Electronics Production | January 24, 2012

Apple finds core violation - terminates business relationship

Cupertino-based electronics giant Apple has issued its annual Supplier Responsibility Progress Report for 2012, revealing several violations of the company's Supplier Code of Conduct.
The new report - which for the first time includes an almost complete list of suppliers - provides the results of 229 supplier audits conducted by Apple.

The audits were lead by an Apple auditor and supported by local third party auditors, focusing on violations of the company's Supplier Code of Conduct .

As show below, the audits have identified several instances of Apple protocol being broken, including underage labor.

Anti discrimination

- 18 facilities screened job candidates or current workers for hepatitis B, and 52 facilities lacked policies and procedures that prohibit discrimination based on results of medical tests

- 24 facilities conducted pregnancy tests

- 56 facilities did not have policies and procedures that prohibit discriminatory practices based on pregnancy.

Working hour

Apple’s Code sets a maximum of 60 work hours per week and requires at least one day of rest per seven days of work, while allowing exceptions in unusual or emergency circumstances

- 93 facilities had records that indicated more than 50 percent of their workers exceeded weekly working hour limits of 60 in at least 1 week out of the 12 sample period

- At 90 facilities, more than half of the records reviewed indicated that workers had worked more than 6 consecutive days at least once per month, and 37 facilities lacked an adequate working day control system to ensure that workers took at least 1 day off in every 7 days

Wages and benefits

- 42 facilities had payment practice violations, including delayed payment for employees’ wages and no pay slips provided to employees

- 68 facilities did not provide employees adequate benefits as required by laws and regulations, such as social insurance and free physical examinations

- 49 facilities did not provide employees with paid leaves or vacations

- 67 facilities used deductions from wages as a disciplinary measure

- 108 facilities did not pay proper overtime wages as required by laws and regulations. For example, they did not provide sufficient overtime pay for holidays

In addition to issues found in Apple's standard audits, the supplier responsibility program discovered the following core violations in supplier labor and human rights practices.

Involuntary labor

At two facilities, Apple classified suppliers as repeat offenders. As a consequence, the electronics giant terminated business with one of the identified companies and is "correcting the practices of the other supplier".

At 15 facilities, Apple discovered that foreign contract workers had paid excessive recruitment fees to labor agencies. "We required suppliers to reimburse any fees that exceeded Apple’s limits. In 2011, USD 3.3 million was reimbursed, bringing the total that has been repaid to workers since 2008 to USD 6.7 million".

Underage labor

Apple reported at 5 facilities a total of 6 active and 13 historical cases of underage labor. In each case, the facility had insufficient controls to verify age or detect false documentation.

"We found no instances of intentional hiring of underage labor. We required the suppliers to support the young workers’ return to school and to improve their management systems—such as labor recruitment practices and age verification procedures—to prevent recurrences".
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