Apple reportedly drags its feet when dealing with chronic China labor law offenders

AppleInsider

A new report sheds some light on how Apple deals with companies that slack on enforcing labor laws in China, alleging that if corrective actions will impact Apple's bottom line, they are slow to materialize -- or may not happen at all.

iPhone 8 Plus (left) versus iPhone XR (right)

Apple and Suyin

The report by The Information leads off with the saga of cable and port manufacturer Suyin. In 2013, Apple demanded that it stop using underage labor to manufacture HDMI and USB ports. The company reportedly agreed to do so, but an audit by Apple three months later found more underage workers in the factories.

Apple stopped giving Suyin new business at that point. However, the report also alleges that it took three more years for Apple to completely cut ties with the company. An unnamed former employee told The Information that the long time it took Apple to cut ties with the company was because of a lack of sourcing of quality parts and products from other companies at the time.

Apple and iPhone glass manufacturer Biel Crystal

The report also cites Apple's dealings with smartphone glass manufacturer Biel Crystal. The saga with Biel also goes back to 2013, when an activist group accused Biel of labor violations and safety issues.

Apple investigated, and found issues with the company's practices. Specifically, mechanical and chemical hazards existed were compounded by a weak safety and health culture in the company.

At the time, Apple issued a 90-day timeline for compliance. According to "an ex-Apple employee with direct knowledge of Biel's supplier responsibility record" cited in the report, Biel hadn't completed many of the tasks after a year had elapsed -- and Apple continued sourcing iPhone glass from the company.

Fearing a loss of business, Biel took some steps that Apple demanded. Following another watchdog report, Apple again audited conditions at the plant, finding only slight improvements to working conditions.

When confronted, Biel executives reportedly told Apple that investments in better working conditions were only made to attempt to get more business from Apple, and further improvements weren't worth the investment. That business was lost to Lens Technology.

On Tuesday, a report claimed that Lens Technology had used forced labor to manufacture iPhone glass. An Apple spokesperson denied that report, declaring that Lens Technology "has not received any labor transfers of Uighur workers from Xinjiang." The spokesperson added that the company has a "zero tolerance" policy for forced labor.

Apple still sources glass from Biel.

Other issues cited

The report also brings up other labor abuses by Apple suppliers. Even after a reform of student labor use in 2012, reports continued to pop up. The report claims that Apple stepped back from demands about the banning of student labor after Foxconn objected, and it also notes that Quanta has refused Apple's request to reduce reliance on temporary workers.

The report again cites unnamed "three former team members and a former senior Apple manager familiar with the company's operations in China" claiming that Apple never removed any supplier for repeated law violations, because requiring suppliers to comply or cutting suppliers out completely would have created additional costs for Apple, and potentially delayed product releases.

Supply chain audits are only so complete

Lens Technology, like Biel, supplies nearly the entire tech industry with glass. Apple has no exclusive technology suppliers, and its main suppliers Foxconn, Wistron, and others, manufacture electronics and components for every tech company, including Amazon, Tesla, Microsoft, Dell, and others. This leads to a massive supply chain, with millions of laborers, and thousands of assembly lines.

Part of the issue, according to The Information, is that Apple's supply chain alone is so massive, even the 50,000 interviews that Apple cited in its latest responsibility report is a minute fraction of the entire effort. The report estimates that there are between 1.4 million and 1.8 million workers in China associated with Apple's supply chain.

A great deal of the audits and assessments that Apple demands are performed by self-assessments. Apple's procurement employees, who visit factories more often than supplier responsibility audit teams, are tasked with keeping an eye on things, and point out problems.

This is compounded by friction between the supplier responsibility team and procurement employees, according to former Apple employees that were "senior managers involved in the company's supply chain" cited by The Information.

"On your performance reviews, you were supposed to report how much money you helped Apple save," one former longtime Apple procurement employee said in the report. "You couldn't report that you saved Apple from a PR black eye."

Fred257

Do the right thing Apple!!!  Bad bad bad!!

texfla

Fred257 said:

Do the right thing Apple!!!  Bad bad bad!!

What exactly is “the right thing”?

badmonk

In reading the article, it looks like Apple attempted to affect change but was stymied in certain situations when they had few suppliers.

