‘Worse than Foxconn’–Apple’s supplier Pegatron Group

logoCLW(July 29, 2013) Today, China Labor Watch (CLW) published an investigative report detailing the labor violations of three factories of Pegatron Group, a major supplier to Apple. In 2013, Apple has increased its orders to these factories, which have benefitted from and relied upon labor violations to increase their competitive edge.

CLW’s investigations revealed at least 86 labor rights violations, including 36 legal violations and 50 ethical violations. The violations fall into 15 categories: dispatch labor abuse, hiring discrimination, women’s rights violations, underage labor, contract violations, insufficient worker training, excessive working hours, insufficient wages, poor working conditions, poor living conditions, difficulty in taking leave, labor health and safety concerns, ineffective grievance channels, abuse by management, and environmental pollution.

In short, the Pegatron factories are violating a great number of international and Chinese laws and standards as well as the standards of Apple’s own social responsibility code of conduct. Continue reading

Labor Wins—in China

by Harold Meyerson

Harold Meyerson

Harold Meyerson

Is China moving ahead of the United States on worker rights? According to a report on Monday’s Financial Times, it may be doing just that.

The FT reports that Foxconn, which employs 1.2 million Chinese workers who make the bulk of Apple’s products, along with those of Nokia, Dell and other tech companies, has decided to allow its workers to hold elections to select their union leaders. This is a radical departure from past practice in China, where unions are run by the government—that is, the Communist Party—which customarily selects the union leaders. Often, the leaders selected under this system are actually the plant managers.

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Large-Scale Strike Paralyzes Production of Apple iPhone5 at Zhengzhou Factory

by Li Qiang, Executive Director
China Labor Watch

October 5, 2012

Breaking News:

Photograph: Ye Fudao/ Foxconn worker

(New York) China Labor Watch (CLW) announced that at 1:00PM on October 5 (Beijing time), a strike occurred at Foxconn’s Zhengzhou factory that, according to workers, involved three to four thousand production workers. In addition to demanding that workers work during the holiday, Foxconn raised overly strict demands on product quality without providing worker training for the corresponding skills. This led to workers turning out products that did not meet standards and ultimately put a tremendous amount of pressure on workers. Additionally, quality control inspectors fell into to conflicts with workers and were beat up multiple times by workers. Factory management turned a deaf ear to complaints about these conflicts and took no corrective measures. The result of both of these circumstances was a widespread work stoppage on the factory floor among workers and inspectors.

The majority of workers who participated in this strike were workers from the OQC (onsite quality control) line. According to workers, multiple iPhone 5 production lines from various factory buildings were in a state of paralysis for the entire day.  It was reported that factory management and Apple, despite design defects, raised strict quality demands on workers, including indentations standards of 0.02mm and demands related to scratches on frames and back covers. With such demands, employees could not even turn out iPhones that met the standard. This led to a tremendous amount of pressure on workers. On top of this, they were not permitted to have a vacation during the holiday. This combination of factors led to the strike.

That quality control inspectors would also strike is of no surprise. According to workers, there was a fight between workers and quality control inspectors in area K that led to the damage in inspection room CA, the injury of some people, and the hospitalization of others. After this, another similar incident occurred in area K, once again leading to quality control inspectors getting beaten up. Yesterday, inspectors in area L received physical threats. When inspectors reported these issues to factory management, the management simply ignored and turned their back on the issue. For these reasons, all day and night shift inspectors carried out a work stoppage today that paralyzed the production lines.

This strike is simply because these workers just have too much pressure.

A recent article in Talking Union documents, based on investigative research by China Labor Watch and by SACOM, the extremely harsh working conditions under which the Apple iPhone5 has been rushed into massive production at Foxconn’s Zhengzhou factory, where the strike just occurred.  An article posted earlier today reports on the causes of a major riot at another Foxconn factory in Taiyuan where the iPhone5 is also being produced.  Talking Union has also recently posted a background article on how Chinese workers and students are confronting global capitalism at Foxconn, the major link in Apple’s global supply chain.

