Apple claims progress in supply chain, no child labor cases

Apple Inc., which has come under fire for the behavior of its suppliers, reported progress among its manufacturing partners during the tumultuous year of the coronavirus pandemic as it released a supply-chain responsibility report.

The Cupertino, California-based firm said improvements include a reduction in major violations of its code of conduct and no cases of child labor. The 113-page report covers a range of issues, from the treatment of workers to energy usage and infectious disease policies in the wake of Covid-19. It did cite several examples of suppliers failing to fulfill their duties and non-compliance with Apple’s working-hours policy.

The company also stopped providing specific addresses for supplier facilities in the latest list of contractors it works with, information it had provided in the past for transparency.

Over the course of the pandemic-challenged year, Apple conducted 1,121 assessments across 53 countries, covering suppliers and assemblers as well as smelters and refiners. The company interviewed 57,618 workers to confirm their experience matched what management reported and followed up with a majority of them to ensure there was no retaliation. It also did more than 100 assessments without giving prior notice to the supplier.

Having discovered one case of underage labor in 2019, the company reported no such cases in 2020. It did, however, find an instance where a “supplier had misclassified the student workers in their program and falsified paperwork to disguise violations,” including allowing students to work nights and overtime. Apple placed the supplier on probation and halted “new business from Apple until they completed all required corrective actions.”

In November, Apple said it had suspended new business with iPhone assembler Pegatron Corp. after discovering labor violations at a student worker program.

In 2020, Apple rejected 8% of prospective suppliers -- covering both new suppliers and new facilities from established partners -- due to potential compliance issues. The company reported it has 93% compliance with its working-hours code, which stipulates working weeks should not exceed 60 hours and overtime should in all cases be voluntary.

The most serious violations of Apple’s code of conduct fell to nine instances in 2020, down from 2019’s 17 and a significant improvement on the 48 in 2017. Seven of the most recent cases related to working hours or labor data falsification, one was a wastewater violation and another was an air emission infraction.

One Apple supplier, Ofilm Group Co., came under criticism for allegations it’s involved in a Chinese government program that transfers ethnic minorities from Xinjiang to other parts of the country for work. Bloomberg News reported in March that Apple had severed ties with Ofilm.

Six iPhone manufacturing facilities reduced their energy usage by 20% in 2020 relative to 2017. Apple said it’s developing similar initiatives to improve efficiency around the production of its other popular products.

Apple has trained 21.5 million supplier employees on their rights since 2008 and over the past year it started developing a mobile platform to deliver such training directly to workers’ phones. The training will be delivered in their native language. Apple also convinced suppliers to implement 3,173 actions to address feedback it gathered by surveying their employees -- that included adding shuttle buses, reducing work grievance response times and increasing bonuses.”

In one case, Apple claimed it pressed a supplier into reimbursing workers for recruitment fees they had paid to labor agencies, a practice prohibited by Apple standards. The contractor agreed to repay nearly $3.4 million to 10,570 workers and implement systems for stopping such behavior in the future.