Sacom

Human cost of a trendy phone

BYLINE: A Dongguan factory that makes iPhones is hardly the Apple of workers’ eyes.

South China Morning Post

October 5, 2008 Sunday

Simon Parry reports

SECTION: NEWS; Pg. 14

His company is the talk of the town and its newest product is turning Hong Kong’s mobile phone market on its head. But Apple executive Tim Mohin is reticent when it comes to talking about a meeting he had in Hong Kong 11 days ago to discuss the iPhone.

“I’m just the guy doing the work,” Mr Mohin said by phone from his room at the Grand Hyatt shortly before flying back to Apple’s California headquarters last Thursday. “I need to tell you I’m not really authorised to speak to the press, unfortunately.”

His reluctance to speak is perhaps understandable. After all, the meeting he had over dinner the evening before was not to discuss the huge success of the iPhone 3G in Hong Kong since its July launch, or the prospect of greatly accelerated sales now that Apple is making unlocked handsets available.

Rather, it was a more sensitive encounter held to discuss allegations of labour abuse in a Taiwanese-owned factory in Dongguan where labour rights groups say the cameras for iPhones and other Apple-branded iPhone accessories are made.

Mr Mohin is Apple’s senior manager for supplier responsibility. On the other side of the table were two representatives from the Hong Kong-based pressure group Students and Scholars Against Corporate Misbehaviour (SACOM).

The talks took place on the strict understanding that details of the discussions would not be revealed, and both parties stuck rigidly to that agreement when contacted by the Sunday Morning Post. “The meeting was held under Chatham House Rules,” Mr Mohin said.

However, it coincided with the release of a European Union-funded report, containing SACOM’s findings, which looks into labour conditions at a number of factories making mobile phone parts and accessories in China and the Philippines.

The report details the claims about the conditions for workers - mostly women aged 18 to 30 from poor provinces - at the Primax factory in Dongguan where the report says iPhone cameras and other accessories for the iPhone are made. That part of the report is something Jenny Chan, SACOM’s chief co-ordinator and one of the organisation’s two representatives to meet Mr Mohin, is free to discuss.

The report - hotly disputed in a number of key areas by officials at Primax - claims workers have been doing up to 100 hours overtime a month on top of their 168 normal hours to meet production deadlines in violation of local labour laws.

It says the women were being made to work seven days a week at peak production times and that their wages are docked if they make mistakes out of exhaustion. It claims workers there complained of back pain, sore eyes and muscle strain because of their arduous working conditions.

Researchers who visited the factory, where 8,500 staff are employed, say workers told them they were paid overtime below the minimum standard for working on public holidays, and were not given copies of their labour contracts.

The allegations, based on visits to the factory and interviews with workers by investigators from SACOM in March and June, are included in a report compiled by the consumer electronics pressure group Make IT Fair and published in September. One woman worker at Primax quoted in the report, titled “Silenced To Deliver”, said that workers who “get nervous and make mistakes” - when orders mount up and hours are long - are fined half a day’s pay. “Our work is very stressful,” she told an investigator. “When we punch out at night, we are totally exhausted.”

Ms Chan pointed out that the report came after Apple admitted less than perfect labour conditions at Foxconn, another Taiwanese-owned factory in Shenzhen making iPods, after newspaper investigations in 2006.

“Apple said they had learned a lesson from the iPod scandal but just two years later, in another southern China manufacturing site, we find labour abuses at an Apple iPhone factory,” she said.

“Western consumers who buy these smart, trendy new iPhones will be disappointed and shocked to learn that these young girls have to work up to 12 hours a day to make them and without any social insurance.”

Ms Chan said the lack of proper insurance was in her view one of the most worrying findings in the report on Primax. “If workers are sick, they have to take unpaid leave and buy drugs from the local stores,” she said. “We also found that these workers have been doing too much overtime and they are too exhausted to concentrate. They make mistakes and they have money deducted from their pay.”

A written response from Primax sent to SACOM before the publication of the report said the factory was looking into the overtime issue and had begun organising worker insurance, according to Ms Chan. “What we want to know is, why didn’t they do it from the beginning?” she said.

