Apple taking one for the team in new labour rights abuse report

foxconn workerOne of the biggest stories of the past week I’ve covered in the Asia technology space was the latest report from China Labor Watch into alleged rights abuses at Apple supplier Pegatron.

In terms of the abuses uncovered by the rights group, they’re pretty similar to those detailed at Foxconn over the years which led to a landmark agreement between Apple, the Fair Labor Association and the Taiwanese manufacturer to sort out conditions at its plants.

When I say “similar” I mean things like overworking and underpaying staff, breaking local employment laws through discriminatory hiring, excessive overtime and the like and subjecting employees to sub-standard living conditions.

You can usually gauge the seriousness of the allegations by the speed of the tech giant in question’s response and the length of its statement. So it was that Apple came back within a few hours with a long response claiming it had undertaken 15 audits at Pegatron and that it had been “in close contact” with CLW investigating findings highlighted by the group.

It added:

Their latest report contains claims that are new to us and we will investigate them immediately. Our audit teams will return to Pegatron, RiTeng and AVY for special inspections this week. If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full.

One para that was lopped off my story referred to the fact that Pegatron facilities, including the ones mentioned in the report, produce gear for a raft of big name technology brands besides Apple. Microsoft, Dell, HP, Nokia and Asus have all had kit made by the Taiwanese headquartered manufacturer in the past.

Beyond Pegatron too there have reports of various rights abuses, in Samsung suppliers, and Chinese manufacturers making kit for firms including Telstra, Sony and Phillips.

However, the fruity-themed Cupertino giant, unfortunately for it, now has a reputation which makes it easier for hacks like me and rights groups like CLW to build a compelling narrative around such incidents.

For better or worse that’s the way it is but hopefully with Apple taking a lead, as it is certainly appears to be trying to do, on improving labour rights among its suppliers, others will follow. We mustn’t forget Apple boss Tim Cook used to be the firm’s COO and so will be well aware just how big a task it is to clean up the supply chain.

This is a process which will take years, not months, but it’s reassuring to an extent that stories like this still make the headlines, because once they stop then the whole process of improving the rights of shop workers in countries like China is likely to grind to a halt too.

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More Foxconn woes – the price of your iPhone 5

factoryAll the tech talk this week has been on the brand spanking new iPhone 5, which neatly shines the spotlight once again on the conditions at the Foxconn factories where it is assembled.

Now we all know Foxconn is regularly harangued by the NGOs for one misdemeanour or another. Labour rights violations at its plants have been highlighted time and again so I won’t go into them all again now.

The landmark agreement with the FLA and Apple was meant to set the tone for an improvement in pay and conditions, and at the three plants audited by the FLA things do seem to be progressing pretty well.

However, outside those factories there are still some disturbing reports.

The latest came from an undercover reporter from the Shanghai Evening News who lasted 10 days as a newbie worker at Foxconn’s Yu Tian plant, making iPhone 5 devices. Filthy living conditions, bullying by staff, forced overtime – the list of misdemeanours was usual Chinese tech factory fare, although interesting to hear it from a source other than an NGO.

Maybe that’s why Foxconn broke with usual tight-lipped tradition and issued a lengthy statement on this saying it would investigate and address any issues such as those found by the hack, adding in a rare admission of fallibility, that it is “not perfect”.

More disturbing news still came to me from an unnamed source, who claimed that 100 workers at the Taiwanese ODM giant’s Zhengzhou plant – also producing iPhone 5s – have been hospitalised after a food poisoning incident.

Now I must stress that Foxconn has completely denied this with the following statement:

Foxconn has checked with the relevant departments and medical facilities at their Zhengzhou campus and they have confirmed that there has been no such incident.

I haven’t been able to verify independently with the local hospital so for now I’m keeping an open mind.

However I think it’s pretty obvious that the labour problems in Chinese tech factories are far from over and will require the continued scrutiny and determination of the big name brands as well as the not-for-profits for some time to come if genuine change is going to happen across the board.

A final, if rather depressing footnote: Foxconn is still pretty widely regarded as a leader in the tech ODM space when it comes to pay and conditions in China.


Samsung latest to be hit by supplier labour abuse scandal

factoryAnother week, another woeful tale of big tech brands taking advantage of weakly enforced labour laws and immoral supply chain manufacturers.

This time it was Samsung that had its supplier factories investigated, and what was revealed, as always, was not pretty.

HEG Electronics’ plant in Guangdong – which apparently makes phones, MP3 players and other electrical kit for the Korean giant – was infiltrated by spies from not-for-profit China Labor Watch, yup, the same group that warned of severe irregularities in the auditing system of the tech supply chain.

The same old problems came to light as at Foxconn and VTech, of low pay, staff bullying and physical abuse, dangerous working conditions and forced and excessive overtime.

However, HEG was also accused of employing kids as young as 14 year’s old – illegal even in China –and paying them, and the huge intake of student interns it uses to man its factory, just 70 per cent of their rightful salary.

To its credit, Samsung did respond with a little more than we got from VTech and its customers:

Samsung Electronics has conducted two separate on-site inspections on HEG’s working conditions this year but found no irregularities on those occasions.

Given the report, we will conduct another field survey at the earliest possible time to ensure our previous inspections have been based on full information and to take appropriate measures to correct any problems that may surface.

Samsung Electronics is a company held to the highest standards of working conditions and we try to maintain that at our facilities and the facilities of partner companies around the world.

The issue here again goes back to the validity of the inspections. Unless they are independent – conducted for example by not-for-profits like China Labor Watch – and unannounced then they are virtually useless.

Samsung, if you remember, was highlighted as a client of Intertek, the professional auditing company that has in the past been found guilty of accepting bribes from clients in return for passing a clean bill of health.

There’s no suggestion that happened at its HEG audits, but it’s clear that the audit card should no longer be accepted as a reasonable explanation of such irregularities.