© Analysis | March 05, 2014

SACOM: "Apple! We are not impressed!"

Non-profit organisation SACOM - Students and Scholars Against Corporate Misbehaviour - has taken a closer look at Apple's recently published Supplier Responsibility Report. The verdict? "We are not impressed!"
EDITOR'S NOTE_ This is a statement from SACOM.

Despite respectable quarterly revenues of US$57.6 billion and a net quarterly profit of US$13.1 billion in the first quarter of its fiscal year of 2014, the company is unwilling to share its success with frontline workers – those who turn its ideas into real products. Apple’s newly published Corporate Supplier Responsibility (CSR) Progress Report projects an ideal workplace at Apple suppliers, yet we doubt workers are enjoying any benefit at all:

1. The ambiguous achievement of reducing excessive work hours

Apple praises its success in driving its suppliers to reach an average of 95 per cent compliance of their 60-hour workweek. The concept of “average” is vague. The exception of “unusual or emergency circumstances” is indeed a loophole of the policy, denying that the root cause of the problem is Apple’s zero inventory policy. In addition, Apple is still ignoring the weekly work hour limit of 48 hours maximum as required by Chinese Labour Law.

From our investigation in 2013, we discovered at least one Apple supplier required workers to sign overtime work application on the first day of the employment training, as a way to produce “legitimate” evidence to fulfil Apple’s audit requirement.

2. Absence of workers in Apple’s top-down remediation programmes

Apple claims for its contribution to improve working condition in suppliers by setting up the new Apple Supplier Environment, Health and Safety (EHS) Academy. It says the 18-month programme has included 240 management personnel from 60 suppliers and covering more than 270,000 workers. The programme “[p]articipants are… required to apply their knowledge to create and implement real-time projects at their facilities” (P. 8). However the project progress back in the factories remains unknown.

SACOM criticises Apple for playing with numbers with such an opaque programme and doubts its efficiency and positive impact to the workers.

3. The vanished commitment of elected worker representatives in Apple suppliers

Apple states that it is “making sure workers’ voices are heard” (P. 9) by launching manager training programmes to facilitate communication between workers and managers. However, the programmes are again manager-oriented and workers’ participation is absent.

We are disappointed by Apple’s long-term production partner Foxconn’s denial of its trade union re-election pledge in May 2013. Since then, industrial relations is no longer part of the Fair Labor Association’s verification status report on Foxconn factories in Chengdu, Longhua and Guanlan.

SACOM believes that effective communication is the key to tackling the root cause of problems in Apple’s supply chain. Frontline workers should be included in training programmes and Apple has the responsibility to support workers’ freedom of association as entitled by the China’s Trade Union Law and to set up effective trade unions in its suppliers.

4. Refusal to admit its responsibility for student interns exploitation

There have been various investigative researches discovering the exploitation of student interns in Apple’s suppliers. They are forced to work in the factories though irrelevant to their studies, giving up their rights to receive a quality education. Their wages are even cut under the name of “internship fee”. Apple acts as if it was innocent of the exploitation of student interns in its suppliers. It blames the vocational schools for “often fail[ing] to perform the necessary due diligence to match students with appropriate internship opportunities or provide them with adequate support” (P. 13), and makes the excuse that students, suppliers and electronics companies (e.g. Apple itself) do not have access to sufficient available data of the vocational schools.

SACOM finds it completely absurd that such a big transnational company, which cares so much about every production detail, would not know the mismatch and exploitation of students to receive a high quality internship opportunity. It is outrageous that Apple is allowing their suppliers to exploit student interns to maintain their workforce stability.

5. Outsourcing its production tasks and accountability to suppliers and workers

Apple says its code of conduct is “one of the toughest in the electronics industry” (P. 4) and is playing an active role to push its suppliers to fulfil them. However, from Apple’s CSR report, we know that it is only supporting some cost of the EHS Academy. We believe that suppliers have to cover the major cost of other training and specialised programmes.

Apple is known for its ability to maximise its profit margin; as a result suppliers are earning little for each order and must cover all costs to fulfil Apple’s CSR programmes and schemes. Meanwhile, suppliers are also transferring their costs to workers. For instance, Apple’s Code of Conduct has a clear requirement regarding dormitory and dining. Yet in order to fulfil it, suppliers would ask workers to pay higher dormitory rents and compulsory meal fees.
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