About China Labor Watch:

Founded in 2000, China Labor Watch is an independent not-for-profit organization. In the past ten years, CLW has collaborated with labor organizations and the media to conduct a series of in-depth assessments of factories in China that produce toys, bikes, shoes, furniture, clothing, and electronics for some of the largest companies. CLW’s New York office creates reports from these investigations, educates the international community on supply chain labor issues, and pressures corporations to improve conditions for workers.

Why Foxconn Workers Rioted in Taiyuan

by Paul Garver

Militarized Security at Taiyuan Foxconn Plant Provokes Riot

During the night of 23-24 September, several thousand assembly workers outfought security guards, overturned police vehicles and damaged company property outside a giant Foxconn factory producing the Apple iPhone5 at Taiyuan in north central China.

Foxconn claimed the riot was a mere dormitory scuffle between workers from two different provinces, but hundreds of photos showing the dramatic actions in the streets outside the factory flooded Chinese Internet sites (most subsequently deleted by government censors).  It required the intervention of some 5000 armed paramilitary forces to put down the rebellion.

The dormitory incident that triggered the riot led to the severe beating of workers by Foxconn security guards (sub-contracted thugs), prompting fellow workers to resist and eventually send the guards into flight.  The militaristic security guards are universally detested by Foxconn workers, who demolished security posts and vehicles during the riot.

Rioting is not the most sophisticated or organized form of collective worker resistance.  But it represents a major step forward from the wave of individual worker suicides of Foxconn workers in 2010.  Workers from other Foxconn plants in Henan, Shandong and Shenzhen provinces posted letters on China’s online forms praising the Taiyuan workers for their courage.
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Apple Launches iPhone5 with Forced Student Labor

by Paul Garver

Photo by Steve Jurvetson/Wikimedia/Creative Common

Rural American schools used to empty out for a few weeks in the fall to allow farm children to help harvest potato or fruit crops for family farmers.

The world has changed. In 2012 students are required to leave classrooms in interior Chinese cities to help with the Apple harvest – specifically to produce the Apple iPhone5, just as their predecessors did in 2011 to assemble the Apple iPhone 4S.

According to Chinese media sources, several vocational schools in the city of Huai’an in eastern China required hundreds of students to work on assembly lines at a Foxconn plant to manufacture cables for the iPhone5. Their teachers told them they would not graduate unless they worked for Foxconn, since “Foxconn does not have enough workers without the students.”

An assembly worker in Zhengzhou, where the iPhone5 is assembled, reported to China Labor Watch last month:
We are now producing the iPhone5. We 87 workers have to assemble 3,000 phones per day, and as our team leader told us, after the new iPhone goes public, we will need t assemble 6,500 phones per day. We are now working more than 10 hours a day. There are many student workers in our production line, all of whom are around 18 years old. They’ve been complaining and demanding to go back to school but are never allowed.

The recent promises Apple and Foxconn made through the audits of the Fair Labor Association to reform its brutal regime for Chinese assembly workers and student “interns” evaporated like smoke under the pressures to launch the iPhone5 as quickly as possible.

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Chinese Students and Workers Confront Global Capitalism at Foxconn

by Paul Garver

Photo by Steve Jurvetson/Wikimedia/Creative Common

If the cotton mills of Manchester exemplied 19th century capitalism and the River Rouge Ford plant symbolized capital’s 20th century stage, its early 21st century embodiment is Foxconn. In its thirty giant  factory complexes  1.2 million young Chinese workers assemble over 50% of all the electronics products consumed over the globe. Armies of young men and women perform monotonous repetitive assembly work under quasi-military discipline for at least 60 hours a week for minimal pay and virtually no social benefits.

Foxconn, controlled by Taiwanese billionaire Terry Gou, is China’s largest exporter and 60th largest global corporation with annual revenues of $79 billion (2010). Its largest corporate customer is Apple, but every other major global electronics company also contracts Foxconn for most of their final assembly tasks. Sophisticated components and parts are manufactured in Korea, Japan, Europe and the USA, shipped to China for final assembly, and then re-exported for sale mainly to more affluent consumers in the Triad (North America, Europe and Japan). About 1% of the cost of your iPhone, iPad or other advanced electronic device goes to pay the wages of the Chinese workers who assemble them, while another 1% goes to Foxconn executives and shareholders.

