Apple’s history with Taiwanese manufacturer Foxconn and its sprawling network of suppliers in Southeast Asia is checkered with stories concerning the human rights abuses rampant in the region, and the company has made much progress in the effort to resolve them. Today, a Bloomberg Businessweek report reveals how, following last year’s iPhone 5 announcement, the pressure to produce components for the new Apple smartphone resulted in workers on factory lines being forced into debt and indentured servitude.
The report details the push to find workers to produce the iPhone 5’s 8-megapixel camera, and the means by which companies like Flextronics International, one of Apple’s largest suppliers, recruit for positions on factory assembly lines. According to Bloomberg, companies recruit across the poor cities and villages of Indonesia, Cambodia, Myanmar, Vietnam, and Nepal to staff up the army of workers needed to create components. To accomplish that task, recruiters hire brokers, who charge families high fees — often a year's worth of wages, with interest — for the opportunity to work on the supply side.
Factory workers were reportedly also obliged to surrender their passports to brokers to ensure they paid off their debts. This practice amounts to the very same kind of bonded labor that Apple has tried to combat in its recent supply-chain audits. According to Bloomberg, Flextronics has commissioned an outside group to conduct an investigation into the fees being foisted on recruits. Apple spokesperson Chris Gaither told Bloomberg that the company will ensure that "the right payments have been made."
"I am in debt already, but I need to borrow more on top of that to be able to go away."
In the case of the 1,500 workers who worked at Flextronics’ Malaysian factory complex surrounding the iPhone 5 launch, many were reportedly forced to pay off their debts by selling their land, and must look to recruiters to find new tech jobs in order to make ends meet. As Bibek Dhong, a Nepalese worker cut loose by the factory, told Bloomberg, "I am in debt already, but I need to borrow more on top of that to be able to go away."
In the days since the iPhone 5’s release, Apple has continued to fight hard against labor abuses, despite the issue being so entrenched. Its most recent Supplier Responsibility Progress Report also showed its willingness to cut ties with suppliers that recruit children. However, even though the company stands by its worker rights record, it continues to face criticism for its suppliers' labor abuses.
Reached for comment on the story, Apple gave us this statement:
Apple has led the industry in uncovering and preventing the abuse of migrant workers, and our efforts have helped improve the lives of people who make our products. We were the first electronics company to mandate reimbursement to employees who were charged excessive recruitment fees, and our program has helped contract workers reclaim $16.4 million since 2008.
We aggressively investigate any claims of bonded labor where Apple products are made, and our team is continuously auditing deeper into the supply chain. We recently updated our code of conduct to require our suppliers to directly interview workers who are hired through labor brokers, as another way of eliminating unethical practices.
Although Flextronics’ Bukit Raja facility is no longer in Apple’s supply chain, we take these allegations extremely seriously. Flextronics has commissioned a third-party audit and pledged to fully reimburse any workers overcharged by labor brokers. We will actively follow up to ensure the right payments have been made.