Apple Inc ignored breaches of China’s temporary worker law in its supply chain for years because it was concerned about increased costs and product launch delays, The Information reported.
Foxconn, Pegatron, and Quanta Computer, three of Apple’s major assembly partners, faced difficulties complying with the law between 2013 and 2018, The Information said, citing internal company documents. The rule states that only 10% of a workforce can be temporary. Last year, Bloomberg reported that Foxconn violated this for the production of the iPhone 11.
In 2014, more than half of a surveyed 362 suppliers broke the temporary worker law, and in March 2015, 81 of 184 Apple suppliers topped the 10% threshold, according to The Information. That continued in parts of 2016, 2017 and 2018, the website said. In 2014, Apple gave suppliers two years to mitigate the issues, but by 2016 little progress had been made, The Information reported.
Apple executives knew that its production strategy increased demand for temporary staff, known as dispatch workers, The Information reported, citing internal data it obtained.
After Apple commissioned a two-year study with Pegatron, Apple researchers recommended raising salaries, building better dorms, reducing the use of dispatch workers and not hiring workers younger than 23 years old. However, three ex-Apple employees said senior Apple executives were reluctant to push Pegatron to make changes as they wanted to let supply and demand determine China’s labor market conditions, The Information reported.
“Apple is dedicated to ensuring everyone in our supply chain is treated with dignity and respect,” Apple said in a statement. “Workplace rights are human rights and our Supplier Code of Conduct is the strongest in the industry, and it applies equally to everyone across our supply chain.”
“Occasionally factories use temporary labor and we monitor this closely to ensure compliance with our Code,” Apple added. “Where we find issues we work closely with the supplier on corrective action plans. As always, our focus is on making sure that everyone in our supply chain is protected and treated with dignity and respect.”
The company said it assesses suppliers, including through surprise audits, and evaluates more than 500 criteria to ensure compliance. Apple said it conducted 1,142 assessments last year, including at final assembly factories. It also interviewed over 50,000 supply chain employees.