iPhone supplier Foxconn misses labor targets

Foxconn broke overtime restrictions because labor shortages and employee turnover forced remaining staff to work longer hours to meet production targets

Technology giant Apple has been under fire in recent years for its labor practices in facilities around the world. In early 2012, The New York Times published a Pulitzer Prize winning series of reports that exposed poor working conditions in factories that made Apple products.

The reports focused on iPad manufacturing in China, describing harsh labor conditions, safety concerns and difficult work environments. Living conditions, overtime demands and other egregious workplace red flags, like underage workers and falsified records, were documented as well. The report did a lot to bruise the reputation of Apple. The tech giant is now taking steps to improve its track record.

It had been reported recently that Apple supplier Foxconn Technology Group has not complied with Chinese labor law by allowing factory workers to exceed limits on hours even as the company met 99 percent of conditions set out by a monitoring group.  After inspecting assembly lines for 15 months after releasing its final audit in March 2012, the Fair Labor Association observed that restrictions on overtime were broken because labor shortages and employee turnover forced staff to work longer hours.

After a spate of suicides in 2011, last year Apple joined the FLA, leading to inspections at three of Foxconn’s factories in a bid to improve conditions and identify remedial items. Founder Terry Gou raised salaries, hired counselors and increased social activities for the company’s one million workers.

“Because of Foxconn’s weight in the labor market, anything they do tends to have a market-setting aspect to it,” Auret van Heerden, president of the Washington-based labor group, said in a statement. “The government’s limit of 49 hours a week was always a very ambitious goal. They made phenomenal progress in getting to an average of about 52, 53 hours a week.”

During the first audit last year, the FLA found 50 breaches of Chinese regulations and the code of conduct. At the time, Taipei-based Foxconn failed to meet work-hour limits, had inconsistent health and safety policies, and issued unfair overtime pay. In its final report last month, Foxconn was found to comply with 356 of 360 action items, or about 99 percent, with the four remaining issues related to work hours.

“The results of that report demonstrate substantial overall progress by our company in carrying out the 15-month remedial program in many areas,” Foxconn said in a statement. “We recognize that there is more to be done, and that we must continue to sustain this progress.”

Apple CEO Tim Cook has made improving conditions and says the company will suspend business with those that violate its code of conduct. While all workers building iPads and iMacs at the company’s Longhua plant in Shenzhen worked less than 60 hours a week, about 68 percent exceeded the monthly cap of 36 overtime hours. At the Guanlan facility in Shenzhen, where Foxconn assembles iPhones, one third of workers surpassed the 60-hour weekly limit as Apple prepared to release new products. Overall, more than half exceeded the monthly overtime mandate. 

According to Apple, working hours have come down because of its attention to the issue, and the company will continue providing monthly reports on compliance. “We are proud of the progress we have made together with the FLA and Foxconn,” Apple said in an e-mailed statement. “We are committed to reducing excessive overtime even further.”

Apple states on its website, “Workers everywhere should have the right to safe and ethical working conditions. They should also have access to educational opportunities to improve their lives. Through a continual cycle of inspections, improvement plans, and verification, we work with our suppliers to make sure they comply with our Code of Conduct and live up to these ideals.”

The recommended remedies include closer monitoring of work hours on a weekly basis, revising policies and procedures, and better forecasting and production planning.

 

For more on compliance, check out the following stories:

JPMorgan to double compliance budget in 2014

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German company to pay fine in FCPA bribery case

Contributing Author

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Amanda Ciccatelli

Amanda G. Ciccatelli is a Contributing Writer for InsideCounsel, where she covers the patent litigation space. Amanda earned a B.A. in Communications and Journalism from...

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