Labor Activist Li Qiang wants you to know that the iPhone 4 in his pocket is not an endorsement of Apple's policies, just an acknowledgement that the company is doing a better job of monitoring factory conditions than its peers. The founder of leading advocacy group China Labor Watch (CLW) told us that, though the Cupertino company does more-thorough inspections than competitors, it is responsible for poor working conditions at its suppliers' factories and needs to invest some of its record-breaking profits in improving them.
"Although I know that the iPhone 4 is made at sweat shop factories in China, I still think that this is the only choice, because Apple is actually one of the best. Actually before I made a decision, I compared Apple with other cell phone companies, such as Nokia," he said through a translator. "And the conditions in those factories are worse than the ones of Apple."
Li explained that Apple is one of the few OEMs that discloses its factory audit reports to the public and he lauded the company's honesty in disclosing serious vendor violations like child labor or safety violations to the public. Indeed, a quick read of Apple's 2012 Supplier Responsibility Report (opens in new tab)reveals such potentially embarrassing facts as:
- Involuntary Labor: Apple discovered 17 facilities that required their workers to pay excessive recruitment fees, effectively forcing them to work off these debts as indentured servants. The company says it terminated business with one repeat offender and required the rest to reimburse workers for any fees that exceeded Apple's limits, a total of $3.3 million.
- Underage Labor: Auditors discovered 19 cases of underage workers at five facilities in 2011, though 13 of those were workers who had either left or aged since their hires. Apple says it required its suppliers to "support the young workers' return to school."
- Lack of Protective Gear: The company found 58 facilities where workers either lacked the proper protective gear, weren't using the gear, or didn't know how to use the gear. Apple says it required the facilities to educate the workers and supervisors about the importance of protective gear.
- Poor Emergency Preparedness: 99 facilities were in some form of non-compliance with fire prevention standards.
- Too Many Hours: 93 facilities had more than 50-percent of their workers exceeding the 60-hour weekly limit on work time. Apple hired a consultant to help suppliers manage their workers' time better.
- Explosions: This wasn't much of a disclosure, since explosions at two Apple plants were public knowledge before the report, but the company said it has changed its rules about working with toxic dust, the source of the fires.
By comparison, HP's detailed audit-findings page, which does not yet include information from 2011, only shows a vague percentage of worldwide suppliers who were in conformance with standards categories like "child labor avoidance" and "freely chosen employment," without providing specific numbers of violations and remedies taken. Dell provides a list of its top suppliers (opens in new tab) and lists the labor standards it follows (opens in new tab), including international conventions like the Electronic Industry Code of Conduct (opens in new tab)(EICC), but doesn't show a list of specific violations it has uncovered.
Ironcially, Apple appears to be less concerned about factory conditions than its competitors, because of the company's unwillingness to talk with advocacy groups like China Labor Watch and Students and Scholars Against Corporate Misbehavior. Li said Dell and HP responded to his group's reports about working conditions in their factories, but Apple ignored them. SACOM's Debby Chan told us she had had helpful conversations with both Dell and HP, but Apple had refused to meet with her.
"Dell and Hewlett Packard are not doing as good as Apple is doing right now," Li Said. "But when we talk about publicity and public relations, it’s another story."
Auditing Doesn't Always Reveal the Truth
Though most large hardware makers conduct thousands of supplier audits a year, those audits may not be enough to uncover the truth and correct problems. Li explained that bribery of auditors is common at Chinese factories, because it's less expensive to make a pay-off than to fix an unsafe condition. He said his company has uncovered at least nine cases of bribery at Intertek, a leading auditing firm and is currently involved in a lawsuit against the company for allegedly publishing the name of a confidential informant who had witnessed incidents of corruption.
Even when inspectors act in good faith, a simple visit may not be enough to uncover abuses, because supervisors prepare just for the audits. In a very detailed report based on worker interviews and undercover work, China Labor Watch details conditions at 11 factories that make products for a number of suppliers including Dell, HP, Lenovo, Philips, Apple, and others. In the section on Hongkair Electronic Technology, a supplier that makes components for ASUS, Apple, HP, IBM, China Labor Watch writes:
The factory often has different customer representatives come visit them to do an inspection of factory facilities. At the time of inspection, the factory will demand workers wear the appropriate safety protection equipment, will turn on all the factory lights, and will make an effort to clean up the factory grounds.
Apple states on its website that it has begun working with the Fair Labor Association (opens in new tab) (FLA) and will allow the association's inspectors into its factories and allow them to post the results of these audits to the FLA website. "This represents a level of transparency and independent oversight that is unmatched in our industry," Apple says.
