Apple sees uptick in supplier labor problems in annual audit

The number of “core violations” of labor rules doubled at suppliers, many of which were new to Apple’s supply chain.

BY STEVEN MUSIL, Mar 7, 2018

Apple uncovered a higher number of serious labor and human rights rules violations at its supplier facilities in 2017, the company said Wednesday in its annual audit of its supply chain.

Apple identified 44 “core violations” of labor rules, according to its 12th annual Supplier Responsibility Progress Report (PDF), double the number it reported last year. Included in the report were three debt-bonded labor violations, two underage labor violations and 38 violations of falsifying work hours data.

Still, Apple said it found a higher level of compliance with its Supplier Code of Conduct during its review of 756 suppliers in 30 countries. Apple said 197 of those assessments were at new facilities to its chain it had never visited before.

The proportion of “low performers,” or suppliers scoring less than 59 points on Apple’s 100-point scale, fell to 1 percent in 2017 from 3 percent in 2016 and 14 percent in 2014. Supplier compliance with Apple’s 60-hour work week limitation fell to 94 percent in 2017 from 98 percent a year earlier, although some of that may be attributable to the number of new suppliers in the chain this year.

In one instance of debt-bonded labor uncovered by Apple, more than 700 workers recruited from the Philippines paid placement fees of more than $1 million to work for an Apple supplier. Apple made sure that every worker was reimbursed for the fee.

Apple said the two underage workers were 14 and 15 and had used false identification to gain employment. After the violations were detected, both were transported home and enrolled in school while still continuing to receive pay from the supplier.

The report also highlighted the efforts the company is making to improve the lives of employees in its supply chain. Apple said it had launched a womens’ health care education program at its supplier plants, with a goal of training 1 million women to focus on their personal health.

“We believe that everyone making Apple products deserves to be treated with dignity and respect and we’re proud that almost 15 million people understand their workplace rights as a result of the work we’ve done over the years,” Apple COO Jeff Williams said in a statement. “We’re going further with health education programs and new opportunities for advancement at our suppliers.”