Posted on 12/19/2014 10:10:13 PM PST by Swordmaker
BBC Panorama programme noted that Apple has gone to some lengths to moderate the practices within the factories of its suppliers, and to try and trace the origin of the soldering tin that it uses, but it was very much a programme about “Apple’s factories” and “Apple’s use of illegally mined tin”.
The BBC last night aired a Panorama programme highlighting violations at the factories where iPhones are manufactured, as well as the dangers involved in mining some of the tin that ends up as solder inside Apple products.
While the Panorama programme did make note of the fact that Apple has gone to some lengths to moderate the practices within the factories of its suppliers, and to try and trace the origin of the soldering tin that it uses, it was very much a programme about “Apple’s factories” and “Apple’s use of illegally mined tin”.
It annoyed me because Panorama has singled out Apple for blame when Apple is not the only company to be using factories in China to build its electronic products. Nor is Apple the only company to use tin mined from Indonesia in its goods.
What Apple is, is the only company to have made moves to stop illegal practices such as underage employment in factories, massive overtime, and close inspection of the source of the materials it is using.
Apple has been singled out because it is Apple. What about Samsung and the other companies that make their products in the same factories who buy their materials from the same suppliers? Well that wouldn’t make such good TV would it!
Pegatron (the owner of the factories where the iPhone is put together) also manufactures laptops, netbooks, desktop computers, games consoles, motherboards, LCD TVs and much more. Apple is by no means its only client. Pegatron manufactures electronics for other companies including Google, Microsoft, Hewlett-Packard, and Dell.
Pegatron has apparently responded to the BBC claiming the report was heavily biased and their factory standards were normal for China. What of the other factories in China where other electronics are manufactured? Chances are that without Apple keeping a beady eye on them the violations are much worse, of course that’s pure speculation, but it’s also unlikely to make as many headlines so don’t expect to read about it any time soon.
Apple is at least addressing the issues with the way its products are manufactured. The only point that could be made against Apple is the fact that the company makes wide margins on the sales of it’s iPhones – in the programme the researcher mentioned around £200 per handset. Of course, there is more to the manufacturer of an iPhone than the parts and the labour. Apple’s research and development and the operating system are also significant costs. However, even with that in mind, the fact that companies choose to build their products in factories in China and Taiwan is because labour is incredibly cheap and hard working. If Apple was manufacturing the iPhone in the US, for example, then we’d be paying a hell of a lot more for our handsets because the costs would be so much higher due to the rights of the workers to be paid a living wage and work a reasonable amount of hours in the day.
Chinese workers should have exactly the same rights as US workers, but there is also the possibility that if they had them, and the cost of production in these factories went up, Apple and other manufacturers would look else where for cheaper labour. And then what would happen to China?
Every electronics manufacturer is using those factories and that tin. Back in 2013, Samsung admitted that it was using tin from mines in Indonesia, like Apple it said it was committed to addressing the problem.
But how many manufacturers are getting away with doing nothing to monitor the manufacturer of their goods. It's always Apple that gets the headlines. At least the BBC Panorama did make it clear that Apple does have guidelines in place even if their suppliers are ignoring them, but it really ought to have been a programme about how China abuses workers, how people are so desperate in Indonesia that they put their lives at risk, and how we're all to blame because we want cheap gadgets. It's not only Apple who is to blame!
The history of the Apple factories
Apple’s issues with the factories that manufacturer its products have been ongoing for some time. As long ago as 2006 a story in the Mail on Sunday revealed that Apple's iPods were made by workers who earn as little as £27 per month. Back then the factories in question were Foxconn. Foxconn was also in the news a lot in 2010 as the company (owned by Hon Hai Precision Industry) was targeted by human rights activists over long working hours, poor conditions and low pay. By February 2012 an ABC nightline news story showed exclusive footage from inside Apple's controversial Chinese factories. There have also been suicides at the Foxconn factories, that some blame the working conditions for, although the Foxconn CEO blamed those worker suicides on breakups and family disputes.