Li said he's unimpressed with Apple's partnership with the FLA, because Intertek conducts some of their inspections. However, Li feels that Apple's own inspections are probably fairly accurate because of all the embarrassing abuses they've detailed.
Employee Hotlines a Solution
If audits don't always uncover the truth, there's another way to find out what's going on at the factories: Just ask the workers. Li said a number of advocacy groups are currently testing hotline programs in cooperation with major OEMs. Workers can call these numbers and report abuses, which then get sent straight to the companies involved.
Li would not disclose the names of any companies involved in these pilot programs, because they have asked for confidentiality right now. However, he said that companies need to involve all the facilities that make their products, not just a few.
"For example if the company has 100 supplier factories in China, maybe they just wanted to involve like 20 or even less of them to participate in the hotline program," he said. "They have to consider in the cost of the whole program that as soon as they find out about problems they have to remedy them, which is money-consuming as well."
Foxconn One of the Best
According to employees interviewed by China Labor Watch, the conditions at many suppliers' factories are far worse than those found at Foxconn, a company that has become infamous because of a series of high-profile incidents such as employee suicides and a fatal explosion. However, according to the China Labor Watch report "Tragedies of Globalization: The Truth Behind Electronics Sweatshops," workers at the two Foxconn plants they investigated received health and safety training, along with all necessary gear, before starting work. Machines at the plants are reportedly maintained and checked for safety every day. According to the report, Foxconn workers even have a trade union with a workers' care center hotline for reporting problems.
All of this is not to say Foxconn, which manufactures products for Apple, HP, Dell, and many other OEMs, is a pleasant place to work. As with other plants, the managers are reportedly verbally abusive, the work is grueling, and one of the Foxconn factories apparently required a lot of overtime with few breaks. However, workers at the Longhua Foxconn plant received better wages and benefits than those at any of the 10 factories China Labor Watch investigated.
"Foxconn is not good," Li told the New York Times. "But if we compare all industries, electronics, textile, toys, Foxconn is one of the best."
Meanwhile, at other factories China Labor Watch investigated, workers and undercover agents reported serious health and safety problems, along with even more exploitative wages and poor working conditions. For example, at Catcher Technology, a company that makes notebooks and phones for Acer, Apple, ASUS, Dell, IBM, Motorola, Nokia and Sony, workers are allegedly given no safety training and are then forced to inhale noxious and potentially toxic fumes. Labor Watch writes:
If a worker has an accident, it is their own problem. There is no systematized health and safety education training . . . Workers wear masks during working hours, although the masks do not serve much of a purpose. Workers report that especially the grinding of the cell phone case creates very fine powder which is extremely easy to inhale into the nose and lungs.
At Compal Electronics, a huge supplier that manufactures notebooks for Dell, HP, Lenovo and Toshiba, workers reported that the company does not provide face masks or ear plugs, despite loud noises. Apparently, there was not even a first-aid kit available. "In the event of an injury," Labor Watch writes, "the workshop manager will give the injured worker some cotton to cover up their injury."
Apple, Suppliers, Authorities: Who's to Blame?
Reading about the abusive managers, poor safety conditions, filthy living accommodations, long hours, and low wages, it's tempting to blame the suppliers who run the factories or government authorities who are charged with enforcing China's 2008 Labor Law. According to Li, China's Bureau of Labor is limited in its abilities by local governments that receive tax revenue from the factories, but don't have to provide benefits to what they classify migrant workers. The suppliers, he says, are also limited, because of price and production pressures from Apple and the other OEMs.
"If Apple still lowers their prices and doesn’t give enough profits to the factories, then the factories don’t have money to improve the labor conditions," he said. "So it’s always the problem of Apple and not the problem of factories. We can see that Apple is trying to put all the responsibility on the factories by releasing the supplier factory list and trying to put the factories into the focus of the immediate public, but we think that Apple should do more to make a positive change in the whole system."
Though he believes that Apple has done a better job of inspecting its factories than others, Li maintains that the public is right to put more pressure on Tim Cook's company than its competitors who have the same problems. Because Apple makes the most profit, he reasons, it also bears the most responsibility for fixing a broken system. He maintains that it wouldn't take more than 2-percent of Apple's profits to dramatically improve workers' lives in China while companies such as Dell and HP would have to spend more.
"Although we think Apple is among the best in terms of auditing, we still think that Apple can do more because it is the most profitable company in the world," he said. "As soon as Apple is willing to give a small percentage of its profits, the workers can benefit a lot. But Apple is not willing to do that."