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Analysts Question Apple Labor Audit at Foxconn Factories

Apple Chief Executive Officer Tim Cook (L) visits the iPhone production line at the newly built Foxconn Zhengzhou Technology Park in Zhengzhou, Henan province, China, March 28, 2012 handout photo.
Apple Chief Executive Officer Tim Cook (L) visits the iPhone production line at the newly built Foxconn Zhengzhou Technology Park in Zhengzhou, Henan province, China, March 28, 2012 handout photo.
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Ivan Broadhead
HONG KONG —  An audit shows working conditions have improved at Chinese factories that make Apple electronic devices. But critics said more work is still needed before the plants meet standards set by Chinese law.

The Fair Labor Association commended Apple and its principal manufacturing contractor, Foxconn, for improving factory safety and moving to reduce maximum working hours at three plants in China that employ over 150,000 people.
 
Apple was the first electronics firm to join the FLA after the company’s reputation was bruised by a wave of worker suicides at Foxconn plants starting in 2010, and a fatal factory explosion last year.
 
Anita Chan of the Center for Social and Cultural Change in China Investment at the Sydney University of Technology, acknowledged progress. However she questioned the credibility of the report, given that the FLA is funded by its members, including Apple.
 
“The history of auditing, this voluntary-code rhetoric, has totally failed," she said. "In 2007 a trade union was set up inside Foxconn, but the suicides are evidence things did not change. There is lots of media attention paid to certain violations for a couple of months, then things return to normal.”
 
The audit demands Foxconn make 360 improvements to its factories before July 2013. A majority have been implemented, including ergonomic breaks to prevent repetitive strain injuries among staff, and reform of the internship program to end student overtime.
 
A majority of Foxconn’s one million employees in China are rural migrants, who move to the cities to earn as much money in as short a time as possible.
 
Ironically, many of these workers might leave the company for less scrupulous employers once Foxconn conforms to laws limiting the working week to 40 hours from the current 60.  
 
Earl Brown of the U.S. Solidarity Center is a veteran labor lawyer who testified to the Congressional-Executive Commission on China last month. He had concerns about the audit’s methodology and said staff must feel secure expressing their views to management.
 
“Workers add an important informational component to the compliance picture," said Brown. "When you have the prospect of Foxconn lining up its employees, giving them iPads and telling them to answer 50 questions from an outside auditing agency, employees fear the answers can be traced to them - if they answer negatively they will be fired. That is the fundamental flaw.”

Brown said China has made considerable progress in labor policy, even leading the U.S. in areas including worker maternity rights. But with growth slowing in China, worker rights could erode rather than improve as employers seek to maintain their profit margins.

Beijing's social dilemma

Beijing’s concern about the link between worker unrest and social instability, driving increasingly progressive reforms to protect the nation’s workforce, said Mike Lee, China spokesperson for Social Accountability International.
 
In the southern city of Shenzhen, for instance, a pilot project administered by the country’s only legally recognized union, the AFCTU, was recently established in which workers can elect their own representatives.  

“The new generation of workers, from the 1980s, 1990s, is very independent. [They] are more empowered but communications [with employers] are worse. That could be a real problem. Expect more strikes,” said Lee.  

Labor strikes unlikely
 
Although strikes are already increasingly common in China as workers better understand their rights and seek to protect them, neither Lee nor Chan see labor-related protests evolving into broader expressions of discontent at China’s political leadership.

“Generally, this has not been the case with strikes," said Chan. "The anger is directed at the employers. The workers actually petition the government for help.”
 
Labor costs mean China is becoming increasingly expensive for Foxconn, which has more than a million staff in the country on its payroll.
 
As the iPhone 5 moves towards production, the company is looking for cheaper manufacturing bases. In July, Indonesia’s industry minister announced the Taiwanese giant would invest $10 billion to build a plant on the main island of Java.
 
Despite Indonesia being the largest economy in southeast Asia, the country’s workers enjoy lower salaries than their Chinese counterparts, and fewer protections in the workplace.

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