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Explained: Here is how Apple’s reaction to labour challenges in India is different from China

Apple has taken stringent action against one of its vendors, Wistron, in Karnataka. What happened at the Narasapura facility that led to this? Is the company's reaction different compared to China?

Written by Aashish Aryan , Edited by Explained Desk | New Delhi | Updated: December 24, 2020 7:17:53 am
Like the other contract manufacturers of Apple, Wistron is also involved in production of its flagship iPhones. The factory in Narasapura is the a new unit from where it had started assembly of the iPhone SE (2020). (Image source: Bloomberg)

Global software and hardware conglomerate Apple on Saturday took a stringent action against one of its vendors, Wistron, by acknowledging that the latter had violated supplier code of conduct by “failing to implement proper working hour management processes”. The statement by Apple was preceded by another statement from its vendor Wistron, which also acknowledged the lapses on its behalf at its Narasapura facility in Bengaluru.

What happened at Wistron’s Narasapura facility?

On December 12, temporary workers employed at Wistron’s Narasapura facility in Bengaluru raised slogans and vandalised vehicles parked inside the factory premises. These workers were protesting against non-payment of regular and overtime dues by the company.

The workers started throwing stones, and damaged some vehicles inside the factory. Some iPhones, which had been manufactured at the factory and were kept for export, were also looted by the workers, according to reports.

While the state government authorities arrested some of the workers involved in the protests, Wistron in its initial statement said it had followed all laws and was supporting the authorities in their investigation, Apple said it had “ immediately launched a detailed investigation at Wistron’s Narasapura facility in India”.

Like the other contract manufacturers of Apple, Wistron is also involved in production of its flagship iPhones. The factory in Narasapura is the a new unit from where it had started assembly of the iPhone SE (2020). The original iPhone SE was the first iPhone to be made in India and now there are four models being produced here, including the iPhone 11.

The plant is spread over 43 acres, and was built with an investment of Rs 3,000 crore. This is a new unit, which was opened in July this year. The other unit in Bengaluru is in the Peenya locality of the city’s outskirts, from where Wistron has been producing iPhone SE models since 2017.

The Narasapura unit employs about 2,000 regular employees and some 7000 contractual employees, while the old Peenya unit employs about 3,500 people on a permanent basis. The flagship iPhones produced at the Narasapura and Peenya unit are also exported to other countries across the world.

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What is the status now?

A week later, after the initial investigations in the issue have been done, both Wistron and Apple have acknowledged the “lapses” in payment and work schedules. Even the state government agreed that contractual workers at the plant had not been paid regular and overtime dues over the past three-four months.

In its statement on Saturday, Wistron said that during its investigations it had found that some workers were not paid correctly, or on time. The company also said that it had fired its vice-president who was overseeing the business in India. The mistakes made, Wistron said in its statement, were as they expanded.

“Some of the processes we put in place to manage labor agencies and payments need to be strengthened and upgraded. We are taking immediate action to correct this, including disciplinary action,” Wistron said.

On the other hand, Apple, for whom Wistron makes iPhone and other gadgets from its Narasapura unit, said that they had placed “Wistron on probation and they will not receive any new business from Apple before they complete corrective actions”.

Is Apple’s reaction to labour issues different in India compared to China?

Outside of the US, China has until remained one of the largest workplaces for Apple. Three of its biggest vendors, Pegatron, Foxconn and Wistron have huge factories dedicated exclusively to the manufacturing and assembly of iPhones, iPad, iWacthes and a range of other Apple products. All these vendors employ thousands of people on assembly and production lines for Apple products.

As early as 2010, there have been allegations of serious labour law violations against Apple’s suppliers and vendors, including Foxconn, Pegatron and Wistron. In 2011, an explosion at Foxconn’s Chengdu unit had left 4 workers dead and injured about 18 others. In the same year, another explosion at one of the units of Pegatron, another Apple supplier, left 59 workers injured, the Chinese media reported.  

China Labour Watch, an independent not-for-profit organisation, which has since 2010 tracked Apple and its vendors’ labour laws and the alleged violations has repeatedly raised questions about the working conditions inside the factories of these companies.

As early as 2013, the agency had flagged the working conditions in Pegatron, one of the major suppliers of Apple. It had in its report said that the hours of work at Pegatron were “working long overtime hours to turn out a scaled-back, less expensive version of the iPhone”.

“Six days a week, the workers making these phones have to work almost 11-hour shifts, 20 minutes of which is unpaid, and the remainder of which is paid at a rate of $1.50 an hour ($268 per month) before overtime. This is less than half the average local monthly income of $764 and far below the basic living wage necessary to live in Shanghai, one of costliest cities in China,” the agency had said in its report.

Six years later, China Labour Watch came up with another report which alleged that while Foxconn violated labour laws in its factories, Apple did nothing to stop it.

“Apple has done very little to improve the rights of workers in their supplier factories. Apple claimed they care about every worker on the production line, but in fact, workers are paid wages that are close to or equivalent to the local minimum wage. It is difficult for workers to sustain their livelihood on the minimum wage,” China Labour Watch said in its latest report.

Though Apple denied all the allegations, it accepted that the company “did exceed the number of contract workers allowed by Chinese law”. Earlier this year in November, Apple also suspended “business operations” with Pegatron after finding out that the company violated Apple’s supplier code of conduct by violating student workers’ programme.

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