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Hazards issue 118, April-June 2012
Apple’s not as healthy as you’d think
It was no surprise when an investigation found “significant issues” including concerns about safety, excessive hours and low pay at Chinese plants making Apple iPhones and iPads. But, warns Hazards editor Rory O'Neill, the independent probe has also left some campaigners worried, with concerns the hi-tech giant is being given an easy ride.

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Hazards issue 118, April-June 2012

 

 

The producer of the world’s prettiest electronic gizmos faced some pretty ugly media revelations in the months preceding an independent audit of a key supplier. Most centred on the abusive management and safety abuses of Apple's principal sub-contractor Foxconn, one of the world’s largest manufacturers of computers.

There were more everyday safety problems too, like the aluminium dust explosions that killed workers putting the pearly sheen on the cases of iPads. A spate of suicides at Foxconn production facilities raised questions about the company’s “militaristic” management style. [See below: Group warned of iPad death factory risks and Call for action on Foxconn suicides]

While on the surface the independent investigation by the US Fair Labor Association (FLA), undertaken at Apple’s behest, might have appeared to be a step forward, it was criticised from the outset by global unions and workers’ rights groups as a ‘PR stunt’.

In a joint statement issued on 22 March 2012, they called on Apple to rely on workers themselves to monitor the labour conditions in the manufacture of its products, not a top-down auditing approach. “Give Apple workers a voice in their future”, said the joint statement from the International Metalworkers' Federation (IMF), International Trade Union Confederation (ITUC), Good Electronics, MakeITfair and Students and Scholars Against Corporate Misbehaviour (SACOM).

ETHICALLY USELESS  When multinationals are discovered to be using exploited labour to manufacture their products, it doesn’t go down well with consumers. But a study has found their typical responses - codes of conduct, compliance programmes and audits - do not deliver sustained improvements in labour conditions over time. Instead they identify problems and leave them to fester. [more]

“Once the audits are over and FLA has gone home, the workers in the factories will again be left to deal with the brutal labour conditions that are imposed on them,” read the statement. “It is the workers themselves who are in the best position to monitor whether their labour rights are being respected and to push for remedies when they are not.”

The report of the FLA investigation, published on 29 March 2012, did not assuage these concerns. It did though produce some positive coverage for Apple, supported by reassuring noises from FLA, and it claimed to have secured improvements. FLA said it had reached agreements to reduce hours, protect pay, and improve staff representation. And Apple said it “fully accepted” the report's recommendations. “We share the FLA's goal of improving lives and raising the bar for manufacturing companies everywhere,” it said in a statement.

STILL iBAD  The controversial independent labour standards audit of a key Apple subcontractor in China which led Apple to promise sweeping changes has not delivered improvements two months later, a study found. [more]

The investigation - one of the largest ever conducted of a US company's operations abroad - found employees often worked more than 60 hours a week and sometimes for seven days running without the required day off. Other violations included unpaid overtime and health and safety risks. The FLA said Foxconn had agreed to comply with the association's standards on working hours by July 2013, bringing them in line with a legal limit in China of 49 hours per week. The company said it would hire thousands more workers in order to compensate for the move.

But campaign group Students and Scholars Against Corporate Misbehaviour (SACOM) said “the problem of harsh management and work pressure has been tactfully omitted in the report”. Any mention of worker participation via independent, unimpeded unions, was also glossed over. A 2011 SACOM report on conditions in a Foxconn factory producing iPads warned of dangers posed by aluminium dust. Two weeks later, an aluminium explosion killed three workers. [See below: Group warned of iPad death factory risks]

Scott Nova, director of the Washington DC-based Worker Rights Consortium, said there are some “fairly strong” criticisms of Foxconn’s safety practices included in the report, based on assessments for FLA by contract auditing firms Openview and Infact Global Partners. These “identify a lot of specific problems and show that meaningful systems are not in place”, Nova said, but he is concerned these are “downplayed” in FLA’s summary report.

Nova added FLA president and CEO Auret van Heerden, in public statements made after the report's release, was “essentially misrepresenting his own hired auditors’ findings in order to put a more Apple-friendly spin on things.” This included casting doubt on the validity of workers’ reports of accidents and claiming the company “has got all the systems in place to take care of safety and health at work” but workers “don’t appreciate it.”


BAD APPLE? Campaigners say Apple auditor FLA gave the hi-tech giant an easy ride in related media coverage.

On 30 March 2012, questioned on the PBS News Hour programme about the FLA report’s observation that 43 per cent of Foxconn employees questioned said they has experienced or witnessed an accident, van Heerden responded: “Yes and no. The 43 per cent shouldn't be taken as an accident statistic. It's a perception. And, in fact, when we drove down, we found that Foxconn had put in place all of the formal procedures that you need to manage the accident risks in those facilities.”