Tim Cook visited the Foxconn Production line in March 2012, just before the Fair Labour Association released its first report on worker conditions in the factory. In August 2012 Foxconn was said to be making progress with the conditions in its factories, but by September 2012 Apple supplier Foxconn denied using forced student labor in Chinese factories, and then in May 2013 Apple shifted its supply chain away from Foxconn to Pegatron. In July 2013, Apple announced it would investigate new claims of labour violations at Pegatron, after watchdog group China Labor Watch (CLW) announced its investigators had uncovered labor violations in three factories of Pegatron Group.
As for the use of tin – environmental group Friends of the Earth accused Apple of 'trashing' Indonesia thanks to use of tin in iPad and iPhone back in February 2013. By July that year the ecowarriors were picketing Apple Stores, accusing Apple of 'destroying tropical forests, wrecking lives'.
What Apple has been doing to monitor these violations
Apple has been auditing its supplier facilities for the better part of a decade - and has even invited third parties such as the Fair Labor Association to conduct its own investigations. In its full yearly report, the company breaks down the violations it found at those facilities, including discriminatory practices, failure to protect juvenile workers, and excessive working hours, as well as the moves Apple has asked its suppliers to take to correct the infringements. Apple also cracks down on the practices of underage hiring and involuntary labor; in both cases it requires the supplier to make financial reparations, and for underage workers, companies are required to return them to a school chosen by their family, finance their education, and provide income equivalent to what they received as an employee.
Environmental practices also come under scrutiny in Apple’s reports, with particular focus on conflict minerals. In the past Apple has confirmed that all smelters of tantalum in its supply chain were established to be conflict-free by third-party auditors, for example. Similar steps are being taken for suppliers of the other conflict minerals in Apple products: tin, tungsten, and gold. Apple even releases a list of the smelters and refiners it uses, along with their verification status; the company says its goal is to increase the accountability of its smelters and provide information for its stakeholders. Read more about Apple’s 2014 supplier report here.
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Well of course they are much better off with lung disease and a job. I'd love to see the writer of this article spend time in those factories.
Apple employs 1,400 engineers and monitors on Apple's payroll to assure that working conditions are NOT what you are implying. These monitors have quite a bit of authority over the contract manufacturers. Apple has pulled very lucrative contracts from manufacturers who will not improve working conditions. . . contracts worth billions of dollars. I know of at least two instances where Apple has done exactly that. No other Consumer Electronic Company like Apple has gone to that extent to do that. . .
Apple has been on the forefront in improving workers' rights and pay in their manufacturing facilities and the supply chain for over ten years. Is it perfect yet, coming up to the standards we have in the First World? No. . . but as Jeff Williams said, in a letter to Apple's UK staff, Apple is working hard on the issues:
UK Team,As you know, Apple is dedicated to the advancement of human rights and equality around the world. We are honest about the challenges we face and we work hard to make sure that people who make our products are treated with the dignity and respect they deserve.
Last night, the BBC's Panorama program called those values into question. Like many of you, Tim and I were deeply offended by the suggestion that Apple would break a promise to the workers in our supply chain or mislead our customers in any way.
I'd like to give you facts and perspective, all of which we shared with the BBC in advance, but were clearly missing from their program.
Panorama showed some of the shocking conditions around tin mining in Indonesia. Apple has publicly stated that tin from Indonesia ends up in our products, and some of that tin likely comes from illegal mines. Here are the facts:
Tens of thousands of artisanal miners are selling tin through many middlemen to the smelters who supply to component suppliers who sell to the world. The government is not addressing the issue, and there is widespread corruption in the undeveloped supply chain. Our team visited the same parts of Indonesia visited by the BBC, and of course we are appalled by what's going on there.
