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Apple CEO defends fixes to suppliers' working conditions

Underage labor 'abhorrent', overtime abuse 'endemic'

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CEO Tim Cook wants you to know – really wants you to know – that despite what you may have heard, Apple takes working conditions at its Asian contract manufacturers quite seriously and is working to improve them.

"No one in our industry is doing more to improving working conditions than Apple," Cook told investors and analysts at the Goldman Sachs Technology and Internet Conference in San Francisco on Tuesday.

To be frank – knowing how wretched the conditions are for many workers in Chinese factories churning out consumer electronics geegaws – being better than other tech firms is not a particularly high bar over which to hurdle.

That said, Cook did make a fair – if understandably self-serving and not always fully accurate – case, pointing to Apple's supplier auditing efforts to bolster his claims. "We are constantly auditing facilities, going deep into the supply chain, looking for problems, finding problems, and fixing problems," he said.

According to Cook, when Apple's auditors find problems in the supply chain, "They stay with them until they fix them." From his point of view, Apple staffers working on fixing such problems are "truly a model for the industry."

One problem that he identified is underage labor, which he described as "abhorrent" but "extremely rare" in Apple's supply chain. "Our top priority is to eliminate it entirely," Cook said, claiming that it has now been eradicated in final-assembly plants, such as those run by Foxconn, but that it still exists to some degree further down the supply chain.

He also discussed Apple's efforts to eliminate excessive overtime, a problem he called "endemic to our industry." Apple's suppliers code of conduct, he said, has a cap of 60 hours per week.

Unfortunately, Cook was fudging a bit when he made that claim. In fact, the code's Working Hours section actually reads: "Except in emergency or unusual situations, a work week shall be restricted to 60 hours, including overtime," with no definition of exactly what "emergency or unusual situations" might mean.

It should be noted, however – to Apple's credit – that the code also requires that "All overtime shall be voluntary." An admirable inclusion, but a less-than-scrupulous supervisor might easily create conditions in which voluntary refusal to accept overtime might result in tough times for a worker.

Cook did admit that the code's overtime rules are often flouted, and that Apple has "consitently found violations to this code." In response to these violations, he said, Apple has begun to "manage working hours on a very micro basis."

As part of this micro focus, Cook said, this January Apple collected weekly hours-worked info on over one-half million workers throughout the supply chain, and discovered that the compliance rate stood at 84 per cent.

Now, whether you call that a high compliance rate or a low one depends upon your frame of reference – or, for that matter, upon your managerial level, should you happen to be employed at a Chinese factory – but from Cook's point of view, that level of compliance is "significantly improved from the past – but we can do better."

One other example Cook gave of what Apple is doing for its contract employees is its Supplier Employee Education and Development (SEED) program. "We provide free classes in many of the locations in our supply chain," he said, "and we partner with local colleges to provide courses like English, and entrepreneurship, and computer skills, and the like," he said.

According to Cook, over 60,000 employees in Apple's supply chain have taken part in such classes. "If you could take all these employees and move them to one location," he said, "it would be a campus population larger than Arizona State," which he identified as the largest public university in the US.

Well, Arizona State actually has over 72,000 students – but maybe Cook was talking only about the main campus in Tempe, which has just under 60,000.

We'll give him the benefit of the doubt on that one, but we'll keep an eye on the compliance figures Apple uncovers in its overtime audits – Cook says they'll be published monthly on Apple's website. ®

Bootnote

As is becoming a tradition whenever an Apple exec speaks with investors, the topic of Cupertino's huge and growing hoard of cash was raised. Cook, as has also become traditional, declined to give any specific plans on what the company will do with its current $97.6bn pile, but he did rule out one possibility. "We're not going to go have a toga party," he promised.

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