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The day before, van Heerden had told ABC’s Nightline: “Foxconn has got all the systems in place to take care of safety and health at work. They got the policies, the procedures, the staff are trained. We checked whether they're taking the right measurements. We checked whether the instruments are calibrated correctly. So that the hardware, if you like, of their health and safety system is in place. And they've strengthened it, they've improved it since the accidents that they had last year.

“It's the software that's missing. That message is not getting through to workers. They don't appreciate it. They're not aware of it. They're not involved the in decision making, not involved in the monitoring of those health and safety conditions. So there's a perception gap there. And it's very important to close that.”

Safety inspector Garrett Brown, of the Maquiladora Health and Safety Support Network, said the report painted a less pretty picture - what it revealed was not a problem of perception, it was a problem of practice. He said: “No effective occupational health and safety (OHS) programme can or will exist at Foxconn/Apple without the direct participation of informed, actually ‘empowered’ workers who play a direct role in carrying out the OHS programme - conducting periodic inspections of facilities and equipment; conducting accident investigations; developing, implementing and verifying hazard corrections based on these inspections and accident investigations; and conducting peer trainings with their co-workers on all the hazards that exist in the workplace.”

Brown added: “The only accurate description for Foxconn’s OHS program is ‘catastrophic failure,’  literally in the case of the two aluminium dust explosions that killed and maimed for life unprotected and untrained young workers. This level of failure can only be by design on the part of Foxconn and by ‘wink, wink, nod, nod’ on the part of Apple.”

Ted Smith of the International Campaign for Responsible Technology (ICRT), referencing Apple’s iconic ‘Think Different’ PR campaign, commented: “Apple could insist that Foxconn open its doors to outside NGOs and experts to help develop safer and more transparent production methods. A small fraction of Apple's cash reserves could provide a huge step toward developing sustainable production benchmarks that would be a beacon for the industry. That kind of leadership would truly be a way to ‘think different.’”

He noted: “If Apple's current leaders really want to ‘think different’ and provide 21st century leadership, a small fraction of their ‘excess cash’ would go a long way. They could recapture the mantle of the company that cares. Now that would truly be different.”

Apple is a company that could afford to make improvements. Its chief executive Timothy D Cook, who succeeded Steve Jobs as chief executive in August 2011, was paid a cash salary of roughly $900,000 in 2011. But that was just pocket money compared to the rest of his pay package. A one-time award, in the form of Apple stock, was initially worth a staggering $376.2 million. At the start of April 2012, his stock was valued at over $600 million, reflecting Apple’s soaring share price.

 

Group warned of iPad death factory risks

A Hong Kong-based campaign group had warned about deadly dust dangers at a computer factory in China which exploded on 20 May 2011, killing three workers and injuring 15 others.

On 25 May 2011, Students and Scholars Against Corporate Misbehaviour (SACOM) released a video revealing the extent of worker exposures to aluminium dust in the polishing department at the Foxconn plant in Chengdu. The video was taken in March 2011, two months prior to the suspected aluminium dust explosion. Workers in the department hit by the devastating blast have to polish Apple iPad cases to give them a smooth, shiny lustre. In the footage, workers faces, hands and clothes are covered in dust.

SACOM said the video supports its claim that the department had poor ventilation and provided inadequate protective equipment for workers. It added that the tragedy could have been averted if Foxconn and Apple had “strictly complied with the local laws on work safety and implemented corrective action plan afterwards.” The group's 6 May 2011 investigative report on conditions in Foxconn plants warned: “In the milling machine department in Chengdu, some workers state they always breathe in the aluminium dust. Workers in the polishing department also complain that the department is full of aluminium dust. Even though they have worn gloves, their hands are still covered by dust and so as their face and clothes.”

Some workers made explicit complaints about the inadequate ventilation. The company rejected the criticisms in this report, insisting it ensured “that the highest level of health and safety standards are applied to our operations in all locations.”

SACOM said it was “outrageous” that Foxconn, a part of the Taiwan-based Hon Hai group and one of the world's largest subcontractors to microelectronics giants including Apple, Dell, Hewlett Packard and Sony, failed to address the problems identified.

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Call for action on Foxconn suicides

On 28 May 2010, global union confederation ITUC said it was 'gravely concerned' at the tragic suicides at Foxconn Technology Group in Shenzhen, China. ITUC says the Taiwanese Foxconn group is at the heart of the 'Made in China' export model. The group employs nearly 800,000 workers in China, with the Shenzhen facilities alone employing nearly 420,000. The union statement came after reports of 12 workers jumping from the buildings or attempted suicide in the Shenzhen production facilities of Foxconn. Ten of these young migrant workers died, and two others were seriously injured.