Apple has two choices: We could make sure all of our suppliers buy tin from smelters outside of Indonesia, which would probably be the easiest thing for us to do and would certainly shield us from criticism. But it would be the lazy and cowardly path, because it would do nothing to improve the situation for Indonesian workers or the environment since Apple consumes a tiny fraction of the tin mined there. We chose the second path, which is to stay engaged and try to drive a collective solution.
We spearheaded the creation of an Indonesian Tin Working Group with other technology companies. Apple is pushing to find and implement a system that holds smelters accountable so we can influence artisanal mining in Indonesia. It could be an approach such as 'bagging and tagging' legally mined material, which has been successful over time in the Democratic Republic of the Congo. We are looking to drive similar results in Indonesia, which is the right thing to do.
Panorama also made claims about our commitment to working conditions in our factories. We know of no other company doing as much as Apple does to ensure fair and safe working conditions, to discover and investigate problems, to fix and follow through when issues arise, and to provide transparency into the operations of our suppliers.
I want you to know that more than 1400 of your Apple coworkers are stationed in China to manage our manufacturing operations. They are in the factories constantly — talented engineers and managers who are also compassionate people, trained to speak up when they see safety risks or mistreatment. We also have a team of experts dedicated solely to driving compliance with our across our vast supply chain.
In 2014 alone, our Supplier Responsibility team completed 630 comprehensive, in-person audits deep into our supply chain. These audits include face-to-face interviews with workers, away from their managers, in their native language. Sometimes critics point to the discovery of problems as evidence that the process isn't working. The reality is that we find violations in every audit we have ever performed, no matter how sophisticated the company we're auditing. We find problems, we drive improvement, and then we raise the bar.
Panorama's report implied that Apple isn't improving working conditions. Let me tell you, nothing could be further from the truth. Here are just a few examples:
Several years ago, the vast majority of workers in our supply chain worked in excess of 60 hours, and 70+ hour workweeks were typical. After years of slow progress and industry excuses, Apple decided to attack the problem by tracking the weekly hours of over one million workers, driving corrective actions with our suppliers and publishing the results on our website monthly — something no other company had ever done. It takes substantial effort, and we have to weed out false reporting, but it's working. This year, our suppliers have achieved an average of 93% compliance with our 60-hour limit. We can still do better. And we will.
Our auditors were the first to identify and crack down on a ring of unscrupulous labor brokers who were holding workers' passports and forcing them to pay exorbitant fees. To date, we have helped workers recoup $20 million in excessive payments like these.
We've gone far beyond auditing and corrective actions by creating educational programs for workers in the same facilities where they make our products. More than 750,000 people have taken advantage of these college-level courses and enrichment programs, and the feedback we get from students is inspiring.
I will not dive into every issue raised by Panorama in this note, but you can rest assured that we take all allegations seriously, and we investigate every claim. We know there are a lot of issues out there, and our work is never done. We will not rest until every person in our supply chain is treated with the respect and dignity they deserve.
If you'd like to learn more about our Supplier Responsibility program, I encourage you and our customers to visit our website.
Thanks for your time and your support.
Jeff
Plus,we use only the best material for our suicide nets.
Apple has two choices: We could make sure all of our suppliers buy tin from smelters outside of Indonesia, which would probably be the easiest thing for us to do and would certainly shield us from criticism. But it would be the lazy and cowardly path, because it would do nothing to improve the situation for Indonesian workers or the environment since Apple consumes a tiny fraction of the tin mined there. We chose the second path, which is to stay engaged and try to drive a collective solution.
Translation: Apple could have taken the Politically Correct approach and simply played Pontius Pilate. Wash their hands of the Indonesian situation, and just pay a tad more for tin from a more responsible source. They chose instead to undertake actually to improve the conditions in Indonesia. Any PR guy could tell you how that would work out.Theodore Roosevelt said that “It is not the critic who counts . . . the credit belongs to the man who is actually in the arena . . .” But any PR guy would warn you not to believe that journalists will ever look at it that way. Because journalists are"the critic." And in their own telling, they count. A lot.
