Apple expands audits, says China labour agent forged documents

Apple Inc expanded internal audits of suppliers and identified a Chinese labour agent hiring underage workers as the world’s most-valuable company moves to boost conditions for people making iPhones and iPads.

One manufacturer employed 74 children younger than 16, and 158 facilities lacked procedures or didn’t perform adequate audits of their own suppliers, according to the annual Supplier Responsibility Report released today by Cupertino, California-based Apple.

“Underage labour is a subject no company wants to be associated with, so as a result I don’t believe it gets the attention it deserves, and as a result it doesn’t get fixed like it should,” Jeff Williams, the company’s senior vice president of operations, said in an interview.

Apple, which joined the Fair Labor Association last year after being criticised for working conditions at suppliers such as Foxconn Technology Group, doubled the number of employees trained in worker rights, laws and safety.

The designer of iPads and iPhones also said it began specialised environmental audits and cooperated with a China group that had criticised its record.

“We’re now taking air samples or water samples or looking at the capacity of a wastewater treatment system, and we’re finding lots of problems and we are fixing them,” Williams said.

Million workers
Apple outlined the findings of 393 audits covering 1.5 million workers in 14 countries. Twenty-eight inspections were surprise visits, it said in the report.

The number of inspections in 2012 was up 72 per cent from 229 the year before.

The company tracked work hours for 1 million workers, and suppliers boosted the compliance rate for a mandated maximum 60-hour work week to 92 per cent from 38 per cent in last year’s report. The average work week was less than 50 hours, it said.

Chief Executive Officer Tim Cook, who was previously Apple’s head of operations, helped design the network of suppliers and manufacturers that built the more than 80 million iPhones and 32 million iPads sold in its last fiscal year. The company had profit of nearly $42 billion on sales of $156.5 billion last year.

“Designed by Apple in California, Assembled in China” is labelled on every iPhone and iPad.

Samsung factories
Williams, who joined Apple in 1998 as head of global procurement after more than a decade at International Business Machines Corp, leads the company’s global supply-chain team. He is among 13 nominees for End Human Trafficking Now’s Business Leader’s Award to be announced in Davos, Switzerland.

Apple decided to identify a Chinese labor agent after it conspired with families to forge documents so that workers seemed older than they were, according to its report today.

“Most companies, they either don’t report on it at all, or they say they look for it and found none, or they obscure the data in some way,” Williams said. “If they’re not finding it, they’re not looking hard enough.”

Its annual report, first released in 2007, is separate from audits being conducted at Apple’s supply factories by the FLA, the Washington-based group the company hired a year ago to examine working conditions throughout its supply chain.

As its market share and operations in China have grown, Apple has been criticised by groups such as China Labor Watch and Students and Scholars Against Corporate Misbehavior, which allege Apple and Foxconn allow excessive working hours and poor pay.

The scrutiny has extended to others in the technology industry. Samsung Electronics Co. (005930), the world’s largest maker of televisions and mobile phones, said last year it also discovered instances of excessive overtime after facing criticism from labor groups.