Apple Inc. disclosed a comprehensive list of its major suppliers for the first time, along with a detailed report on factory inspections, moving to combat an array of criticism about working conditions in its supply chain and the company's transparency about it.
The report said Apple found continued problems in areas such as working hours, overtime pay and handling of hazardous waste. For example, the report said Apple's suppliers were in compliance with the company's code of a maximum of a 60-hour work week only 38% of the time. The company said factories fared better in other areas like fair treatment.
In one of his first interviews as Apple Chief Executive, Tim Cook said the Cupertino, Calif., company has long aimed to be more transparent and believes the steps it is taking—including nearly doubling the number of supplier audits it does—are "raising the bar" for the industry.
"I have spent a lot of time in factories over my lifetime and we are clearly leading in this area," said Mr. Cook, previously Apple's chief operating officer who oversaw its supply chain. "It is like innovating in products. You can focus on things that are barriers or you can focus on scaling the wall or redefining the problem."
Apple's list of 156 companies came along with a major report—one of the company's largest ever—divulging the results of its recent factory inspections.
While the company has long revealed some of its top suppliers, the new list covers those that represent 97% of its materials and manufacturing spending.The list includes a range of global technology companies, such as Sony Corp. to Intel Corp., along with niche regional businesses such as Tianjin Lishen Battery Joint-Stock Co. Ltd.
The report makes several references to one of Apple's biggest manufacturing partners, Hon Hai Precision Industry Co.
The company, also known as Foxconn, combated a spate of employee suicides at a facility in Shenzen, China, in 2010 and an explosion that killed four workers at plant in Chengdu, China, last year. Apple said it has put in place new requirements for firms dealing with combustible dust.
The report found 108 facilities didn't pay proper overtime wages and 93 facilities had records that indicated more than 50% of their workers exceeded the 60-hour work week. The audits also found 5 facilities had incidents of underage labor.
"Working hours is a complex issue," said Mr. Cook, adding he's confident the company can improve in the area by "monitoring these plants at a very, very micro level."
"I know this is a journey," Mr. Cook said.
The report also found 24 facilities conducted pregnancy tests and 56 didn't have procedures to prevent discrimination against pregnant workers. Apple said that at its direction, the suppliers have stopped discriminatory screenings for medical conditions or pregnancy.
Mr. Cook said Apple has been sharing more of its findings about working conditions in its factories over time, but this year's update represents its most detailed.
It comes as the drumbeat of criticism against practices across the company's ballooning supplier footprint has grown from prominent Chinese environmental activists and others. Many of those have taken aim at the company's prior unwillingness to disclose all the suppliers it works with.
The report said Apple has taken new steps to better monitor and improve conditions at factories, including increasing audits in Malaysia and Singapore and expanding its worker education program.
Apple said it found 112 facilities that weren't properly storing, moving or handling hazardous chemicals and 69 weren't recycling or disposing of hazardous waste as required by law, including one that had a pipe dumping waste into a nearby farm.
The Fair Labor Association, a prominent labor standards non-profit, also said that Apple would join the group, opening it up to independent monitoring. In a statement, Apple's senior vice president of operations Jeff Williams said it was "extremely proud to be the first technology company admitted into the group."
wsj.com
The report said Apple found continued problems in areas such as working hours, overtime pay and handling of hazardous waste. For example, the report said Apple's suppliers were in compliance with the company's code of a maximum of a 60-hour work week only 38% of the time. The company said factories fared better in other areas like fair treatment.
In one of his first interviews as Apple Chief Executive, Tim Cook said the Cupertino, Calif., company has long aimed to be more transparent and believes the steps it is taking—including nearly doubling the number of supplier audits it does—are "raising the bar" for the industry.
"I have spent a lot of time in factories over my lifetime and we are clearly leading in this area," said Mr. Cook, previously Apple's chief operating officer who oversaw its supply chain. "It is like innovating in products. You can focus on things that are barriers or you can focus on scaling the wall or redefining the problem."
Apple's list of 156 companies came along with a major report—one of the company's largest ever—divulging the results of its recent factory inspections.
While the company has long revealed some of its top suppliers, the new list covers those that represent 97% of its materials and manufacturing spending.The list includes a range of global technology companies, such as Sony Corp. to Intel Corp., along with niche regional businesses such as Tianjin Lishen Battery Joint-Stock Co. Ltd.
The report makes several references to one of Apple's biggest manufacturing partners, Hon Hai Precision Industry Co.
The company, also known as Foxconn, combated a spate of employee suicides at a facility in Shenzen, China, in 2010 and an explosion that killed four workers at plant in Chengdu, China, last year. Apple said it has put in place new requirements for firms dealing with combustible dust.
The report found 108 facilities didn't pay proper overtime wages and 93 facilities had records that indicated more than 50% of their workers exceeded the 60-hour work week. The audits also found 5 facilities had incidents of underage labor.
"Working hours is a complex issue," said Mr. Cook, adding he's confident the company can improve in the area by "monitoring these plants at a very, very micro level."
"I know this is a journey," Mr. Cook said.
The report also found 24 facilities conducted pregnancy tests and 56 didn't have procedures to prevent discrimination against pregnant workers. Apple said that at its direction, the suppliers have stopped discriminatory screenings for medical conditions or pregnancy.
Mr. Cook said Apple has been sharing more of its findings about working conditions in its factories over time, but this year's update represents its most detailed.
It comes as the drumbeat of criticism against practices across the company's ballooning supplier footprint has grown from prominent Chinese environmental activists and others. Many of those have taken aim at the company's prior unwillingness to disclose all the suppliers it works with.
The report said Apple has taken new steps to better monitor and improve conditions at factories, including increasing audits in Malaysia and Singapore and expanding its worker education program.
Apple said it found 112 facilities that weren't properly storing, moving or handling hazardous chemicals and 69 weren't recycling or disposing of hazardous waste as required by law, including one that had a pipe dumping waste into a nearby farm.
The Fair Labor Association, a prominent labor standards non-profit, also said that Apple would join the group, opening it up to independent monitoring. In a statement, Apple's senior vice president of operations Jeff Williams said it was "extremely proud to be the first technology company admitted into the group."
wsj.com
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