Bloomberg News

Apple Says Fair Labor Association Began Foxconn Inspection

February 14, 2012

(Updates with Foxconn global employment numbers in fifth paragraph, comment from China Labor Watch in 11th paragraph.)

Feb. 14 (Bloomberg) -- Apple Inc. said the Fair Labor Association began auditing supplier Foxconn Technology Group’s plants in China, its first inspections in an effort to respond to criticism of conditions for workers making its gadgets.

Assessments will take about two weeks and include at least four campuses in China, Louis Woo, chairman of Foxconn’s retail unit and a spokesman for the Taipei-based company, said in a phone interview today. More than 10 association representatives are now at two factories in Shenzhen and others in Chengdu and Zhengzhou, he said.

Apple, which became the first technology company to join the Washington-based labor group last month, has been criticized by human-rights organizations over conditions at suppliers including Foxconn. Apple released a list of suppliers for the first time in January and publishes an annual report detailing instances of labor and environmental violations by some manufacturers.

As part of its assessment, the Fair Labor Association will interview thousands of employees about working and living conditions, including health and safety, compensation, working hours and communication with management, Cupertino, California- based Apple said in its statement.

Foxconn employs more than 1.2 million people in over 18 countries, chairman and founder Terry Gou said Dec. 1. The company has operations in Taiwan, Brazil, Mexico, Slovakia and Vietnam in addition to its China factories.

Random Inspections

Representatives are inspecting Foxconn facilities and surveying workers at Longhua and Guanlan, Woo said. Many of the representatives speak Mandarin, he said.

Labor-rights inspectors started yesterday at a Shenzhen plant known as Foxconn City, Apple said in a statement. Inspections also will be conducted at Foxconn factories in Chengdu at Apple’s request, with similar audits of Quanta Computer Inc. and Pegatron Corp. later this year, Apple said.

Pegatron Chief Financial Officer Charles Lin said by phone the company’s Shanghai factory was informed of the coming inspection within the last two days and hasn’t been given a schedule for the visit.

Carol Hsu, a spokeswoman for Taoyuan, Taiwan-based Quanta, which makes iPods and notebooks for Apple, declined to comment.

“The reason why Apple is having this FLA inspection is not because they want to solve the problems; instead, it’s because Apple wants to get publicity and rebuild its positive image,” Li Qiang, executive director of China Labor Watch said in a statement today. “What Apple should do now is to take action to solve the problems and improve the labor conditions in their supplier factories.”

Protesters demanding that Apple develop a worker-protection strategy to prevent abuse at its suppliers’ facilities presented the company with petitions signed by more than 250,000 people last week at its Grand Central store in New York City.

IPads Seized

In addition to criticism about workers’ conditions, Apple is grappling with a dispute that has led some iPads to be removed from shelves. A newspaper in China’s Hebei province reported that authorities seized iPads from retailers there because Hong Kong-listed Proview International Holdings Ltd. claims to own the iPad name.

Proview also is asking China’s customs bureau to block imports and exports of iPads, Roger Xie, the lawyer representing Proview, said today.

Apple climbed 1.9 percent to $502.60 at the close in New York yesterday -- the first time the stock rallied above $500 -- after a two-week gain spurred by the iPad maker’s first-quarter earnings report.

The company, burnished by the iPhone’s success and memorials to co-founder Steve Jobs, displaced Google Inc. as the top company in Harris Interactive’s poll of corporate images. Apple topped the public’s ratings for vision and leadership, products and services, financial performance and workplace environment -- four of the six categories Harris tracked.

The Fair Labor Association was set up in 1999 to monitor workplace environments globally in an initiative by former U.S. President Bill Clinton. Its participants include Nike Inc. and Nestle SA.

--With assistance from Adam Satariano in San Francisco and Edmond Lococo in Beijing. Editors: Cecile Daurat, Ville Heiskanen

To contact the reporter on this story: Heather Perlberg in New York at hperlberg@bloomberg.net Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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