Apple has released their “Report on iPod Manufacturing,” the contents of which are reprinted verbatim below:
Like many of you, we were concerned by reports in the press a few weeks ago alleging poor working and living conditions at a manufacturing facility in China where iPods are assembled. Our Supplier Code of Conduct mandates that suppliers of Apple products follow specific rules designed to safeguard human rights, worker health and safety, and the environment. We take any deviation from these rules very seriously.
In response to the allegations, we immediately dispatched an audit team comprised of members from our human resources, legal and operations groups to carry out a thorough investigation of the conditions at the manufacturing site. The audit covered the areas of labor standards, working and living environment, compensation, overtime and worker treatment. The team interviewed over 100 randomly selected employees representing a cross-section of line workers (83%), supervisors (9%), executives (5%), and other support personnel (3%) including security guards and custodians. They visited and inspected factory floors, dormitories, dining halls, and recreation areas. The team also reviewed thousands of documents including personnel files, payroll data, time cards, and security logs. In total, the audit spanned over 1200 person-hours and covered over one million square feet of facilities.
To ensure the accuracy of the investigation, the team cross-referenced multiple sources of information from employees, management and personnel records. For example, working hours and overtime reported in the interviews were corroborated with line-shift reports, badge reader logs, and payroll records of those specific individuals to confirm that they were paid appropriately.
We found the supplier to be in compliance in the majority of the areas audited. However, we did find violations to our Code of Conduct, as well as other areas for improvement that we are working with the supplier to address. What follows is a summary of what we’ve learned, what’s already being done in response, and our commitment to future diligence and action.
Labor Standards
The team reviewed personnel files and hiring practices and found no evidence whatsoever of the use of child labor or any form of forced labor. This review included examining security records targeted at discovering false identification papers — an important check for companies serious about preventing illegal employment of any kind.
Working and Living Environment
The manufacturing facility supports over 200,000 employees (Apple uses less than 15% of that capacity) and has the services you’d expect in a medium city. The campus includes factories, employee housing, banks, a post office, a hospital, supermarkets, and a variety of recreational facilities including soccer fields, a swimming pool, TV lounges and Internet cafes. Ten cafeterias are also located throughout the campus offering a variety of menu choices such as fresh vegetables, beef, seafood, rice, poultry, and stir-fry noodles. In addition, employees have access to 13 different restaurants on campus. Employees were pleased with the variety and quality of food offerings.
The supplier owns and leases dormitories that are offered at no charge to employees, provided they help in cleaning common areas to maintain the facility. Workers are not required to live in these dormitories, although the majority do. Our team randomly selected and inspected a wide range of dormitories (both supplier-owned on-campus and off-site leased facilities) that collectively house over 32,000 people. Buildings are separated by gender, with female dorms containing a private bathroom/shower for each room and male dorm rooms typically sharing bathroom/shower facilities. The dorms have TV rooms, potable water, private lockers, free laundry service, and public telephones. Many also have ping-pong and snooker tables, and sitting/reading areas. All of the on-campus dorms have air conditioning. Visitors are permitted in the dorms, although a sign-in process is used for security purposes.
Our audit of on-site dormitories found no violations of our Code of Conduct. We were not satisfied, however, with the living conditions of three of the off-site leased dorms that we visited. These buildings were converted by the supplier during a period of rapid growth and have served as interim housing. Two of the dormitories, originally built as factories, now contain a large number of beds and lockers in an open space, and from our perspective, felt too impersonal. The third contained triple-bunks, which in our opinion didn’t provide reasonable personal space.
To address this interim housing situation, the supplier acquired additional land and is currently building new dormitories. These plans were in place prior to our audit, and will increase the total living space by 46% during the next four months.
Compensation
Our investigation confirmed that all workers earn at least the local minimum wage, and our sample audit of payroll records showed that more than half were earning above minimum wage. Employees also have the opportunity to earn bonuses. In addition, the supplier provides a comprehensive medical plan including free annual checkups.
We did find, however, that the pay structure was unnecessarily complex. An employee’s wage was comprised of several elements (base pay, skill bonus, attendance bonus, housing allowance, meal allowance, overtime), making it difficult to understand and communicate to employees. This structure effectively failed to meet our Code of Conduct requirement that how workers are paid must be clearly conveyed. The supplier has since implemented a simplified pay structure that meets the Code of Conduct.