“It is a violation of the Chinese Labour Law. We are also worried that in response to this report, they will shorten the working hours but increase the hourly output indicator. They will make their workload more condensed so 1/2 people are now responsible for two people’s workload.”

In a detailed statement last week, Primax denied that workers were made to do up to 100 hours overtime a month. It said Dongguan labour officials allowed 216 overtime hours every six months and added: “We are making adjustments to abide by that regulation.”

“This will allow us to keep a balance between business needs and regulatory requirements. The independent investigators we have met all find this solution acceptable.”

The statement insisted Primax was in “full compliance” with the law on wages and overtime pay rates, and claimed workers were all given copies of the labour contract within one month of being hired and were fully covered with injury insurance and medical insurance as well as pensions.

That statement on insurance appears to be at odds with a written response sent to SACOM in June from Primax’s Taiwan-based spokeswoman Nancy Hsu, which stated: “We’re upgrading our insurance programmes to be in full compliance with the labour laws before the end of 2008.”

On the subject of fines for workers who fail to meet production targets, the statement said: “We do set production targets, mostly as the basis for reward rather than punishment. We do not fine or deduct wages [from] workers just because workers fail to meet targets.” The statement also disputed claims of a working environment that harmed workers’ health. “An occupational health management programme is in place to identify the occupational disease hazards in the workplace,” it said.

“Occupational medical surveillance is provided to workers who are potentially exposed to the identified occupational disease hazards annually, and a process for tracking and annually assessing industrial hygiene and illness occurrences was developed in June 2007.”

Simon Cheng, human resources director of Primax China, attacked the report on conditions at the factory as “one-sided and prejudiced”.

He said: “Primax China may not be a perfect company but we do make efforts to continually improve our working and living conditions, and we have made pretty good progress in the past few years. This progress shouldn’t be ignored or discredited.”

From Apple’s point of view, the man probably best equipped to answer questions about conditions at Primax, Mr Mohin, declined to answer questions about the allegations contained in the report.

Instead, he referred the matter to company spokesman Steve Dowling at Apple’s California headquarters. Mr Dowling declined to address the specific points raised by the report and, true to Apple’s policy of not revealing the identity of its contracted factories in China, was careful not to acknowledge Primax’s role in the production of iPhones.

He said in a statement: “Every partner we work with agrees to adhere to our detailed supplier code of conduct, which oversees everything from safe working conditions to using environmentally responsible manufacturing processes. To enforce compliance, we conduct extensive onsite audits led by Apple employees in conjunction with third-party experts.”

Because of the secrecy surrounding them, no one apart from those present knows the outcome of the talks between Mr Mohin and the SACOM representatives on the evening of September 24. Whatever it was, however, it is clear that Ms Chan and her colleagues believe Apple could play a bigger role in improving conditions for workers at the factories in China that make its big-selling products.

“This is a very competitive market,” she said. “Big brand-name companies, when they source from China, push down the order price and squeeze it to a minimum while asking for very quick delivery.”

“This is the root cause of all the labour problems. Primax should be responsible for some matters, but the brand-name companies like Apple should be aware of the implications of their buying policies upon workers.”

A significant step forward, she argued, would be for Apple to follow the example of other hi-tech companies operating in China, like Hewlett-Packard and Fujitsu-Siemens, and make public their list of suppliers rather than keep it confidential.

“It would make it easier for us to set up our research strategy if we know where the Chinese suppliers are located,” Ms Chan said.

“We could go there directly and visit their dormitories and speak to workers and learn about conditions.”

“We want Apple to be more transparent and accountable to the public. Consumers have a right to know if the iPhone they buy is made in a sweat shop or in a decent factory.”

*GRAPHIC:* Credit: Bloomberg; Red Door News; A customer leaves an Apple store in the high-end shopping area of 5th Avenue in New York after purchasing an iPhone.; Workers have a meal outside the Primax factory in Dongguan.

© Copyright 2008 South China Morning Post Ltd. All Rights Reserved.

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Download and read the full 76-page report, */Silenced to Deliver: Mobile phone manufacturing in China and the Philippines (September 2008)/*, at www.makeitfair.org <http://www.makeitfair.org> and www.sacom.hk <http://www.sacom.hk/>.

Information for consumers who want to take action is available at http://makeitfair.org/take-action.