Gee Apple could open a factory in the USA and employ our citizens. But an I-phone would cost $624.00 retail instead of $600.00. Can’t have that.....
So what you are saying is :
Using Slave Labor is ok as long as we educate these people in the process and try to improve the conditions of the SLAVES.
Exactly the same point I made on another thread about this hit piece.
One wonders if this story with its particular slant has something to do with AAPL stock manipulation by some hedge fund.
Normal conditions in Chinese factories are beyond appalling: one guy I know was a rep for a print company. He was sent to China about some business thingy and came back horrified - so much so he almost quit his well-paid job. One thing I remember him saying was that in order to use the lavatory in the plant he was sent to inspect, you had to put on rubber boots of go bare foot through the toilet over flow to get to the john ...
Another thing people here in the US do not understand about factory work in China: no matter how bad it seems to us, to the workers it is a heaven compared to the conditions in the countryside they came from.
Keep in mind here that there are something like 350 million privileged class (of those tens of millions belong to the very affluent {by US standards} ruling class - party members and PLA), city-born Chinese; the other 1 billion rural-born live in poverty.
A Chinese living in the countryside can expect to live in real grinding poverty, near starvation, freeze in the winter, bake in the summer, maybe have electricity, maybe the electricity works, and never become more that a farmer on a small plot of land owned by the collective. There is no ‘advancement’, no hope, very likely no wife, and die young.
Coming to the city is a big deal. A non-city born Chinese, without family connections to the city-born privileged classes, has almost no legal rights, no social amenities like healthcare etc. Coming to the city with little or no money, if they do not find a job fast, they must return to the countryside or starve (no one will help them).
Working in a plant or factory - no matter how long the hours, poor the working conditions (by Western standards), small the sleeping cubicle, low the pay - is far better than where they came from. And if they are lucky (Luck: something which is very important to the Chinese), they may save enough money to afford a wife. (I think some workers have had bad luck in their aspirations and that may count towards the perceived high suicide rate.)
This is the system Apple alone is trying to modify with some small successes. Apple may be able to make still more improvements in working conditions, but it cannot change the system.
Too many Westerners think China is just an Asian type of European country and cannot fathom what actually exists in China. It’s easier to blame Apple for the working conditions than to blame China itself. Without the factories in China, tens of millions of rural poor would still be living in conditions one step above those found in North Korea; praise Apple, don’t scorn it.
So I have written.
I do not doubt that Apple is doing those things. My comment was only directed to the writer who made the argument bad working conditions are better than no job at all.
The suicide rate at FoxConn's manufacturing plants, among their 750,000 employees is 1/4 the rate of the same age groups in the Chinese population in general. . . and it is 1/2 the suicide rate of the same age groups of United States young people (18-28 years old) enrolled in the Ivy League schools such as Yale and Harvard. So, your point is of what value in this discussion?
Uh, no. . . try twice as much. The materials would have to be shipped here first and it is not just the assembly costs but manufacturing of many of the sub-assemblies and parts. . . not to mentioning the raw materials which are NOT, for the most part, mined anywhere near the United States.
Apple DOES have factories in the USA, Assembling iMacs and MacPros. . . of which better than 80% of the parts are made here.
You are doing what is called "begging the question." No, that is not what Apple is doing. You do not improve the condition of workers by assuring they starve to death be assuring there is no work and therefor no income at all for them. . . and educate them about how they can improve their own lot.
That’s a tub of stinky tofu.
How the facts I posted "a tub of stinky tofu," Ursus? As a person educated as an Economist, I am not in the habit of posting data I cannot back up with facts or evidence.
There were 18 suicides at FoxConn's 22 plants in 18 months. . . which would be one per month rate if they occurred regularly during that period, which of course they did not, being sporadic. FoxConn employed 750,000 workers from age 17 to 34 years old in those twenty-two plants in sixteen cities. One plant had a series of five suicides in about three months during the period in question. There were approximately 24 attempted suicides.
