Hong Kong, 28 February 2014

On the day of Apple’s annual general meeting, Students and Scholars Against Corporate Misbehaviour (SACOM) is urging Apple again to take immediate and constructive action to fulfil its corporate responsibility by improving the working conditions in its suppliers.

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[1], 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].

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[3] 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.

SACOM condemns Apple for outsourcing its orders while refusing to give appropriate resources and assistance to suppliers to improve working conditions in the factories.

SACOM’s demands to Apple:

  • To review and restructure their zero inventory policy to give appropriate production time to suppliers and control work hour as required by Chinese Labour Law;
  • To increase higher and reasonable pay to suppliers, tackling problems from root causes and allowing more space to suppliers to improve working condition;
  • To provide necessary resources and assistance for worker training and related remedial programmes to suppliers;
  • To support workers to build democratic trade union committees as entitled by the Chinese Trade Union Law;
  • To correct the exploitation on student interns now, protect student interns as required by the Law and protect students’ rights for a quality education;
  • To respect the public’s right-to-know by disclosing further audit information such as auditing agencies involved, and the list of suppliers that are under probation due to violation of Apple’s Code of Conduct.

Students and Scholars Against Corporate Misbehaviour (SACOM)

[1] According to the 2014 Q1 financial result released on 27 January 2014, Apple made a huge revenue of US$ 57.6 billion and a net profit of US$ 13.1 billion by the sales of 51 million iPhones, 26 million iPads, 6 million iPods and 4.8 million Macs all over the world. iPhone and iPad Sales Drive Record Revenue and Operating Profit. Retrieved from: https://www.apple.com/pr/library/2014/01/27Apple-Reports-First-Quarter-Results.html

[2] SACOM (2013), Stains on iPhones’ Cover Glass – Dehumanized Working Condition of Biel Crystal for Apple’s Products.

[3]One of the reports is Apple fails in its responsibility to monitor suppliers by SACOM (2013).