Foxconn is a linchpin of the most leading edge and most profitable sectors of global capital. Although its own operating profit margins are razor thin, shaved by the constant cost-squeezing of Apple and other corporate customers, Foxconn has made itself indispensable to global capital by fully utilizing its strategic position in China.

But Goliath has feet of clay. Students and scholars from Mainland China and Hong Kong have been struggling to assist Foxconn workers improve their conditions. And they are beginning to win some astonishing victories.  We can help them extend and consolidate those victories.
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FLA Audit shows Few Improvements for Foxconn Workers

by Debby Chan

Hong Kong, 24 August 2012

On 21 August, the Fair Labor Association (FLA) released a verification report on labour practices at three Foxconn factories producing for Apple in China that were the subject of an earlier FLA investigation. In its report, the FLA trumpets the speedy progress at Foxconn in remediating widespread labour rights violations. However the FLA has overstated the improvements at Foxconn.

Firstly, most of the actions completed by Foxconn are changes at the policy level only, but few substantial changes in labour practices were found at this stage.

Secondly, Foxconn has deliberately delayed implementing many of the actions called for in the remediation plan, even those that are almost cost-free.

Thirdly, workers have had no opportunity to participate in the remedial action process. SACOM has repeatedly demanded democratic trade unions at Foxconn as an indispensable step in reforming its labour practices.
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Give Apple Workers a Voice in their Future!

A most unusual joint statement by two major international labor organizations and 3 NGOs demands that Apple respect the rights of Chinese assembly workers to collective bargaining over wages and working conditions.  The statement is signed by the International Metalworkers’ Federation (IMF), International Trade Union Confederation (ITUC), GoodElectronics, MakeITFair, Students & Scholars Against Corporate Misbehaviour (SACOM), and SumOfUs. pdf file here

23 March 2012

 By joining the Fair Labor Association, Apple has embarked on its latest program of auditing its suppliers, ostensibly to investigate and remedy the appalling abuses in its supply chain that have been well documented and widely reported. While Apple claims that it is finally taking the issue seriously, its top-down auditing approach can never be a long-term solution to the systematic violations of labour rights that are occurring every day in the manufacture of electronic products. Indeed, Apple promised in 2006 that auditing would protect the rights of workers in its global supply chain, with results that are all too apparent.

The FLA will likely publish next week some of the results of its audits at Foxconn and the organization will no doubt report that labor rights violations are taking place at these factories. Since violations at Foxconn have been well documented by independent investigators, and in many cases admitted by Apple itself, the FLA could hardly claim that all is well. We also have no doubt that the FLA’s report will be coupled with another round of promises from Apple and Foxconn that they will finally clean up their act. The question, however, is not whether there are severe labor rights problems in Apple’s supply chain. This has been obvious for years. And the question is not whether Apple will promise, again, to fix these problems. They surely will. The question is whether anything will actually change.

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Apple Refuses to Meet With Hong Kong Consumers

by Debby Chan

Protest at Apple Store in Hong Kong

Labour groups and media have been reporting the unethical labour practices at Apple suppliers in China in the past 2 years. Under the intense pressure, Apple joined the Fair Labour Association (FLA) in January 2012 in an attempt to create a transparent and socially responsible image. Regrettably, Students & Scholars Against Corporate Misbehaviour (SACOM) delivered the petition letter to the Apple Store yesterday, Apple refused to receive the letter and called the police to disperse the protesters.

Without a doubt, Apple products are extremely popular all over the world. No Apple consumer would expect the Apple gadgets are produced under sweatshop-like conditions in China. In 2009, over 137 workers in Wintek, an Apple supplier in Suzhou China, were poisoned by n-hexane while cleaning the iPhone touch screens. The victims have written 3 letters to Apple but there is no response from the company. Last year, a deadly explosion occurred in the polishing department of Foxconn’s Chengdu factory. Four workers died and 18 were injured.