We also discovered that the process for reporting overtime was manual and monthly, and while not a violation of the Code of Conduct, it was subject to human error and relied too much on memory for dispute resolution. To address this issue, the supplier will link the payroll system and electronic badge system, which will automate the recording of hours worked and pay calculations. This update will be completed by October 1.
Overtime
We found no instances of forced overtime and employees confirmed in interviews that they could decline overtime requests without penalty. We did, however, find that employees worked longer hours than permitted by our Code of Conduct, which limits normal workweeks to 60 hours and requires at least one day off each week. We reviewed seven months of records from multiple shifts of different productions lines and found that the weekly limit was exceeded 35% of the time and employees worked more than six consecutive days 25% of the time. Although our Code of Conduct allows overtime limit exceptions in unusual circumstances, we believe in the importance of a healthy work-life balance and found these percentages to be excessive.
The supplier has enacted a policy change to enforce the weekly overtime limits set by our Code of Conduct. The policy change has been communicated to supervisors and employees and a management system has been implemented to track compliance with the Code of Conduct. Supervisors must receive approval from upper level management for any deviation.
Worker Treatment
Employees work in factories that are generally bright, clean and modern with air-conditioned assembly line areas, and are provided with protective gear. There’s an employee grievance process in place, including a telephone hotline, a CEO mailbox for complaints and employee suggestion boxes.
Our interviews with employees revealed areas of both satisfaction and dissatisfaction. A majority of employees interviewed were pleased with the work environment and specifically noted the opportunity for advancement, widespread year-end bonuses, and the reputation of the supplier in the industry. Additionally, employees consistently mentioned that they felt safe and secure in both the workplace and the dormitories.
Employees expressed dissatisfaction with some aspects of the workplace. The single largest complaint (approximately 20% of interviewed workers) was the lack of overtime during non-peak periods. The second largest complaint (less than 10%) was the transportation schedule for employees living in off-campus dorms, which they felt was inadequate outside of working hours. Results of the interviews have been shared with management, and will be addressed where appropriate. For example, the transportation schedule is being reviewed for adjustment.
During our interviews with employees, we explicitly asked every line worker whether they had ever been subjected to or witnessed objectionable disciplinary punishment. Two employees reported that they had been disciplined by being made to stand at attention. While we did not find this practice to be widespread, Apple has a zero tolerance policy for any instance, isolated or not, of any treatment of workers that could be interpreted as harsh. The supplier has launched an aggressive manager and employee training program to ensure such behavior does not occur in the future.
The Future
Recognizing that some aspects of workplace auditing (such as health and safety) lie beyond our current expertise, we’ve engaged the services of Verité, an internationally recognized leader in workplace standards dedicated to ensuring that people around the world work under safe, fair and legal conditions. We are committed to ensuring compliance with our Code of Conduct and will complete audits of all final assembly suppliers of Mac and iPod products in 2006.
We recognize that monitoring compliance is an ongoing process requiring continual progress reviews. When violations are discovered in any supplier, we will require corrective action plans, with a focus on prevention and systemic solutions. We will also ensure that action plans are implemented and in cases where a supplier’s efforts in this area do not meet our expectations, their contracts will be terminated.
We are encouraged with the actions to date in response to our audit. However, we realize that auditing compliance is only one step in the journey toward driving change. We have also joined the Electronic Industry Code of Conduct (EICC) Implementation Group, which has established industry-wide standards and offers valuable resources for evaluating suppliers. The EICC was a key benchmark when our own Code of Conduct was created and as an industry leader, Apple will make important contributions to this group.
Apple is committed to the highest standard of social responsibility in everything we do and will always take necessary action accordingly. We are dedicated to ensuring that working conditions are safe and employees are treated with respect and dignity wherever Apple products are made.
Source: http://www.apple.com/hotnews/ipodreport/
Related articles:
Should Apple build its own factory in China to manufacture iPods? – July 03, 2006
iPod maker admits breaking Chinese labor laws; says Apple approved sweatshop labor – June 26, 2006
Apple begins ‘thorough audit’ of Foxconn iPod factory – June 20, 2006
Apple iPod manufacturer Foxconn sternly denies iPod sweatshop claims – June 19, 2006
Apple iPod ‘sweatshop’ story a ‘poorly researched sensationalist article’ – June 19, 2006
Apple rebuts Chinese iPod factory claims – June 13, 2006
iPods made in Chinese sweatshops? – June 13, 2006
Apple always setting the standard!
Its nioce to see Apple did follow up on this and made this public for us to see
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I feel secure with them once again.
good job steve.
