3:37 AM
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Apple's (AAPL) sixth annual "supplier responsibility" report is sure to be closely read by both critics and competitors.
For one thing an addendum to the report lists for the first time the names of Apple's major subcontractors -- 156 companies, many in the Far East, representing 97% of the company's supply chain. The list is available here for anyone to read.
For another, the report enumerates the violations discovered -- and Apple's responses -- in the company's 2011 audit of those suppliers. Although most electronics manufacturers rely on the same labor force to make their products, Apple tends to get singled for criticism when abuses come to light.
The report issued this week is surprisingly frank about the nature of those abuses. In its audit, Apple discovered (I quote):
18 facilities screened job candidates or current workers for hepatitis B, and 52 facilities lacked policies and procedures that prohibit discrimination based on results of medical tests.
24 facilities conducted pregnancy tests, and 56 facilities did not have policies and procedures that prohibit discriminatory practices based on pregnancy.
93 facilities had records that indicated more than 50 percent of their workers exceeded weekly working hour limits of 60 in at least 1 week out of the 12 sample period.
At 90 facilities, more than half of the records we reviewed indicated that workers had worked more than 6 consecutive days at least once per month, and 37 facilities lacked an adequate working day control system to ensure that workers took at least 1 day off in every 7 days.
42 facilities had payment practice violations, including delayed payment for employees' wages and no pay slips provided to employees.
68 facilities did not provide employees adequate benefits as required by laws and regulations, such as social insurance and free physical examinations. 49 facilities did not provide employees with paid leaves or vacations.
67 facilities used deductions from wages as a disciplinary measure.
108 facilities did not pay proper overtime wages as required by laws and regulations. For example, they did not provide sufficient overtime pay for holidays.
Apple separately listed what it called "core violations" of labor and human rights:
In 15 facilities it discovered foreign contract workers who had paid excessive recruitment fees to labor agencies.
In 5 facilities it discovered a total of 6 active and 13 historical cases of underage labor. In each case, the facility had insufficient controls to verify age or detect false documentation. Apple insists, however, that it found "no instances of intentional hiring of underage labor."
Although most of Apple's suppliers were discovered to be in violation of one rule or another -- nearly 70%, for example, failed to pay proper overtime -- Apple severed relations with only one of them: an unnamed "repeat offender." There was a second repeat offender, but Apple claims to be "correcting" its practices.
For one thing an addendum to the report lists for the first time the names of Apple's major subcontractors -- 156 companies, many in the Far East, representing 97% of the company's supply chain. The list is available here for anyone to read.
For another, the report enumerates the violations discovered -- and Apple's responses -- in the company's 2011 audit of those suppliers. Although most electronics manufacturers rely on the same labor force to make their products, Apple tends to get singled for criticism when abuses come to light.
The report issued this week is surprisingly frank about the nature of those abuses. In its audit, Apple discovered (I quote):
18 facilities screened job candidates or current workers for hepatitis B, and 52 facilities lacked policies and procedures that prohibit discrimination based on results of medical tests.
24 facilities conducted pregnancy tests, and 56 facilities did not have policies and procedures that prohibit discriminatory practices based on pregnancy.
93 facilities had records that indicated more than 50 percent of their workers exceeded weekly working hour limits of 60 in at least 1 week out of the 12 sample period.
At 90 facilities, more than half of the records we reviewed indicated that workers had worked more than 6 consecutive days at least once per month, and 37 facilities lacked an adequate working day control system to ensure that workers took at least 1 day off in every 7 days.
42 facilities had payment practice violations, including delayed payment for employees' wages and no pay slips provided to employees.
68 facilities did not provide employees adequate benefits as required by laws and regulations, such as social insurance and free physical examinations. 49 facilities did not provide employees with paid leaves or vacations.
67 facilities used deductions from wages as a disciplinary measure.
108 facilities did not pay proper overtime wages as required by laws and regulations. For example, they did not provide sufficient overtime pay for holidays.
Apple separately listed what it called "core violations" of labor and human rights:
In 15 facilities it discovered foreign contract workers who had paid excessive recruitment fees to labor agencies.
In 5 facilities it discovered a total of 6 active and 13 historical cases of underage labor. In each case, the facility had insufficient controls to verify age or detect false documentation. Apple insists, however, that it found "no instances of intentional hiring of underage labor."
Although most of Apple's suppliers were discovered to be in violation of one rule or another -- nearly 70%, for example, failed to pay proper overtime -- Apple severed relations with only one of them: an unnamed "repeat offender." There was a second repeat offender, but Apple claims to be "correcting" its practices.
