Fair Labor Association report leaves big questions about change at Apple/Foxconn

The Fair Labor Association (FLA), Apple’s auditor for its labor rights problems in China, issued a report last week that received widespread praise, including in the New York Times, whose reporting about workplace deaths, employee suicides and grueling overtime forced Apple to conduct the audit in the first place. This is not the first time Apple has commissioned such an audit, and it’s not the first time the auditor found serious problems.

In 2006, after British newspapers wrote about labor standards violations at Apple’s suppliers, Apple said an audit of a Foxconn facility revealed that more than a third of its employees worked more than the 60 hours-per-week limit imposed by Apple’s code of conduct. According to CorpWatch, Apple admitted that about 25 percent of the time, employees worked more than six days straight without a day off.

Apple vowed to clean up the violations it found and hired an outside consultant, Verite, to conduct ongoing audits of all of the factories where Apple’s products are assembled.

Fast forward to 2012, and Apple is once again telling the public it intends to improve, in precisely the same areas. But why should anyone think Apple’s commitment is any greater today than it was in 2006? Two important signs make me skeptical.

The first sign of trouble is the fact that the FLA’s “Remediation Plan” focuses exclusively on Foxconn and its scheduling, compensation, health and safety and industrial relations practices. Nothing in the plan makes Apple responsible for changing Apple’s own key behavior, the price it pays for Foxconn’s production. If Apple’s pricing is so tight that Foxconn can’t meet its profit targets without exploiting its employees, who’s responsible for their exploitation? If, as Apple claims, it truly wants to reduce the overtime hours Foxconn’s employees work to legal norms, without reducing the pay the workers receive, Apple can make that happen by paying more for each unit of production – enabling Foxconn to pay more more for each hour worked. But Apple hasn’t pledged that and the FLA doesn’t even mention the economics of Apple’s contracts with Foxconn. Apple’s public attitude is akin to saying: “We’re as pure as the driven snow, and our only taint comes from Foxconn’s sins.” But Apple has tolerated or compelled these practices for six years.

The second sign of trouble is that Apple and Foxconn have agreed to keep violating the law for the next 15 months, with the FLA’s blessing. Chinese labor law limits overtime per month to 36 hours, yet Apple and Foxconn have agreed to wait until July 1, 2013 to live within the law (page 12 in FLA’s report). As outrageous as this is, it seems to have gone unnoticed in all of the reporting on the FLA report. Perhaps the companies are right to think that Chinese law is a joke that can be ignored. But why doesn’t the FLA require the companies to comply with the law today, rather than next year? The FLA hours of work standard permits employees to work 60 hours per week — 80 hours of overtime a month, 44 hours longer than the law permits. How is this different or more acceptable than a standard that permits paying 25 percent less than the legal minimum wage?

Finally, I recommend that any of Apple’s customers who care about the well-being of the people who make their iPads take a few minutes to read the FLA report before taking comfort in Apple’s new commitment to decent labor standards. Almost three-quarters of Foxconn’s workers in Chengdu “said their salaries did not cover their basic needs (report page 9).” It’s no wonder so many are willing to work 80 hours a week; they can’t afford not to. Yet the FLA does not call on Apple and Foxconn to raise wages.  Rather, “Given the concerns expressed by workers about whether wages cover their basic needs, the FLA recommends a follow-up study to document spending patterns and the actual costs of the components of a basic needs wage (report page 12).”

Now that’s a tough audit!


  • Anonymous

    Average work week was 56 hours per week (page 8), or at least 216 hours a month, average pay was between 2,200 and 2,800 RMB a month (page 9), and that equals  about 10 to 13 RMB an hour, and the exchange rate is 6.3 RMB per 1$. Therefore hourly wage is between $1.60 an hour to $2.00 an hour. Dept. of Labor says manufacturing labor in China averages $1.36 an hour (Monthly Labor Review, March 2011) in contrast to $34 an hour in the U.S.    
    Do they vote in China? Do they have free independent unions? Do they have a labor relations board to arbitrate grievances and disputes?  Why not? Why is this not a part of our trade agreement? Lori Wallach and this month’s issue of the American Prospect have articles about the new TPP agreement being pushed by Obama’s trade team. Eventually China, Japan and others could join this plan negotiated in total darkness and whose details are sealed for 4 years after the agreement is signed.