I read the whole thing at Apple’s site. Very thoroughly and respectfully done. I’m very impressed by how responsive they were to this issue.
Only Apple would go to these lengths. And no, they are not just another company only thinking about money. I learned that lesson a long time ago – when you’re doing something you love, the money part comes easy.
Interesting that the workers complained about not being able to work more overtime and that Apple is mandating less overtime. . .
Still sounds like a prison camp to me.
But they are “just Chinese…they are all worker drones” so who cares :rolleyes:
I’m sure Apple’s labor camps are all appley and fun, but it is what it is.
moiety5: “Interesting that the workers complained about not being able to work more overtime and that Apple is mandating less overtime. . .”
That was “lack of overtime during non-peak periods.” Feast or famine type thing. Prior to Christmas for example you find overtime abuses, prior to nothing in particular workers aren’t needed for overtime. Not uncommon in many businesses.
“Apple has a zero tolerance policy for any instance, isolated or not, of any treatment of workers that could be interpreted as harsh. The supplier has launched an aggressive manager and employee training program to ensure such behavior does not occur in the future.”
We have “zero tolerance” for it, but we’ll let it slide this time. Uh huh. A bit disingenuous, eh?
I find this whole thing just a little pretentious. On the one hand, i don’t want to see workers abused, but on the other hand, who are we to impose our culture onto someone else?
And i can assure you, when i worked at Apple, nobody minded if i put in 80-hour work weeks, or worked on weekends. And i was salaried, so i never got any extra pay for it. Seems to me that these folks are adults. If they choose to work overtime, that’s their business, not Apple’s.
So, how’s that sweet, subsidized, AAPL options bundle ¥ou got doing?
I am very pleased with Apple’s response to the claims of employee abuse, and their findings.
As the past owner of a firm with manufacturing and sales offices in China, I can unequivocably state that the Chinese worker is not a subservient wall flower, fearful of management.
There is a huge difference between respect and subservience, and perhaps the author of the story that brought about this audit, should learn what that difference is before continuing his journalistic career.
What makes me sick, here in Australia the original ‘iPod’s are made with slave labour!!!!!!!!!!!’ make the 6pm as the headline story. But this report will never see the light of day outside the ‘interested’ like us.
Such a shame, the FUD wagon rolls on as usual.
MW: Modern, even with all this modern tech – we still cant get decent reporting on the news.
Z
“the supplier has launched an aggressive manager and employee training program”
I would have thought the last thing they needed was more agressive managers and employees?
Good plan getting Verité on board — should be seen (even by FUD purveyors) as the necessary third-party overview in this affair.
To “um, yeah” and anybody else who wants to implicate Apple on this issue: Look at the labels, stickers and tags on most everything you buy and read “Made In China.” Yup. Damned near everything you own says it. If not, it’s Tiawan or Singapore.
Everytime you enjoy Wal•Mart’s everyday low prices (or Target, or K•Mart, or any department or discount store), you’re part of the problem, not the solution. So get off your high horse about it. You know as well as anybody that Apple is the kind of entity that will strive for social responsibility whenever and wherever possible.
Stop judging workplace relations with what you know here in the states. Other governments and cultures have much more control over how those businesses are run than the client (Apple) could ever have.
Zillatron,
What were the circumstances of this slave labour? Who was used and how? Was it some factory in Burma?
I live in Australia and I never heard about it.
“”We did, however, find that employees worked longer hours than permitted by our Code of Conduct, which limits normal workweeks to 60 hours and requires at least one day off each week. We reviewed seven months of records from multiple shifts of different productions lines and found that the weekly limit was exceeded 35% of the time and employees worked more than six consecutive days 25% of the time. Although our Code of Conduct allows overtime limit exceptions in unusual circumstances, we believe in the importance of a healthy work-life balance and found these percentages to be excessive.”
O.K. and a 60 hour work week is acceptable as a normal working week. Oh really, I guess that’s why western companies are offshoring to China.
However, let’s ignore this matter for a moment and focus on what hasn’t been said. Did Apple give a warning that they were going to inspect the factory? If so, how much notice? We haven’t been given this information and that’s a concern.
When I used to do workplace inspections I found that if you gave a company more than 48 hours’ notice then a new set of books would become the company’s “real” records.
Another point linked to the aforementioned matter needs to be made. Regarding the interviews with the company’s employees, were these interviews conducted in private or were they done in view of the factory’s supervisors/managers? Again we haven’t been told.
