Apple supplier Foxconn promises to improve following scathing report into working conditions

The inspectors yesterday published their scathing report, which found numerous
violations of China’s labour laws, employees who were working more than 11
days in a row without a break and widespread safety hazards inside the
factories.

The team of inspectors said they gave the company “the equivalent of a
full-body scan” by surveying more than 35,000 of the company’s 1.3
million workers. Around 43 per cent said they had seen or been involved
accidents in factory accidents and nearly two thirds said they were unable
to live off of their salaries.

The report described workers as “largely alienated” from the
management and that, while wages were in general above the Chinese average,
more than one in 10 was not being paid fairly for the amount of overtime
they were working.

“There’s this lingering sense among workers that they’re in a dangerous
place,” Auret van Heerden, president and chief executive of the FLA told the
New York Times.

In an attempt to pre-empt the criticism that will inevitably follow the FLA
report, Foxconn yesterday announced that it would cut workers hours to a
maximum of 49 a week without cutting their pay – effectively promising a
significant pay rise.

Apple said in a statement: “We think empowering workers and helping them
understand their rights is essential. Our team has been working for years to
educate workers, improve conditions and make Apple’s supply chain a model
for the industry, which is why we asked the FLA to conduct these audits.”

Foxconn, which also produces electronic parts for Dell, Amazon, HP and a host
of other technology firms, is China’s largest private employer and its
pledged changes are likely to send ripples throughout the entire Chinese
manufacturing sector.

If it meets its pledge to improve conditions by the summer of 2013, as
mandated by the FLA report, then the costs of its operations in China are
likely to rise by hundreds of millions of dollars and other manufacturers
may be forced to follow suit.

It remains unclear how much of the extra cost Apple would pass on to
customers, because even after the changes, labour will only makes up a
relatively small share of the expense of manufacturing its devices.

However, Meg Whitman, the chief executive of Hewlett-Packard, the world’s
biggest PC maker, said last month that “if Foxconn’s labor cost goes up
… that will be an industry-wide phenomenon and then we have to decide how
much do we pass on to our customers versus how much cost do we absorb.”

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