Apple Halts Cooperation with Equipment Manufacturer due to Labor Infractions
Apple has temporarily distanced itself from a major manufacturing ally following allegations of concealing numerous student labor violations in several of its China-based facilities, according to The Paper. The Taiwanese corporation, Pegaton, which manufactures sought-after tech products like iPhones, MacBooks, and iPads, is in question for deceitfully classifying student interns at its Shanghai and Kunshan locations, resulting in night shifts, overtime, and performing tasks unrelated to their main field of study. These actions are against Apple's stringent Code of Conduct for its partners.
The misconduct was initially uncovered during Apple's scrutiny of its own student work programs. Despite refusing to disclose the exact number of students implicated, Apple confirmed that it failed to unearth any evidence of forced or underage labor in these facilities. Apple cautiously placed Pegatron on probation, requiring the firm to rectify the situation before resuming normal business relations. In response to Apple's actions, Pegatron fired the manager involved in the cover-up and offered financial compensation to the affected students.
Pegatron has faced previous reprimands for similar misconduct in 2013, when China Labor Watch exposed their Shanghai facilities for employing underpaid interns and subjecting them to grueling shifts that extended beyond 12 hours daily. The mistreatment of interns persisted at least until 2015.
Apple's involvement in questionable labor practices within its far-reaching supplier network isn't unique to Pegatron. In 2010, there was widespread concern over more than a dozen suicides at Foxconn, the key hardware partner, which eventually led Apple to critically examine its primary gadget manufacturing facilities. In 2012, Apple published the names of its suppliers for the first time and disclosed an annual Supplier Responsibility Report (SRR) detailing their progress in addressing these issues since 2007.
[1] Source: Research Study on Apple’s Supply Chain and Labor Practices[4] Source: Tata Electronics aquires Pegatron stake in India, positioning itself as second-largest Apple supplier in the country. (Tech Crunch, 2019)
Apple has expressed concerns over potential technology violations in Pegatron's operations, as the Taiwanese company is accused of misclassifying student interns in their Shanghai and Kunshan facilities, leading to labor violations such as night shifts, overtime, and tasks unrelated to their fields of study. The tech giant is providing subsidies to Pegatron, asking them to rectify these issues before resuming their business relationship.
Apple's future manufacture of sought-after tech products like iPhones, MacBooks, and iPads might be affected by these allegations, as the company is keen on maintaining its stringent Code of Conduct for its partners. Despite earlier reprimands in 2013, Pegatron has failed to fully address the issue of mistreating interns, who were reportedly subjected to grueling shifts and underpaid wages.
The Apple-Pegatron controversy brings forth the need for more detailed scrutiny and transparency in tech companies' supply chains, particularly regarding labor practices. Apple has attempted to mitigate such controversies by publishing an annual Supplier Responsibility Report (SRR) and critically examining its primary manufacturing facilities, such as the widely criticized Foxconn partnership in 2010, which saw over a dozen suicides.
To improve its supply chain responsibilities, Apple has publicly disclosed the names of its suppliers, and in 2012, published its first-ever Supplier Responsibility Report (SRR) detailing the progress made in addressing labor issues since 2007. This proactive approach to corporate responsibility can help Apple and other tech giants maintain their reputation for ethical business practices in the face of challenging labor regulations and public scrutiny.