However, the rate is FAR lower than the overall population of China in general (China's general population suicide rate is 22.23 per 100,000 per year — Source "China's suicide rate 'among highest in world' AFP News – Fri, Sep 9, 2011 through Yahoo News Singapore) and REALLY lower yet than the same age cohorts of 18 to 34 year olds which is even higher. (None of the suicides were over 28 or younger than 18).
The rate would be 18/750,000 then adjusted to give a number per 100,000 per year. Since there are 750,000 employees, we must divide the number of suicides by 7.5 to get to the standard rate comparable 100,000, then that number by 12/18 or 2/3 to get to a single year, to compare Apples to Apples. Doing that 18 in 750K in 18 months becomes 2.4 per 100K in 18 months then it becomes ~1.6 in 100,000 in 12 months. . . a very low rate per 100,000.
Hell, Dr. Ursus, the lowest suicide rate in the United States among the age cohort of 15 to 24 in 2012, which is the latest year for which there is complete data is available, was in California which had a rate of 7.4 per 100,000. The rate for the United States as a whole was 11.1 per 100,000. Suicidology.com Fact Sheet, 2012 States Total Elderly Young.
So the news media got its panties in a wad about a suicide rate at FoxConn that was literally 1/7 the suicide rate of a similar group of young people in the United States. The reason was because it involved Apple . . . and hypocrisy. Talk about criticizing the mote in someone's eye when they ignore the huge log in their own.
So, I repeat, Dr. Ursus, what is your point?
You post is poorly researched and based on BS. You could ship raw material from antrarctica and it would only increase the cost per unit a minscule amount. Apple would make just as much money if manufacturing was done in the USA. I hope one day Free Traitors will come to their senses and quit denying.
No, central_va, you don't really know what you are talking about. There are literally hundreds to thousands of parts that come from all over the world that go into Apple products. . . and they have to be brought together at just the right time. Apple has perfected the just in time inventory system that works because many of the sub-assembly-contractors are fairly close together, in China. . . and Apple can ramp-up production quickly in response to market forces. In the United States, that is not the case any more. Too many bureaucratic hurdles to leap over. . . not to mention problems with customs for many of the imported parts.
At Macworld last year, i was discussing an innovative product with a long-time US manufacturer who had just made the decision to move his line to Asia. Why was he jumping ship? He didn't want to—he was a conservative patriot, a wounded veteran, a Republican, and had fought the move for years—and it galled him to do it. But because under US rules, EACH time a minor change was made in his products manufactured here, he has to go through an entire months long approval process with the Underwriters' Laboratories BEFORE he gets approval in his state to even start manufacturing it. . . a minor improvement that changes the design for efficiency of manufacturing takes MONTHS to get new approvals. . . where an imported device of exactly the same design DOES NOT REQUIRE IT! The straw that finally broke his back was a new ruling that if a product had not been produced or assembled for three months to even to start-up his production line with the SAME product an identical product would have to be submitted for similar months longs approvals, to make sure nothing has been changed, before he could resume production! It was uneconomical to run the assembly lines so sporadically or for such small runs. . . His profits fell through the floor with the new rules.
He WANTED to keep manufacturing here, but the bureaucracy made it impossible to do so and make a profit and keep ahead of the competition. Literally IMPOSSIBLE.
Thus, he was laying off 250 workers at his California Plant and moving his manufacturing to Indonesia.
He developed this product category, but by the time he got it to market, and the leaks in the approval agencies, there were a dozen identical Asian knockoffs being sold because of the manufacturing delays imposed by bureaucratic redtape in the USA. INSANE!
in Asia, he can make a design change and have it on the assembly line in a week. . . not months.
When are YOU going to wake up to the real reasons why manufacturing has fled the United States?
