Apple tackles work conditions

Chinese partner agrees to make improvements at its factories

SAN FRANCISCO- In a landmark development for the way Western companies do business in China, Apple Inc said on Thursday it had agreed to work with partner Foxconn to tackle wage and working condition violations at the factories that produce its popular products. Foxconn—which makes Apple devices from the iphone to the ipad—will hire tens of thousands of new workers, clamp down on illegal overtime, improve safety protocols and upgrade worker housing and other amenities. The moves come in response to one of the largest investigations ever conducted of a U.S. company’s operations abroad. Apple had agreed to the probe by the independent Fair Labor Association in response to a crescendo of criticism that its products were built on the backs of mistreated Chinese workers. The association, in disclosing its findings from a survey of three Foxconn plants and over 35,000 workers, said it had unearthed multiple violations of labour law, including extreme hours and unpaid overtime. Apple, the world’s most valuable corporation, and Foxconn, China’s biggest privatesector employer and Apple’s main contract manufacturer, are so dominant in the global technology industry that their newly forged accord will likely have a substantial ripple effect across the sector. Working conditions at many Chinese manufacturers that supply Western companies are considerably inferior to those at Foxconn, experts say. “Apple and Foxconn are obviously the two biggest players in this sector and since they’re teaming up to drive this change, I really do think they set the bar for the rest of the sector,” said FLA president Auret van Heerden.

The Apple-foxconn agreement may also raise costs for other manufacturers who contract with the Taiwanese company, including Dell Inc, Hewlett-packard, Amazon.com Inc., Motorola Mobility Holdings, Nokia Oyj and Sony Corp.

The agreement could result in higher prices for consumers, though the impact will be limited because labour costs are only a small fraction of the total cost for most high-tech devices.

“If Foxconn’s labour cost goes up . . . that will be an industry-wide phenomenon and then we have to decide how much do we pass on to our customers versus how much cost do we absorb,” HP chief executive Meg Whitman told Reuters in February.

Foxconn said it would reduce working hours to 49 hours per week, including overtime, while keeping total compensation for workers at its current level. The FLA audit had found that during peak production times, workers in the three factories put in more than 60 hours per week on average.

To compensate for the reduced hours, Foxconn will hire tens of thousands of additional workers. It also said it would build more housing and canteens to accommodate that influx.

Apple CEO Tim Cook, who company critics hoped would usher in a more open, transparent era at Apple after he took over from the late Steve Jobs last year, has shown a willingness to tackle the global criticism head-on.

“We appreciate the work the FLA has done to assess conditions at Foxconn and we fully support their recommendations,” Apple said in a statement.

“We share the FLA’S goal of improving lives and raising the bar for manufacturing companies everywhere.”