Apple cleans up supplier base


Suicides prompt Apple to release new Supplier Responsibility report detailing unethical and inhumane practices uncovered in Asian outlets

Apple cleans up supplier base
Apple cleans up supplier base

By Anna Game-Lopata | February 18, 2011

The tragic suicides of 12 workers last year at Apple’s Foxconn factory in Shenzhen, China has sparked an improved response to supplier responsibility.

Apple's products are primarily built by a variety of manufacturers, most of which are located in Taiwan, China and Singapore.

While regular reports of poor working conditions, abuse and unethical practices in some of these locations have dogged the computer giant for some time, the Foxconn suicides have been the wake-up call the company needs to augment its corporate approach to the issue.

Apple this month published its latest Supplier Responsibility report, a document which the company has decided will now be released on an annual basis.

The report details key findings from Apple’s supplier audits along with related decisions, and facility improvements.

It also includes employee and management training, and company policies around protecting worker rights and acquiring conflict-free materials.

Apple says it audited 97 new facilities in 2010 and repeated audits at 30. That's 14 more new audits than in 2009 and nearly double the number of repeat audits.

The company investigated 127 facilities in all last year, bringing the total number of audits since 2007 to 288.

FOXCONN RESPONSE

"Like many of our customers and others around the world, we were disturbed and deeply saddened to learn that factory workers were taking their own lives at the Shenzhen facility of Foxconn," Apple says in its report.

Apple established an international team of experts, which following a visit to the Shenzhen factory in June 2010, suggested several areas for improvement.

These included better training of hotline staff and care centre counsellors and better monitoring to ensure effectiveness.

According to Apple, Foxconn incorporated the team’s specific recommendations into their long-term plans for addressing employee wellbeing.

"The company is implementing an employee assistance program (EAP) that focuses on maintaining employee mental health and expanding social support networks," the report maintains.

"In addition, (Foxconn management) has begun the process of expanding operations to other parts of China, enabling workers to be closer to their home provinces.

"Apple will continue to work with Foxconn through the implementation of these programs, and we plan to take key learnings from this engagement to other facilities in our supply base."

CORE VIOLATIONS

The report uncovers a series of anomalies, including instances of unethical behaviours, abuse, under-aged labour and other violations the company considers contrary to the core principles underlying its Supplier Code of Conduct.

In 2010, Apple audits of 127 facilities revealed 37 such core violations.

Apple found 18 facilities where workers had paid excessive recruitment fees a practice which the company consideres ‘involuntary labour’.

Ten facilities hired underage workers; there were two instances of worker endangerment; four facilities had falsified records; one case of bribery was uncovered, along with one case of coaching workers on how to answer auditors’ questions.

"During our investigation, we also discovered that the vocational school involved in hiring the underage workers had falsified student IDs and threatened retaliation against students who revealed their ages during our audits," Apple says.

"We reported the school to appropriate authorities in the Chinese government.

"When core violations occur, Apple’s goal is to work with suppliers to address problems, verify corrective actions, and drive improvements.

"Our 2010 audits and corrective action processes revealed three facilities where management failed to demonstrate serious commitment. In all three cases, we terminated business."

In 2010, Apple says it learned 137 workers at the Suzhou facility of Wintek, one of Apple’s suppliers, had suffered adverse health effects following exposure to n-hexane, a chemical in cleaning agents used in some manufacturing processes.

"We discovered that the factory had reconfigured operations without also changing its ventilation system," Apple says.

"Apple considers this series of incidents to be a core violation for worker endangerment.

"We required Wintek to stop using n-hexane and to provide evidence that they have removed the chemical from their production lines.

"In addition, Apple required them to fix their ventilation system. Since these changes, no new workers have suffered difficulties from chemical exposure."

MAPPING THE SUPPLY CHAIN

In line with Apple’s commitment to the sourcing of raw materials used in the manufacture of its products, the company last year began audits to identify smelters that can demonstrate that they do not procure materials from sources associated with conflict.

"We require our suppliers to use only metals that have been procured through a conflict-free process and from sources that adhere to our standards of human rights and environmental protection," the company says.

The supply chains for ‘conflict minerals’ consist of many types of businesses—family-run mines, brokers, smelters, refiners, and commodity exchanges—before reaching a component or subcomponent manufacturer.

The combination of a lengthy supply chain and a refining process makes it difficult to track and trace these materials.

Apple therefore mapped the use of potential conflict minerals in its supply chain.

"We identified 142 Apple suppliers that use tantalum, tin, tungsten, or gold to manufacture components for Apple products and the 109 smelters they source from.

"Apple is also at the forefront of a joint effort with the EICC and the Global e-Sustainability Initiative (GeSI) that will help our suppliers source conflict-free materials."

Another program, launched as a pilot in 2009 called Supplier Employee Education and Development (SEED), saw greater success in 2010.

SEED allows workers to take computer-based classes to learn English, computer, and technical skills, and some workers are able to join associate degree programs that are linked to Chinese universities.

In 2009, 14,800 workers participated. In 2010, that number rose to more than 16,000.

MOVING FORWARD

Apple says it continues to improve its supplier responsibility program to ensure that working conditions in its supply base are safe, workers are treated with respect and dignity, and manufacturing processes are environmentally responsible.

Priorities for 2011 are to:
• Extend the reach and improve the quality of Apple-mandated social
responsibility training so that more workers understand their rights and
how to communicate with factory management.
• Equip additional suppliers with Apple SEED classrooms to help workers
continue their education while remaining employed.
• Collaborate with industry groups and NGOs in China to address key issues—
such as working hours, underage labour, and employee well-being—through
root cause analysis, more aggressive audits, stronger requirements for corrective
and preventive actions, and expanded supplier training and assistance.
• Drive conflict-free verification measures to smelters in our supply chain, and require our component suppliers to source tantalum and tin from conflict-free producers.



You can also follow our updates by joining our LinkedIn group or liking us on Facebook