OK, you didn't ask this faux patriot ( if I believe the issues you bring up), would he have still make a profit if manufacturing in the USA? I'll bet yes. It is greed at work here, not just profit motive. You said his profits fell, well just what does that mean? Does it mean instead of making 50 million in profits he would only make 49 million? Without figures your story means doodly squat. I wouldn't believe a word this so called patriot says.
The manufacturers that moved overseas were making a profit in the USA. They just gave in to gloBULLism.
Your friend laying off Americans and going Asian can stay the hell there. Let's hope he flys Malaysia Airlines.
We're not all stupid some of us can tell piss from rain.
You make a lot of assumptions, and those assumptions attempt to denigrate both this hard working entrepreneur and me as a liar. You would LOSE your bet. Which makes an ass out of you. You don't know anything about it. You know NOTHING of his circumstances and you sit there and judge him.
His profits fell to below ZERO, central_va. His products could not be sold at the price he had to make them for here. He had ORDERS he had to cancel. . . and he was NOT going to suggest his customers buy from his competition. . . nor did they want to. The knock-off duplicates he could not fight were selling at BELOW his cost to manufacture but were not up to the same quality as his product. You are an idiot if you think you can compete against that. He cannot pump his hard earned dollars out the door to keep people employed to PLEASE YOU and your liberal friends ideas of how to conduct business. That is the reality.
In the USofA, the government has more to say about how you manage your business than you do. AND, frankly, they now take the lion's share of the income and the profits. . . that is also the reality.
His choice was outsourcing manufacture or bankruptcy and laying off the rest of his staff. Which would you choose? It was NOT a choice he made lightly. . . something you seem to think businesses do easily and maliciously. You are an economic dunce. . . and don't know enough to stay in business. You'd go bankrupt in a day. Try meeting a payroll every two weeks and also the demands of the government regulators. I HAVE. I am doing it right now. . . and trying to keep my staff employed and insured. Frankly, we are NOT going to be able to do it beyond January 1 because of what our wonderful administration has done to "help" the workers. One, or the other, has to go. The owners of the company have NOT taken home any money for over three YEARS in order to keep the staff paid and the doors open. There is no recovery. It is all smoke and mirrors.
As Steve Jobs told Obama, the jobs will not return because what can be done in Asia in three months takes a minimum THREE YEARS in the US, because of the obstruction of the government regulators. In Tech. . . the window of opportunity is long closed by the time the regulators have put down their coffee, closed their magazines, and reached for the in-boxes and stopped surfing porn on their government issued computers to actually DO SOMETHING on any applications for action. . . which most times is obstruction or outright denial. If they DO, by some miracle, approve a project, then a "stake holder" Non-Governmental Organization will file a lawsuit impeding progress until a Federal or State judge, who has no expertise in the area at all, impedes it even further. . . or issues an injunction against it, until an appeals court overrides his or her idiotic whim, which was based on a mis-reading of the law. . . at which point another NGO brings another nuisance lawsuit and the whole merry-go-round in the courts starts all over again. Sometimes it is the regulatory agency, or some department in the agency itself, having been over-ruled by it's own board, that brings the suit (yes, this has happened!), and years, later, the project, may or may not, finally, get off the drawing board. THAT is the reality in our over-regulated, litigious United States of America for job creation.
Forty years ago, a company I managed wanted to bid on a Federal contract we were eminently qualified to fulfill. I requested the paperwork to submit a bid. The paper work and regulations we had to comply with literally arrived on a PALLET, central_va! This was for a contract under $5,000,000. The amount of compliance paper work we were going to be required to fill out and the reporting we would be required to submit, would have eliminated any profits we could have realized from the contract! It was then that I learned the reason behind the $600 hammers, and $900 screw drivers: paperwork. It has only gotten worse since then. . . far worse. Now, of course, the forms are filed on the internet, but the amount of compliance costs are much higher.
If the two products are of unequal quality then thy are not the same product.
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