There is always room for improvement but I think Apple probably does a better job monitoring the conditions of it’s workers in it’s contracted supply lines than most other companies.  The stories of workers in the Bangladesh clothing factories, South China sea fisheries are horrendous and I suspect most manufactured goods that we don’t think twice about in our daily consumption (especially food and clothing) are made in worse conditions. 

So what is the alternative?  Buy from companies that manufacture budget electronics which conduct no oversight whatsoever when they make slipshod products that have short lives and accelerate e-waste and human misery?

That’s not a good option.  One needs to be mindful about our actions as consumers and make the best informed decisions we can.  For me that still means buying Apple products and using them as long as possible and disposing of them wisely.

svanstrom

Truth is that Apple would be f*cked if they straight up just left China; and if they don't leave China they will keep on finding human rights issues.

So what to do?

At what point will we consumers walk away from Apple if they don't move more of their production out of China?

Aaaaand… even if they move their production out of China, does that really help if the factories are still owned by Chinese companies. (Like with the AirPods Max: https://appleinsider.com/articles/20/12/10/apple-airpods-max-are-made-in-vietnam-but-still-by-chinese-firms.)

Rayz2016

badmonk said:

In reading the article, it looks like Apple attempted to affect change but was stymied in certain situations when they had few suppliers.

There is always room for improvement but I think Apple probably does a better job monitoring the conditions of it’s workers in it’s contracted supply lines than most other companies.  The stories of workers in the Bangladesh clothing factories, South China sea fisheries are horrendous and I suspect most manufactured goods that we don’t think twice about in our daily consumption (especially food and clothing) are made in worse conditions. 

So what is the alternative?  Buy from companies that manufacture budget electronics which conduct no oversight whatsoever when they make slipshod products that have short lives and accelerate e-waste and human misery?

That’s not a good option.  One needs to be mindful about our actions as consumers and make the best informed decisions we can.  For me that still means buying Apple products and using them as long as possible and disposing of them wisely.

Well, yeah. A lot of this read as though the writer was a little desperate. When I read it, I thought that Apple had balanced things as well as it could without impacting customers. 

Because you can guarantee that if we started getting poor quality components  or couldn’t get our gadget fix, we’d stop giving a shit about slave labour in pretty short order. 

elijahg

Rayz2016 said:

badmonk said:

In reading the article, it looks like Apple attempted to affect change but was stymied in certain situations when they had few suppliers.

There is always room for improvement but I think Apple probably does a better job monitoring the conditions of it’s workers in it’s contracted supply lines than most other companies.  The stories of workers in the Bangladesh clothing factories, South China sea fisheries are horrendous and I suspect most manufactured goods that we don’t think twice about in our daily consumption (especially food and clothing) are made in worse conditions. 

So what is the alternative?  Buy from companies that manufacture budget electronics which conduct no oversight whatsoever when they make slipshod products that have short lives and accelerate e-waste and human misery?

That’s not a good option.  One needs to be mindful about our actions as consumers and make the best informed decisions we can.  For me that still means buying Apple products and using them as long as possible and disposing of them wisely.

Well, yeah. A lot of this read as though the writer was a little desperate. When I read it, I thought that Apple had balanced things as well as it could without impacting customers. 

Because you can guarantee that if we started getting poor quality components  or couldn’t get our gadget fix, we’d stop giving a shit about slave labour in pretty short order. 

Speak for yourself.

radarthekat

I’ll tell you what this means.  It means it’s damn hard to change the world for the better.  I don’t see too many others attempting to do so at the level of Apple’s efforts.  I give the company credit for sticking  it’s neck out there with a hard line on labor issues, knowing it’s going to get glanced by an ax often.  But I guess some see the world in black and white terms; since Apple drew a hard line it should go out of business when that line is crossed.  Maybe, just maybe, Apple thinks that continuing to ship products and book revenue and profits gives it more leverage than if it fell on its sword each of the many times one or another supplier decides to cheat the rules.  

svanstrom

radarthekat said:

I’ll tell you what this means.  It means it’s damn hard to change the world for the better.  I don’t see too many others attempting to do so at the level of Apple’s efforts.  I give the company credit for sticking  it’s neck out there with a hard line on labor issues, knowing it’s going to get glanced by an ax often.  But I guess some see the world in black and white terms; since Apple drew a hard line it should go out of business when that line is crossed.  Maybe, just maybe, Apple thinks that continuing to ship products and book revenue and profits gives it more leverage than if it fell on its sword each of the many times one or another supplier decides to cheat the rules.  

