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Summary:

The Fair Labor Association listed excessive overtime, proper compensation, health and safety risks and communication problems as problems uncovered at three Chinese factories that make Apple products. Foxconn has now agreed to build more housing for employees and reduce working hours and overtime.

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Apple CEO Tim Cook at a Foxconn factory on Wednesday. (Credit: Bowen Liu/Apple Inc. via Bloomberg)

Auditors investigating three Apple factories have published their first report, saying they uncovered “significant issues” with the working conditions there. The Fair Labor Association, of which Apple is a member, listed excessive overtime, overtime compensation, health and safety risks and communication problems as the issues that “led to a widespread sense of unsafe” conditions at all three Foxconn factories in China that make products for Apple and many other consumer electronics brands.

At the same time, the FLA said it secured a commitment from Foxconn to pay back any overtime that was not properly compensated, build more housing for employees and reduce working hours to meet the legal Chinese limit of 49 hours per week, which includes overtime. Overtime hours will be cut from 80 to 36. Though they’ll be working less, Foxconn promises the FLA that it will “develop a compensation package that protects workers from losing income.” The manufacturer will also hire more people to make up for reduced labor hours of its current employees. Foxconn has agreed to do this by July 2013.

FLA president and CEO Auret van Heerden said in a press release:

“The Fair Labor Association gave Apple’s largest supplier the equivalent of a full-body scan through 3,000 staff hours investigating three of its factories and surveying more than 35,000 workers. Apple and its supplier Foxconn have agreed to our prescriptions, and we will verify progress and report publicly.”

Apple joined the FLA in January, and in February, following the outcry sparked by a series of reports about the conditions under which iPhones, iPads and iPods are produced, Apple promised that the FLA would do a full audit of the Foxconn facilities. Foxconn, one of Apple’s most important contract manufacturers, employs 1.2 million people. The factories surveyed are in Guanlan, Longhua and Chengdu, China.

The problems

Here’s a rundown of the most significant problems uncovered in the audit:

  • In the last year, all three factories had employees working more than 60 hours per week (that’s regular time plus overtime). At some points, some employees worked more than seven days in a row missing the required 24-hour off period.
  • 14 percent of workers were not paid properly for unscheduled overtime, and that overtime was paid in 30-minute increments, meaning 29 minutes worked extra resulted in no overtime pay.
  • 64 percent of employees told the FLA that the money they make does not “meet their basic needs.” The FLA says it’s going to help Foxconn determine the cost of living near its factories to  see if it needs to adjust compensation.
  • More than 43 percent of Foxconn employees either experienced or witnessed an accident at work — the FLA says these accidents included hand injuries and factory vehicle accidents.
  • Safety risks like blocked exits, missing or faulty protective equipment and missing permits were found, but the FLA says these were “immediately corrected.”
  • Foxconn did not allow any “true worker representation.” From now on, Foxconn says it won’t interfere with the elections of any such representatives.

Foxconn was up first, but Apple said earlier this year that the factories of both Quanta and Pegatron, two other manufacturers that produce Apple products, would get a visit from the FLA “later this spring.”

  1. Erica, do you feel it’s fair to focus on Apple, when Foxconn makes products for all major players, and shouldn’t Apple be commended for actually doing something about the conditions?
    http://scottsscripts.wordpress.com/

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    1. Well, this audit was initiated by Apple, so in the case of writing about what the FLA found, it’s natural to focus on them.

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      1. Thanks for the reply Erica!
        I may have worded my questions the wrong way: I’m asking if you think it’s fair that all the public focus is on Apple, who argueably are doing more than all the other players, when all of them use Foxconn, or worse factories, to make their goods.
        It just seems interesting that no one talks about the “efforts” of the other big companies like HP, Asus, Acer, Samsung, Sony, etc.

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      2. Also consistent with Apple’s periodic review of suppliers. Though 99% of articles about the FLA commission will ignore that – or be written by folks simply ignorant of the whole context.

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    2. Hi Scott, I agree with you that it’s not fair to talk about the problems at Foxconn as if Apple is their only customer. They clearly are not. But they are the biggest, most important and most powerful customer, so it’s not illogical for people to focus on or wonder what Apple can do about the conditions at Foxconn. And you’re right…it’s not like Foxconn’s other customers are asking for high-profile audits. Apple carries a lot of weight, so trying to improve the working conditions at these factories is good — and something they should do.

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      1. Hi Erica, I agree. Apple should do as much as they can, and it’s my understanding that they are doing so. Thanks!

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