Apple's labour report stirs up controversy

Last week, Malcolm Moore of the Daily Telegraph reported on Apple’s own report on labour conditions in its supplier factories. It was revealed that Apple’s suppliers had used child labour and were involved in other widespread labour violations, involving minimum wage, overtime, and excessive working hours. (To see Apple’s “Supplier Responsibility: 2010 Progress Report”, click here).

And yet the on-line reaction in the article’s comments section wasn’t what you might expect.

Adam Minter of Shanghai Scrap writes that Apple fans were, “…lambasting Malcolm at a rate of 2 to 1 (in a thread that now runs 120+ comments) for having the nerve to report that “only 61 per cent of Apple’s suppliers were following regulations to prevent injuries in the workplace and a mere 57 per cent had the correct environmental permits to operate.”

After being attacked, Moore wrote a follow-up commentary piece arguing that although Apple’s commitment to transparency was laudable, factory conditions were still getting worse on a year-to-year basis based on Apple’s own report. (It’s a fairly detailed analysis, and worth a look).

For me, this controversy brings up a few random points:

1) I agree with Minter that some consumers no longer expect, or even really care, about factory conditions for workers who make popular products. Perhaps consumers have gone from a state of shock to a state of apathy over the years.

2) It is indeed positive that Apple reported this transparently and in a fairly candid tone.

3) As some people mentioned in the comments section to Moore’s article, Apple might be doing more than other technology firms, and to some extent, there’s a double standard at play. (At the very least, Apple seems to have improved its auditing policies in recent years).  This argument is reasonable. However, the literature on corporate and social responsibility shows that industry leaders are usually the actors most capable of change. Since Apple is an industry leader, it should do all it can to ensure that its suppliers are obeying the law and complying with its codes.

4) Could this be a case in which suppliers have more leverage than buyers? Paul Midler, in his book Poorly Made in China, describes his experience working with a manufacturer in China that produced cheap shampoo and other health care products. When first getting the business off the ground, the factory owners were willing to take orders for shockingly cheap prices, to the point where the importers simply had to wonder, “how in the world can these people make any money on this?”.

However, as time went on, the manufactures continuously gained experience and technological know-how. And as they grew more competent and gained more insights into the industry, they were able to extract more profits by cutting corners on quality, while selling the identical product (or similar products) to markets in the developing world. Meanwhile, as the manufacturer improved capacity and self-confidence, the importers became increasingly unwilling and unable to confront the manufacturer on troubling behavior. In other words, Midler paints a picture in which, at this factory and in many factories throughout China, power and leverage subtly shifted to the manufacturers’ side as time went on.

Might this also be the case with Apple? Could a relative lack in power, despite its world-famous brand name, be why they were only willing to cut business relations with one supplier? Or, could this simply be an excuse for not doing more?

5) However, if it is the case that it is increasingly more difficult for brands to put pressure on suppliers, then focus on the government’s role in enforcing labour laws is all the more important. As the UN framework on human rights and transnational corporations points out, although corporation like Apple do have an obligation to respect human rights, the state is still the main actor that has a duty to protect its own citizens from corporate abuse.

In sum, in a globalized world, producing products in a way that guarantees human rights is a complex task that requires governments and companies to play their part, while also receiving oversight and participation from workers, civil society, and the media.

What do you think?
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