Furthrmore, Apple also approves the use of student workers as de facto labour at Foxconn. If students refuse to do internship, they are threatened with not being permitted to graduate from school. The use of student workers is definitely a form of involuntary labour. More importantly, these are not single incidents but systematic problems at Apple suppliers.

 Consumers across the world are disturbed by the deplorable working conditions at Apple suppliers. There are dozens of concerned groups or individuals launched signature campaign on Apple labour practices. One of the groups, Sum of Us, has launched an online signature campaign to urge Apple to make iPhone 5 ethically. As of 22 February, the group has collected over 110,000 signatures to urge Apple. Sum Of Us has called on supporters to deliver signatures to the Apple Store. Yesterday, SACOM supported the initiative and intended to send the signatures to the Apple Store in Hong Kong. SACOM has patiently waited for a representative from the Apple Store to receive the letter for an hour. It was outrageous that Apple refused to accept the letter and called the police to send our group away. Although Apple has joined the FLA as if it is more open to public scrutiny, it simply ignores the petition from 110,000 signatories.

 Apple’s stock surpassed $500 last week and keeps climbing. As the world’s most valuable brand, it can certainly afford to pay a living wage to the production workers. However, Apple fans who demand ethical Apple products are ignored. This demonstrates the arrogance and hypocrisy of the corporation. And the FLA membership does not make any difference to Apple.

Sze Wan Debby Chan is Project Officer for the Hong Kong-based Students & Scholars Against Corporate Misbehavior (SACOM).

Did Apple Supplier Foxconn Raise Wages in China Because of International Pressure?

 by Paul Garver

It was gratifying to read in the New York Times article of 18 February that Apple supplier Foxconn had sharply increased salaries at its plants in China in response to pressures from workers, international markets and concerns among Western consumers about working conditions.  According to MIT economist David Autor, capitalism is supposed to work that way: “As nations develop, wages rise and life theoretically gets better for everyone.”   Autor points out that Western consumers will have to bear the consequences of higher prices for their iPhones and iPads.  (In reality tripling wages for workers assembling Apple products in China, now constituting about 1% of the retail price of an iPad, would barely nudge Apple’s swollen profit margin).

This detailed article by NYT reporters David Barboza and Charles Duhigg is worth reading and mostly gets it right.  They do note that manufacturers in Chinese coastal cities like Shenzhen are desperately trying to recruit new workers, and having to provide higher wages and bonuses as inducements.  They also note that Foxconn is responding to the challenge by moving their factories deeper into inland China, and is talking about installing more robots.

Unfortunately the article exaggerates the extent to which the announced salary increase is a response to international pressure on Apple and Foxconn.  The announced 25% increase applies to only the 400,000 Foxconn workers at its older facilities in coastal Shenzhen, and is mainly in response to an increase in the municipal minimum wage and to soaring inflation in living costs there.  At its new mammoth inland facilities in Chengdu (iPads) and Zhengzhou (iPhones), salaries for an equivalent number of  assembly workers remain much lower. 

In addition, many of the assembly workers in Chengdu and Zhengzhou are so-called “student interns” from local vocational schools, conscripted involuntarily through deals between Foxconn and their school administrations.  Regardless of their field of study (whether it be foreign languages or pharmaceuticals or whatever) the students have been told that they cannot their school certifications unless they go through “internships” that have them working endless hours in Foxconn mega-factories.  Although on a much more massive scale, it is reminiscent of the scandalous treatment of foreign student visitors at the Hershey warehouse in Pennsylvania.

The highly publicized audits of Apple suppliers in China by the Fair Labor Association (FLA) has gotten off to a bad start, when after a one day visit conducted by the Foxconn CEO Terry Guo, FLA  President Aurel van Heerden publicly praised its iPad plant in Shenzhen as “way, way above average.”   Labor rights groups in Hong Kong and the USA have no confidence that FLA audits will change anything on the ground in China.  That is, unless Western consumers in fact begin to effectively demand that their iPads and iPhones not be soaked in the sweat and blood of young Chinese workers.

These comments are based mainly on reports from Students & Scholars against Corporate Misbehavior (SACOM) and from Scott Nova of the Worker Rights Consortium.

 

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