The counter-argument to that could of course be: If Apple really cares, why don't we see them invest in their own factories where they would be in complete control (including what jurisdiction they chose to place it in)?

doggone

When Pharma companies outsource R&D to China they have monitors embedded into the site.  This is necessary to ensure the work is done correctly and there is no fraud in generating data when developing molecules.
Apple could use the same approach - have Apple personnel on site to monitor activity, identify issues as they occur as well as work on long term issues that take time to resolve.  Apple already have engineers on site so they know how to do this.  Even if the cost was in the hundreds of millions, the effect on the bottom line would be minimal.  

fallenjt

At the end of the day, profits override everything. Apple can’t do much since there’re nit many alternatives suppliers. Apple should have known the Chinese: once they have upper hands, they don’t give a shit because they know you need them.
it continues so until Apple pulls out the country. Nothing Apple and others can do... 

wood1208

Let Apple and Chinese authority worry about it. Why others keep poking unnecessarily ? If you care so much than go take your Savings, sell your assets,(and sell your extra kidney on black market), take that money and give it to them.

lkrupp

svanstrom said:

Truth is that Apple would be f*cked if they straight up just left China; and if they don't leave China they will keep on finding human rights issues.

So what to do?

At what point will we consumers walk away from Apple if they don't move more of their production out of China?

Aaaaand… even if they move their production out of China, does that really help if the factories are still owned by Chinese companies. (Like with the AirPods Max: https://appleinsider.com/articles/20/12/10/apple-airpods-max-are-made-in-vietnam-but-still-by-chinese-firms.)

So what other manufacturers are you willing to walk away from in addition to Apple? Nearly all manufacturing worldwide happens in China now. We were in the market for a new vacuum cleaner and I read the list of American brands, almost all of which have moved or are going to move manufacturing to China.

So don't you think you’re being hypocritical by singling out Apple for abandonment? As I said in another post, neither you nor anyone else is going to walk away from Apple because you have no other manufacturer to go to. All you are going to do is cluck your tongue, shake your head, and continue to buy Chinese manufactured goods.

Oh and the vast majority of prescription drugs are manufactured in and imported from China. Will you be walking away from your life-sustaining drug too?

DAalseth

"Reportedly", meaning a couple of groups that won't be satisfied with anything less than perfection, and want their name in the news,  want to see more. 

lkrupp

DAalseth said:

"Reportedly", meaning a couple of groups that won't be satisfied with anything less than perfection, and want their name in the news,  want to see more. 

Activist groups trying to get the world’s attention, much like Mike Daisy. They know they get more bang for the buck by attacking Apple rather than say Samsung, Huawei, Google, HP, Lenovo, Epson, Brother or any of the tech brands that manufacture in China. Those brands are simply not as important as attacking the world’s largest corporation , one who actually tries to stand for something. Whether it’s alleged forced or child labor in China, Lithium  and rare Earth mines in Africa, environmental issues, etc., the activist groups always start by dragging out Apple props to burn in effigy. Hell, even when Apple was ‘beleaguered’ and on a death spiral they were targeted.

svanstrom

DAalseth said:

"Reportedly", meaning a couple of groups that won't be satisfied with anything less than perfection, and want their name in the news,  want to see more. 

The perspective here being that reported facts matters less than your personal annoyance with one of the words used in the title? That one word just makes the whole thing be rewritten with whatever you make up in your head?

bestkeptsecret

svanstrom said:

radarthekat said:

I’ll tell you what this means.  It means it’s damn hard to change the world for the better.  I don’t see too many others attempting to do so at the level of Apple’s efforts.  I give the company credit for sticking  it’s neck out there with a hard line on labor issues, knowing it’s going to get glanced by an ax often.  But I guess some see the world in black and white terms; since Apple drew a hard line it should go out of business when that line is crossed.  Maybe, just maybe, Apple thinks that continuing to ship products and book revenue and profits gives it more leverage than if it fell on its sword each of the many times one or another supplier decides to cheat the rules.  

The counter-argument to that could of course be: If Apple really cares, why don't we see them invest in their own factories where they would be in complete control (including what jurisdiction they chose to place it in)?

