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Apple Terminates One China Supplier That Had 74 Underage Workers

Apple China supplier report 2013

I’ve been looking at Apple’s (NASDAQ:AAPL) annual ‘supplier responsibility’ reports for a few years now and, depressingly, they’re still battling the same ingrained problems among its Chinese partners, most notably child labor, forced excessive worker hours, and poor safety conditions. Year in, year out. Apple’s newest report is out today, and it details the same grim scene. For example, Apple details that it found, in its site inspections, one Chinese company where there were “74 cases of workers under age 16.”

That Apple supplier, Guangdong Real Faith Pingzhou Electronics, has been terminated, and the 2013 report points out that it’s also tackling the underlying problem by identifying and notifying authorities of any “third-party labor agent that willfully and illegally recruited young workers.” Indeed, one such agency in Shenzhen was found to have “conspired with families to forge age verification documents and make the workers seem older than they were.” No underage labor was found among final assembly partners, but clearly it’s still an issue lower down the supply chain:

11 facilities were found with underage labor, with a total of 106 active cases and 70 historical cases. In all but one case, the facilities had insufficient controls to verify age or to detect false documentation, but there was no intentional hiring of underage labor.

In such cases, the Cupertino company points out, “We require suppliers to return underage workers to school and finance their education at a school chosen by the family.”

Bonded labor and lost wages

Apple’s newest 37-page report was compiled by the Fair Labor Association (FLA), who also led the involved 393 audits throughout 2012, Apple’s most extensive investigation of its own complex supply chain. It covers 1.5 million workers not just in China but in a total of 14 countries.

Apple China workers 2013

Factory workers in Shanghai use the iMac-packed computer room after work.

As for other recurring issues that are prevalent among its Chinese and overseas suppliers, Apple claims to now have:

  • An average of 92 percent compliance on a maximum 60-hour work week for factory-floor workers.

  • Eight facilities were found with “bonded labor” – workers forced to stay due to the seizure of a large cash deposit.

  • Apple got suppliers to return a total of US$6.4 million to workers in 2012 that had been held as a form of bonded labor, or taken as “excessive recruitment fees” to get a job at a plant.

  • 102 facilities did not pay night-shift workers the appropriate pay for legal [public] holidays due to an incorrect interpretation of the law. So $2.3 million worth of past inaccuracies were given back to workers in 2012.

Toxic shock

Apple, which saw iPhone sales double in China in the past year, has also been under fire for safety issues and environmental damage among its suppliers. While “1.32 million workers got workplace safety training in 2012,” no mention is made of issues like the toxic cleaning substance n-hexane, which sickened many workers in 2011. But the report states that “chemical hazard management” was gradually implemented in 2012, and will be ready to be audited this year in readiness for evaluation in Apple’s next annual supplier report.

The full PDF report is here.


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