The Fair Labor Association today released its report on its investigation of the labor practices of Apple, Inc.'s Foxconn supplier.
On February 13, FLA launched an independent investigation into labor rights allegations at Foxconn, an Apple supplier in China. FLA assessors logged more than 3,000 staff hours inside the factories. They evaluated conditions based on visual observation and review of policies, procedures and documentation (payroll and time records, production schedules, employee records); interviewed hundreds of Foxconn workers and managers both on- and off-site; and conducted an anonymous worker perception survey of 35,500 randomly-selected Foxconn workers – providing an in-depth understanding of working conditions, particularly during peak production of Apple products. FLA found excessive overtime and problems with overtime compensation; several health and safety risks; and crucial communication gaps that have led to a widespread sense of unsafe working conditions among workers.
Report type:Associated organization:
For additional discussion of this issue, going back to 2006 on my blog site, see, e.g.,:
1. Larry Catá Backer, Corporate Social Responsibility and Voluntary Codes: Apple, its Stakeholders, and its Chinese Laborers, Law at the End of the Day, June 16, 2006;
2. Larry Catá Backer, Corporate Governance and the Social License to Operate: Foxconn and the Limits of Legal Formalism in Corporate Governance, Law at the End of the Day, June 8, 2010;
3. Larry Catá Backer, Apple, Inc, the FLA and the Governance of Supplier Labor Standards Beyond the State, Law at the End of the Day, Jan. 17, 2012; and
4. Larry Catá Backer, Transparency and Monitoring Corporate Social Responsibility: Apple, Foxconn and 'This American Life', Law at the End of the Day, March 17, 2012.
I have discussed some aspects of the Apple Foxconn scandal in a recently circulated manuscript: Larry Catá Backer, Transparency and Business in International Law—Governance Between Norm and Technique (March 18, 2012), available SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2025503
(From Ben Popper, Under increasing scrutiny, Apple supplier Foxconn raises worker wages by 16-25%, VentureBeat, Feb. 17, 2012)
The Report (Fair Labor Association, Independent Investigation of Apple Supplier, Foxconn, March 2012) made the following Findings, Remedial Measures and Conclusions:
In its investigation of Foxconn, FLA observed at least 50 issues related to the FLA Code and Chinese labor law, including in the following areas: health and safety, worker integration and communication, and wages and working hours. The most pressing problems are laid out below with the sustainable remedial measures that Apple and Foxconn have agreed to implement, in keeping with requirements of the FLA program.
A) Working Hours
During peak production, the average number of hours worked per week at Foxconn factories exceeded both the FLA Code standard and Chinese legal limits. This was true in all three factories. Further, there were periods during which some employees worked more than seven days in a row without the required minimum 24-hour break. The root causes include high labor turnover, which undermines efficiency, and gaps in production and capacity planning.
Remedial Action: Foxconn has agreed to achieve full legal compliance regarding work hours by July 1, 2013, while protecting workers’ pay. While reducing hours and stabilizing pay, Foxconn will need to increase employment to maintain current levels of output, productivity and quality. In the next year, tens of thousands of extra workers will need to be recruited, trained and accommodated at the same time as hours worked are progressively reduced per worker.
B) Health and Safety
Our assessors identified numerous issues related to inconsistent policies, procedures and practices. The investigation revealed that a considerable number
of workers felt generally insecure regarding their
health and safety. The issue of aluminum dust was of particular concern, as this was the cause of an explosion at the Chengdu facility last year. FLA found that,
one year after the Chengdu explosion, Foxconn had improved operating procedures, measurement, and documentation to reduce risk related to aluminum dust where Apple products are made.
Remedial Action: Workers are the first line of defense in health and safety, and increased worker involvement in formulating and implementing health and safety policy will help to ensure future compliance. Many of Foxconn’s health and safety violations, including blocked exits, lack of or faulty personal protective equipment, and missing permits have already been remedied. Additionally, Foxconn has agreed to change the system by which accidents are recorded. In the past, only those accidents that caused work stoppage were recorded as accidents. Moving forward, all accidents that result in an injury will be recorded and addressed.
C) Industrial Relations and Worker Integration
Investigators found that workers were largely alienated, in fact or in perception, from factories’ safety and
health committees and had little confidence in the management of health and safety issues. The assessment also suggests that if workers had more involvement
with developing and monitoring health and safety procedures, many of the problems with implementation could be avoided.
It should be noted that committees may not
be truly representative of the workers, because management nominates candidates for election. The result is committees composed not by those who
need representation, but instead are dominated by management representatives. Moreover, committees
are largely reactive, failing to monitor conditions in a robust manner. As a result, workers remain generally unaware of committees’ existence or role, while factories’ communications are almost entirely top-down.
Remedial Action: Foxconn has agreed to enhance workers’ participation in committees and other union structures. In keeping with local laws, Foxconn has agreed to ensure elections of worker representatives without management inteference. All workers will receive
a copy of the Collective Bargaining Agreement and new employees will receive information about union activities during their orientation process.
D) Compensation and Social Security Insurance
While Foxconn wages are above the Chinese average and the legal minimum, the assessment found
that 14 percent of the workers may not receive fair compensation for unscheduled overtime. The assessors discovered that unscheduled overtime was only paid
in 30-minute increments. This means, for example, that 29 minutes of overtime work results in no pay and
58 minutes results in only one unit of overtime pay. Across China, all workers must have health, accident, social security, unemployment, and maternity coverage, but the system is set up on a provincial and city basis. This means that workers who migrate from other cities or provinces can’t collect their insurance when they return home. Workers are further unmotivated to enroll because of a required co-pay into insurance programs from which they do not benefit.
Remedial Action: Foxconn has agreed that the policy and practice relating to such situations warrants improvement; workers will be paid fairly for all overtime and work-related meetings that occur outside regular working hours. After extensive discussions, Foxconn will offer a two-track remedial strategy:
to investigate alternative private options to provide unemployment insurance to migrant workers, and work with government agencies to expedite the transportability of benefits. FLA will conduct a cost of living study in Shenzhen and Chengdu to assist Foxconn in determining whether worker salaries meet FLA requirements for basic needs, as well as discretionary income.
IV. Conclusion
As an affiliate of the Fair Labor Association, Apple has committed to ensuring that the FLA code standards are upheld in its supply chain. This investigation was the first of an ongoing series of FLA investigations and assessments into Apple’s supply chain. FLA will report periodically on the progress of Foxconn and Apple in taking steps to meet FLA’s remedial recommendations. (Report, supra, pages 2-3).
No comments:
Post a Comment