bought the company a stay from criticism, as many in the media gave respectful coverage to Apple’s reform pledges. However, the aggressive communications push around the launch of the FLA remediation program also defined, very concretely and very publicly, the progress Apple would have to achieve by its self-imposed deadline in order to prove the sincerity of those pledges. Now, the deadline has passed. The pledges have not been fulfilled. The time to temper criticism, if such was ever appropriate, is now over.
For more information on the working conditions in Apple’s supply chain see AppleLabor.com.