Apple supplier’s labor practices in China back under scrutiny after report

ALY SONG/REUTERS - A man looks at his Apple iPad in front an Apple logo outside an Apple store in downtown Shanghai in this March 16, 2012 file photo.

Labor practices at Apple suppliers are under the microscope again following a Monday report from China Labor Watch that alleges several serious labor violations at factories run by Apple supplier Pegatron.

The report alleges several violations at Pegatron facilities, including hazardous work environments, cases of underage labor and insufficient wage compensation. The study, which includes eyewitness accounts from a China Labor Watch investigator who took a job in a Pegatron factory, described poor working and living conditions, difficult restrictions for getting time off and harsh penalties for taking leave.

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Apple spokesman Steve Dowling told The Washington Post that the company is “committed to providing safe and fair working conditions throughout” its supply chain and has conducted 15 comprehensive audits of Pegatron facilities in the past.

China Labor Watch tied its report to speculation that Apple is looking to launch a cheaper smartphone soon. The company’s latest earnings report indicated that cheaper versions of the iPhone, such as the iPhone 4, have been driving Apple growth in places such as India and Turkey. That’s fed previous rumors that the company has already started researching and producing a less costly iPhone — a development the China Labor Watch report appears to take as fact.

“As Apple launches its cheaper iPhones, it continues to profit while cheapening the value of the workers in its supply chain,” the report said.

Apple began facing serious questions about its suppliers’ labor practices in China after a 2011 rash of worker suicides at Foxconn, which assembles products for many technology companies and is a chief Apple supplier. Since then, the company has pledged to improve worker conditions within its supply chain and has joined the Fair Labor Association, a labor group that conducts independent audits. Apple has released information about its suppliers and labor violations in its supply chain since 2007, and last year disclosed the full list of its suppliers. Apple’s own report does not say which facilities were found guilty of which violations.

While much of the scrutiny of labor practices in tech supply chains has focused on the conditions at Foxconn, this is not the first time Pegatron’s practices have drawn concern. In 2011, an explosion at a Shanghai Pegatron factory injured dozens of people, and the company is still facing questions about whether it adheres to Chinese labor standards.

The report also claims that Pegatron forces workers to underreport overtime hours, does not provide proper safety training for its workers and that company subsidiaries dispose of waste water in a way the pollutes the local water supply.

In a statement Monday, Pegatron chief executive office Jason Cheng said that the company “takes these allegations very seriously,” will investigate reports of labor violations and take action to correct any it finds as soon as possible.

Dowling said that Apple has been in contact with China Labor Watch for “several months” and has already moved to stop a Pegatron practice that kept workers from leaving factories. He also said audit teams from Apple are scheduled this week to visit suppliers including Pegatron and two of its subsidiaries mentioned in the report, RiTeng and AVY, to investigate the labor group’s claims.

Dowling added that the company will require Pegatron to reimburse employees for any instances it finds where workers have been underpaid or denied compensation for time worked.

“We will not tolerate deviations from our code,” he said.

 
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