Mainly because the prices of Apple devices would sky-rocket to the point of a steep drop in sales. If you think people are whining about "Apple Tax" now, watch all hell break loose if Apple built their own factories (preferably) in the US, hired American workers and priced the devices accordingly.

Apple is probably trying to diversify its supply chain, but as long as it has to depend on Asia, be it China, or Vietnam, or India, they are at the mercy of local policies that override anything they can fully implement. And Apple has to depend on Asia because it is just not feasible to move to the US.

svanstrom

bestkeptsecret said:

svanstrom said:

radarthekat said:

I’ll tell you what this means.  It means it’s damn hard to change the world for the better.  I don’t see too many others attempting to do so at the level of Apple’s efforts.  I give the company credit for sticking  it’s neck out there with a hard line on labor issues, knowing it’s going to get glanced by an ax often.  But I guess some see the world in black and white terms; since Apple drew a hard line it should go out of business when that line is crossed.  Maybe, just maybe, Apple thinks that continuing to ship products and book revenue and profits gives it more leverage than if it fell on its sword each of the many times one or another supplier decides to cheat the rules.  

The counter-argument to that could of course be: If Apple really cares, why don't we see them invest in their own factories where they would be in complete control (including what jurisdiction they chose to place it in)?

Mainly because the prices of Apple devices would sky-rocket to the point of a steep drop in sales. If you think people are whining about "Apple Tax" now, watch all hell break loose if Apple built their own factories (preferably) in the US, hired American workers and priced the devices accordingly.

As a general rule you are absolutely right.

Most people don't know that depending on the business even something as small as a using a 1 USD more expensive chip could make a device 20 USD more expensive to the buyer; all according to some easy to see logic, once you're into that type of stuff.

But… take a look at the Apple numbers, and here's a local start: https://appleinsider.com/articles/20/10/31/examining-apples-impressive-647b-fourth-quarter-by-the-numbers

"Apple now has $191.83 billion in cash on hand": https://www.cnbc.com/2020/10/29/apple-q4-cash-hoard-heres-how-much-apple-has-on-hand.html

Apple has such huge resources, and profit margins, that they simply don't have to play by the usual rules as far as markup; in fact, with these profits they've already deviated (but in their own favour).

So if Apple really wanted to they could be much more aggressive about human/employee rights, because they have the resources to handle the situation if a company were to call what they think is a bluff. Apple could insist on having their own security sent in to every day check that the local factories don't employ children, and they could insist on paying the staff directly themselves.

And Apple could very much start to build their own factories in other regions. It doesn't have to be a Chinese company building and running a factory in Vietnam, it could be Apple doing things like that.

Aaaand… these factories are not non-profit organisations selling their services at a loss to Apple; so we're talking about Apple taking their huge profits, and investing those into profitable businesses that don't exploit children and the poor. Which very much would be on brand with Apple trying to appear for equality and human rights etc.

avon b7

Perhaps stepping back a bit and looking at what has happened in China over the last 30 years would help.

China has changed radically in that time. The optimist in me says things are improving across the board in many sectors but there are still many issues to be improved.

This is exactly the same as has happened virtually everywhere else although it probably took far longer in other countries.

Child labour in the US for example only gained federal regulation in 1938 IIRC. 

The west, to this day, is still fighting for true equal rights in labour terms.

Apple is doing what it sees as best on the bigger picture. It could probably do more but change takes time. 

GeorgeBMac

So, It's complicated.

So, it's not black and white

So, it's not real clear

One would never know that listening to the haters, the ideologues and propagandists.....

THEN we get to comparing conditions in other countries (including the U.S.) to those of China and the whole thing devolves into a ball of grey mush with no clear answers.

But, the haters, the ideologues and the propagandists will persist in trying paint everything as black versus white, right versus wrong....   It's just how they operate.

tzeshan

This story repeat a thing that happened seven years ago. LOL And they want to making using underage workers a big crime! From the history of the Chinese Exclusion Act enacted over one hundred years ago we know this is an issue by labor unions. American workers are not happy because Chinese worker are willing to do a job for less pay. The Workers Party forced congress to pass a racial discrimination law that last over half century. The same history is repeating itself. Do they ask the teenagers why they worked in the factory? They didn't. This make suspicious this is a tactic used by labor unions.