But these outside monitors also encounter difficulties and are themselves sometimes subject to the disciplines of transparency. Control of data by the data generator, in this case Apple, makes it far more difficult to verify and contest the information produced. The transaction costs of data verification can be substantial and the process difficult. (See, Larry Catá Backer, Economic Globalization and the Rise of Efficient Systems of Global Private Law Making: Wal-Mart as Global Legislator, 39(4) UNIVERSITY OF CONNECTICUT LAW REVIEW 1739 (2007)). In a recent and highly publicized example, the “weekly public radio program “This American Life” said on Friday that it was retracting a critical report about Apple’s suppliers in China because the storyteller, Mike Daisey, had embellished details in the narrative.” (Brian Stelter, ‘This American Life Retracts Episode on Apple’s Suppliers in China, The New York Times, March 16, 2012 (“The program’s host, Ira Glass, said in a statement that Mr. Daisey “lied” to him and to Brian Reed, a producer of the program, about details related to injured workers Mr. Daisey had described meeting at Foxconn, a factory in China where Apple products are made.”)).
Some of the falsehoods found in Daisey's monologue are small ones: the number of factories Daisey visited in China, for instance, and the number of workers he spoke with. Others are large. In his monologue he claims to have met a group of workers who were poisoned on an iPhone assembly line by a chemical called n-hexane. Apple's audits of its suppliers show that an incident like this occurred in a factory in China, but the factory wasn’t located in Shenzhen, where Daisey visited. (Press Release: This American Life Retracts Story Says It Can't Vouch for the Truth of Mike Daisey's Monologue about Apple in China (the Retraction Statement released March 16, 2012))"The retraction (PDF) follows assertions by the Chinese translator who helped Daisey, who disputed the story put forward the episode and in Daisey's one-man show, which is playing in New York." (From Charles Arthur, This American Life withdraws damning Apple episode, The Guardian (UK), March 16, 2012). Fpor the retraction and the blog post announcing it and other measures takebn in response, see, This American Life Retracting "Mr. Daisey and the Apple Factory, March 16, 2012.
The podcast of the show quickly became the single most popular in This American Life's history, with 888,000 downloads and 206,000 streams. It led to a petition for better working conditions in the factories where Apple products are made. That petition eventually raised 250,000 electronic signatures and was delivered to Apple.
That, and the general tide of media coverage about conditions at the Foxconn factory, where a number of workers have committed suicide and long hours are commonplace, has led Apple to announce initiatives to improve and standardise working conditions.
Glass said Daisey was unhelpful when attempts were made to verify some of the details with his translator during the fact-checking process before the broadcas. (From Charles Arthur, This American Life withdraws damning Apple episode, The Guardian (UK), March 16, 2012).
During fact checking before the broadcast of Daisey's story, This American Life staffers asked Daisey for this interpreter's contact information. Daisey told them her real name was Anna, not Cathy as he says in his monologue, and he said that the cell phone number he had for her didn't work any more. He said he had no way to reach her.
"At that point, we should've killed the story," says Ira Glass, Executive Producer and Host of This American Life. "But other things Daisey told us about Apple's operations in China checked out, and we saw no reason to doubt him. We didn't think that he was lying to us and to audiences about the details of his story. That was a mistake." (Press Release: This American Life Retracts Story Says It Can't Vouch for the Truth of Mike Daisey's Monologue about Apple in China (the Retraction Statement released March 16, 2012))
In a report for “Marketplace” on Friday, Mr. Schmitz acknowledged that other people actually had witnessed harsh conditions at the factories that supplied Apple. “What makes this a little complicated,” he said, “is that the things Daisey lied about are things that have actually happened in China: Workers making Apple products have been poisoned by hexane. Apple’s own audits show the company has caught underage workers at a handful of its suppliers. These things are rare, but together, they form an easy-to-understand narrative about Apple.” (From Brian Stelter, ‘This American Life Retracts Episode on Apple’s Suppliers in China, The New York Times, March 16, 2012).As a consequences the reporting was misleading but the purpose—to deploy information to pressure a reporting entity to abandon a particular practice or work place rules in favor of others, was based on something approaching verifiable facts.
Apple will continue to face this sort of self-organized monitoring scrutiny that in a way matches the self organization of its own transparency structures. However, Apple is also seeking a more networked approach to transparency by reaching out to third party auditing and certification organizations. This might well have been the result, in part, of the reaction, among consumers, investors and other stakeholders, to the reports from monitors, including those made by "This American Life."
The same month the episode aired, The New York Times ran a front-page investigative series about Apple's overseas manufacturing, and there were news reports about Foxconn workers threatening group suicide in a protest over their treatment.
Faced with all this scrutiny of its manufacturing practices, Apple announced that for the first time it will allow an outside third party to audit working conditions at those factories and – for the first time ever – it released a list of its suppliers. (Press Release: This American Life Retracts Story Says It Can't Vouch for the Truth of Mike Daisey's Monologue about Apple in China (the Retraction Statement released March 16, 2012))
And thus the lesson: voluntary codes work best when they produce standards that can be monitored, when they are embraced by companies willing to investigate stakeholder claims of violation, and when stakeholders can affect the consumer markets for companies irrespective of the existence of the codes. For the stakeholders, including NGOs, this works well, too. They are able to skip the governmental middleman, so-to-speak, and directly affect corporate behaviour in a precise and targeted way. However, the transparency regimes through which is accomplished will necessarily apply as strongly against monitors as it does against the monitored. Civil society elements deeply engaged in efforts to broaden transparency and to use its monitoring roles to affect corporate conduct should take heed—their own systems of data harvesting and assessment is as likely to be scrutinized and tested, and the legitimacy of their own efforts will depend, on adherence to the norms of production and assessment of data as they mean to hold the objects of their actions.