(Corrects to Taiwan's Foxconn group, not China's, in paragraph
* Apple operations chief vows to eradicate child labor from
* Apple says child labor, working hours tough challenges
* Student interns a focus in 2013
By Poornima Gupta and Noel Randewich
SAN FRANCISCO, Jan 24 Apple Inc stepped
up audits of working conditions at major suppliers last year,
discovering multiple cases of underage workers, discrimination
and wage problems.
The iPhone and iPad maker, which relies heavily on
Asian-based partners like Taiwan's Foxconn Technology Group to
assemble the vast majority of its iPhones and iPads, said on
Thursday it conducted 393 audits, up 72 percent from 2011,
reviewing sites where over 1.5 million workers make its gadgets.
Apple in recent years has faced accusations of building its
profits on the backs of poorly treated and severely underpaid
workers in China.
That criticism came to the fore around 2010, after reports
of suicides at Foxconn drew attention to the long hours that
migrant laborers frequently endure, often for a pittance in
wages and in severely cramped living conditions.
Foxconn is the trading name of Hon Hai Precision Industry
and employs 1.2 million workers across China.
Under Chief Executive Tim Cook, who took over from Steve
Jobs in 2011, Apple has taken new steps to improve its record
and boost transparency, including the extensive audits of its
sprawling supply chain. Last year, it agreed to separate audits
by the independent Fair Labor Association.
In an interview on Thursday, Apple senior vice president of
operations Jeff Williams said the company has increased its
efforts to solve two of the most challenging issues - ensuring
there are no under aged workers in its supply chain and limiting
working hours to 60 hours a week.
While child labor reflected a small percentage of the
workforce, Apple is now investigating its smaller suppliers -
which typically supply parts to larger suppliers and hence face
less oversight on such issues - to bring them into compliance,
sometimes even firing them.
"We go deep in the supply chain to find it," Williams said.
"And when we do find it, we ensure that the underage workers are
taken care of, the suppliers are dealt with."
In one case, Apple terminated its relationship with a
component maker after discovering 74 cases of underage workers.
Apple also discovered an employment agency that was forging
documents to allow children to illegally work at the supplier.
Apple reported both the supplier and the employment agency
to local authorities, the company said in its latest annual
report on the conditions in its supply chain.
Apple has audited both small and ancillary suppliers, as
well as large ones such as Korea's Samsung Electronics Co,
for working conditions. It found 95 percent of sites
audited complied with avoiding underage labor.
Child labor is an issue that is part of the larger supply
industry as the component maker that Apple found violated child
labor laws supplied parts to more than a hundred different
companies, including automotive companies, Williams said, vowing
to eradicate under aged labor from the industry.
"I don't know how long it will take to get there but that's
our goal," said Williams, who has spent a significant amount of
his 14 years at Apple in Asia managing the supply chain.
FOCUS ON STUDENT INTERNS
For 2013, Williams said a key focus for Apple will be
student interns and ensuring that suppliers do not abuse the
internship system, especially in China where many colleges
require students to complete internships as part of their
Some companies in China are solving labor shortages by
employing students. Last September, city officials of the
northeastern Chinese coastal city of Yantai ordered vocational
high schools to send students to a large plant run by Foxconn -
a key contract manufacture for Apple and other large electronics
companies like Hewlett Packard - to overcome a shortage
Another focus areas has been "bonded labor", where agencies
who help immigrant workers find jobs take a substantial portion
of the worker's pay.
Apple said in the report that it asked suppliers to
reimburse $6.4 million in excess foreign contract worker fees in
2012, according to the report.
The company said it achieved 92 percent compliance with a
maximum 60-hour work week in its supply chain. Where violations
were discovered, Apple took action, it said in its report.
Apple also found and stopped discriminatory practices
against women workers in 34 supplier facilities that required
pregnancy testing and 25 facilities that tested employees for
certain medical conditions, the report said.
(Reporting By Poornima Gupta and Noel Randewich; Editing by