As I said before I’m concerned with this statement over what hasn’t been said rather than what has been said.
I don’t know nearly as much about computers as many contributors to this site. However, I’ve been an HR professional (with a speciality in employee relations) since 1989. I’ve worked in all HR spheres, as a trade unions advocate, in a State department of industrial relations, as an HR teacher and as an HR director/manger. Frankly I’m still concerned. If Apple doesn’t address these points then at the very least this long-term Apple user will remain dissatisfied and disbelieving.
P.S. I went to Apple’s web site to verify this statement to ensure I had all the statement’s content.
Rainy Day, totally agree. Limiting overtime will get them less pay. Most of these people are still (unlike most western countries) supporting their families back home.
It is common in Asia, even for myself, living in Thailand with my Thai wife, I am sending money to the wife’s family every month. You can refuse to do it, but you live in a country and you go with it’s culture if you want to integrate and become part of it!
“O.K. and a 60 hour work week is acceptable as a normal working week. Oh really, I guess that’s why western companies are offshoring to China.”
Union-worker I guess? Mentality problem. You think you can’t live without premium pay and 20hrs workweek. Get real and ask yourself why you got so much manufacturing left in the USA.
If you want Wallmart prices for premium products then start a business to find out how it works.
Have a look in Singapore. Bangladeshi workers for 300 SGD a week, living with 10 or more in a 40ft container with windows and a door cut out.
They live on-site for as long as construction is going, they work 12 hours a day and the containers are normally stacked 3 high facing another container with a platform in between.
Which is, mind you, totally acceptable working-conditions.
Normally they work 2 years or duration of a project, save most of the money and are able to live at least 10 years at their small farm in Bangladesh or India.
Now what did you mention again about worried conditions at the factories in China reviewed by Apple?
My age is showing, 300 SGD a week should read 300 SGD a month!!!
Bikersrule father,
Stick with the program and address my queries about Apple’s lack of detail rather than showing your inherent bias. As I said I’ve worked in ALL fields of HR. Now try to refrain from insult and try to argue in a level-headed manner. Otherwise people will ignore your ideological diatribe.
From this point I’ll only respond to those who have something relevant to say rather than out and out flaming.
I wonder how long the queue/line is outside the gates to these facilities. Probably one of the least offensive, and best places to work in China.
I’d now like to see the author of the original report come up with his material to authenticate HIS reports of child labour et al…
The headline I would like to see is:
‘iPod Factory Workers Biggest Complaint is ‘Not Enough Overtime’
Bikersrule,
I think you set the bar on that one with your first comment which I’ve replied on.
“O.K. and a 60 hour work week is acceptable as a normal working week. Oh really, I guess that’s why western companies are offshoring to China.”
It’s not flaming, it’s putting you back in place while you’re trying to put your ideological ideas about workweeks and what is good and not good on others without even looking at the locally accepted standards.
Second, I did not and will not argue on the points you’ve made in the rest of your comment because I agree totally with them but your first statement just puts you in exactly the same category as where you put my ‘flaming’.
Third, the example of workers in Singapore did shock me when I started working over there. It is not my standard of living but then again, learning more about the how-what-why behind it, I was able to put it in perspective and live with it.
I am not just flaming, understand me well. I am just getting very irritated with people living thousands of miles away thinking that they know it all and everybody should accept and live by their standards.
And that’s based on the first line in your comment only, not the rest of it!
Your relativism stinks.
“Who are we to impose our culture on anyone else?”
This belief system is sooo prevelant, yet amazingly flawed. Carry this logic back a few decades and it then says we should never had invaded Europe and freed millions, and removed Hitler.
Why? Because with relativism, who are we to say what Germany does is right or wrong? Who are we to say we are superior and killing Jews was wrong, and opressing a continent, while trying to control the world was wrong. In their cutlure is was right. Sure, not for everyone, but for most – most who voted it in and went with it.
Does majority rule and make what is right right?
Take this mentality into today, and we lose our world with this thinking. Who are we to say terrorists and communism is wrong? Extreem Muslims who give you the choice of becoming a devout Muslim like themselves or dying – that’s their world, so who are we to say that is wrong?
The point:
Relativism is a lie.
There is right, and their is wrong. There is evil and their is good. If you are too depraved in your thinking to understand this, then yes, who are we to say the way Communist China is run is wrong. I for one will.
Critical thinking – look into it.
~OUT