Original URL: http://www.theregister.co.uk/2012/03/30/apple_foxconn_deal/

FLA, Apple and Foxconn shake on new deal for Chinese workers

Critics argue some abuses are still being ignored

By Phil Muncaster

Posted in Business, 30th March 2012 05:52 GMT

The Fair Labor Association is claiming to have secure assurances from Apple and its supplier Foxconn that they will make sweeping changes to workers’ pay and conditions at the latter’s Chinese plants in line with the FLA’s latest report, but critics have argued they don’t go far enough.

As Apple CEO Tim Cook wraps up his eventful trip to the People’s Republic this week, the non-profit released the findings of its initial month-long report into conditions at three Foxconn plants in China, at Guanlan, Longhua, and Chengdu.

It found substantial problems with working conditions including excessive overtime, health and safety risks and management dominated unions.

Firstly, the FLA reported that all three factories breached its limits of 60 hours per week including overtime and local Chinese limits of 40 hours a week plus 36 hours overtime per month. In some cases employees worked more than seven days in a row without the required day off.

The health and safety issues at Foxconn are well documented, since a fatal explosion rocked the Chengdu plant in 2011, and the FLA said that 43 per cent of the workers it interviewed had experienced or witnessed an accident.

Finally, the FLA found that the union at Foxconn is dominated by management representatives and therefore doesn’t provide true worker representation according to the law of the land.

To address these problems, the FLA said Foxconn and Apple had agreed to comply with FLA and Chinese legal limits on working hours, reducing monthly overtime hours from 80 to 36. To be fair to Apple it had already begun to ‘micro-manage’ hours at the plants to ensure compliance.

The FLA added that Foxconn would increase its workforce “significantly” to maintain capacity while reducing workers’ hours.

It also said that Foxconn agreed to develop a compensation package to ensure workers are protected from the loss of income incurred by reduced overtime, and added that workers cheated out of overtime payments would be retroactively paid according to the results of an audit.

More importantly, the FLA said it is conducting a cost of living study to make sure that workers’ salaries meet its requirements for basic needs.

Groups have argued in the past that despite raising wages, Foxconn also charges staff for living costs such as dorm rooms and that once these extras are deducted from their pay it makes excessive overtime the only way for workers to earn a living wage.

On the health and safety front, FLA said that it would force Foxconn to record all accidents resulting in injury, not just those incurring a production stoppage. It added that progress has been made to reduce risk and improve operating procedures.

Finally, Foxconn agreed to ensure management doesn’t interfere with the election of union representatives and said it will adapt its internship program to ensure a “productive, healthy and safe educational experience” for interns.

“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,” said FLA president and CEO Auret van Heerden.

“If implemented, these commitments will significantly improve the lives of more than 1.2 million Foxconn employees and set a new standard for Chinese factories."

Fair play to the FLA then. There were some who doubted the organisation’s neutrality given Apple is a member but its report has been pretty damning of conditions in the plants, although Apple will say it has already been working to address many of them.

Critics, however, argued that the inspection really just uncovered the tip of the iceberg – it only visited three factories initially and there were reports from non-profit group Students & Scholars Against Corporate Misbehaviour (SACOM) that factory bosses were tipped off about the inspections, giving workers extra breaks and hiding underage workers.

Debby Chan, a project officer for Hong Kong-based SACOM, questioned the low number of interns working at the factories during the inspections – 519 compared to an average of 27,000 per month in 2011.

“On page ten, the report concedes that the use of student labour is to cope with the problem of seasonality. However, it has not found cases of interns who were forced to work at Foxconn, the victims of involuntary labour,” she told The Reg.

“The use of student workers seems to be very insignificant in March. There can be two reasons: (1) it is low season in the factories; (2) students were sent away because of the factory inspections.”

Indeed there is no mention of the problem in the accompanying FLA press release aside from vague assurances about adapting the internship program in the future.

Also missing are mentions of the harsh management practices which many believe contributed to the suicides of countless Foxconn staff in the past. Even the word ‘suicide’ is not mentioned once in the report.

Chan argued that while none of the abuses uncovered in the report are new, they may be taken seriously this time.

“The labour rights violations stated in the report have been mentioned a long time ago. Apple simply ignored those issues,” she argued.

“The demand from consumers now for ethical Apple products is an impetus for changes in the supply chain. However, to make the change sustainable, there must be participation from the workers. They should have the right to form genuine unions through democratic elections.”

She also rejected claims that the cost of Apple and other goods could rise as a result of changes to pay and conditions at the factories, saying that labour costs form only a tiny percentage of the final sales price.

In the end, Apple and Foxconn have until July 2013 to make these changes and if consumer pressure continues then the guarantees are likely to be met, but there are few ways to genuinely know what goes on inside these factories without the threat of continuous, unannounced and fully independent inspections.

Apple did not immediately reply to a request for further comment on the news. ®