Facing critical press coverage worldwide, the company installed safety nets outside the facility and promised a pay hike of up to 30 per cent for workers. ITUC says the root problem “is the product of the Taiwanese company's harsh management practices and the particularly vulnerable situation of the young migrant workers in China as they are locked in the cost-competitive export model of China.” It added the firm supplies Western companies, including Apple, Nintendo, Nokia, Sony, Hewlett Packard and Dell, who need to take some responsibility.

“Many of these companies do have corporate codes of conduct which are supposed to ensure high social standards, and they share the responsibility for what happens in their supply chains,” an ITUC statement said. “The ITUC appeals to the Chinese government, the All China Confederation of Trade Unions, Foxconn and all the brand companies that are sourcing from Foxconn to take the necessary measures to offer assistance to the bereaved families and victims and make sure that adequate compensation mechanisms are developed.”

A 1 June 2010 joint statement from campaign groups GoodElectronics and makeITfair said they “are appalled by this suicide cluster and are urgently calling upon Foxconn and its customers to investigate the matter and to address the root causes of this situation.”

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Doubt cast on ‘ethical’ production claims

When multinationals are discovered to be using exploited labour to manufacture their products, it doesn’t go down well with consumers. Apple, Samsung, Hewlett Packard, Nike, Gap, Coca-Cola and Walmart are among those who have faced recent embarrassment over abuses ranging from child and forced labour to worker suicides and poisonings. And the boardroom response has frequently been to turn to independent auditors to vouch for their “ethical supply chain.”

It is an approach which has attracted criticism, with labour rights activists and unions arguing there is frequently too little worker involvement and too cosy a relationship between auditor and audited firms, an accusation that resurfaced this year when Apple agreed to an audit of a major subcontractor in China.

Richard Locke of the Massachusetts Institute of Technology persuaded four global firms regarded as leaders in ethical supply chains - Nike, Coca-Cola, HP and PVH, a big American producer of clothing - to let him analyse six years of data from their factory audits, starting in 2005. His research, to be published this year in a book, ‘Promoting Labour Rights in a Global Economy’, concluded codes of conduct, compliance programmes and audits “[do] not deliver sustained improvements in labour conditions over time.”

The approach instead helped gather information highlighting the problems without remedying them. Locke also found for firms trying to improve working conditions the fault may well be in their own business model. Just-in-time manufacturing has made supply chains leaner. Reducing inventory reduces costs and allows firms to move more quickly. As products’ life-cycles shorten, this is a crucial competitive edge.

But a last-minute design change or the launch of a new product can mean suppliers having to pull out all the stops to keep up - or face a stiff financial penalty. Aron Cramer of the ethical business and social responsibility consulting group BSR indicated better official oversight was required. He told The Economist: “Governments are not pulling their weight,” adding there has been “too much outsourcing of enforcement to the private sector”.

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No change for iPad workers

A controversial independent labour standards audit of a key Apple subcontractor in China which led Apple to promise sweeping changes has not so far delivered improvements, a study has concluded. The findings of the Hong Kong labour rights organisation Students and Scholars Against Corporate Misbehaviour (SACOM) were released on 31 May 2012, two months after the report of an Fair Labor Association (FLA) investigation of Apple supplier Foxconn was published.

The SACOM report, ‘Sweatshops are good for Apple and Foxconn, but not for workers’ alludes to a recent remark by Foxconn CEO Terry Gou who, during a visit to Taiwan in late April, addressed Chinese workers with the rhetorical question “What's wrong with sweatshops?.” He commented: “There's nothing wrong with working hard, with blood and sweat, as long as no laws are broken.”

The SACOM report is based on interviews with 170 workers in the Zhengzhou and Shenzhen export processing zones carried out between March and May 2012. The interviews established there were no changes at the work floor and that “labour rights violations remain the norm in the Foxconn factories,” the report notes.

SACOM found workers were unaware of the FLA report or the suggested remedial actions, hours and labour rights abuses were continuing, and inhumane disciplinary practices were still in evidence. According to SACOM, these include forcing workers to write and read out 'confession letters' and to clean toilets. Workers also raised continuing concerns about safety, including inadequate training.

To coincide with publication of the report, SACOM and Chinese labour groups including the Hong Kong Confederation of Trade Unions ((HKCTU), Workers Empowerment, Globalization Monitor and the Chinese Working Women Network staged a protest at a Foxconn shareholders meeting. A giant souvenir flag was offered to Foxconn declaring ‘Foxconn is the world’s no.1 sweatshop’. Foxconn declined to accept either the SACOM report or the flag.


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iSick and iTired

It was no surprise when an independent investigation found “significant issues” including concerns about safety, excessive hours and low pay at Chinese plants making Apple iPhones and iPads.

More

See below: Group warned of iPad death factory risks

See below: Call for action on Foxconn suicides

See below: Doubt cast on ‘ethical’ production claims

See below: No change for iPad workers

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