Apple Clamps Down on Spike in Supplier Violations

Apple sets labor and environmental policies for suppliers in its global supply chain, one of the largest and most complex in the world. Every year for over a decade, the company has reviewed conditions of workers putting together everything from its smartphones to the long wooden tables in its retail stores.

On Wednesday, Apple said in its latest Progress Report on Supplier Responsibility that overall compliance was high. But it also uncovered an increase in labor violations at the factories where its products are manufactured. Most of the facilities in Apple’s supply chain are owned by contractors in China, India and other countries.

Apple said that the suppliers in its manufacturing supply chain employ about 3 million workers. The annual report, which was first published in 2005, assessed 756 suppliers in 30 countries. Apple graded them based on labor conditions for workers, environmental responsibility, and even record keeping.

The company said that it had unearthed 44 core violations of its labor policies, double the number in 2016. These violations are more severe than what Apple terms violations or administrative non-compliance. They range from underage and bonded labor to falsifying employee work hours.

The report indicated that 38 of the 44 core violations were for falsifying work hour data. The company said that it put all the offending suppliers on probation for using the tactic to skirt its 60-hour work week policy and alerted the chief executives of all the companies. In 2016, Apple found just nine of these types of violations.

For Apple, the increase was a result of expanding the audit to include the working hours of 1.3 million supplier employees, up from 1 million in 2012. In addition to hiring many new suppliers over the last year, the company also said that it visited 197 facilities for the first time in 2017.

The violations included three cases of bonded labor, a practice that Apple banned in 2015. It involves companies forcing workers to pay excessive fees for a job. In one instance, a supplier charged over 700 workers recruited from the Philippines about $1 million in job placement fees. Apple forces suppliers to repay the fees and subject to regular audits.

Serious infractions were limited, though. Apple said that 59% of the factories it reviewed scored higher than 90 on its 100-point scale, up from 47% the previous year. Only 1% were low performers with scores of 58 or less, down from 3% in 2016 and 14% in 2014. Apple works with these suppliers to coach them on compliance.

“We know our work is never done and we’re committed to raising the bar every year across our supply chain,” said Jeff Williams, Apple’s chief operating officer, in a statement. Williams was hired in 2010 – the same year that the company began mapping the conflict minerals in its supply chain back to metal refiners and smelters.

On Wednesday, Apple also announced a program to help improve health awareness for women with a goal to reach 1 million women in its supply chain by 2020. The company said that it introduced a program last year to train workers to become factory line leaders.

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