Apple is once again facing criticism for the labor practices of its overseas suppliers, forcing the iPhone maker to defend its policy on worker rights. In a report published Monday, New York-based China Labor Watch (CLW) accuses Pegatron Group — a Taiwan-based Apple supplier — of committing labor abuses at three of its factories. According to CLW, Pegatron factory operators have been committing several safety and environmental violations over the past five months, withholding pay and forcing employees to work long hours in unhealthy conditions. All told, CLW's undercover investigation revealed at least 86 labor rights violations, including some that violate Chinese law.
"Our investigations have shown that labor conditions at Pegatron factories are even worse than those at Foxconn factories," CLW executive director Li Qiang said in a statement. "Apple has not lived up to its own standards."
Apple defended its oversight policy in a statement provided to the Wall Street Journal, reiterating its commitment to "safe and fair working conditions throughout our supply chain." The Cupertino, California-based company added that it has conducted 15 "comprehensive" audits at Pegatron factories since 2007, including some in the past 18 months. Apple acknowledged that some operators are withholding the identification cards that employees need to get jobs elsewhere — a claim included in CLW's report — but said it has ordered Pegatron to stop such practices.
"Their report contains claims that are new to us and we will investigate them immediately."
Pegatron isn't as high-profile a company as Foxconn — the China-based supplier at the center of many recent labor controversies — but its business is rapidly growing. According to the Wall Street Journal, Apple began shifting some of its manufacturing burden to Pegatron following the release of the iPad Mini last year, with the company looking to lessen its reliance on Foxconn. As a result, Pegatron's workforce has grown dramatically in recent months, increasing from 50,000 people in March to 70,000 this month. The three factories implicated in CLW's investigation — Pegatron Shanghai, RiTeng, and AVY — are responsible for manufacturing the iPhone, Apple computers, and iPad parts, respectively.
In March, Apple announced that 99 percent of its suppliers were in compliance with its self-mandated 60-hour work week limit, though CLW claims that Pegatron employees continue to work longer hours. In its statement, Apple said a June survey found that Pegatron employees worked an average of 46 hours per week, but CLW's investigations cited an average of between 66 and 69 hours per week — well in excess of China's government mandated 49-hour limit. Apple acknowledged the discrepancies Monday, and vowed to take action this week.
"Their latest report contains claims that are new to us and we will investigate them immediately," Apple said. "Our audit teams will return to Pegatron, RiTeng and AVY for special inspections this week. If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full."
Pollution, long hours, and unsafe conditions
Pegatron struck a similar tone in statements provided to the Wall Street Journal, defending its practices and promising to investigate CLW's claims. According to the report, chemical waste is poured directly into local sewage systems at two Pegatron factories, polluting local water supplies. CLW also alleges that employees are not trained on safe work practices, and that many see part of their wages go to third-party recruitment companies that Pegatron hires.
At Pegatron's Shanghai facility, workers were allegedly forced to sign papers claiming they worked fewer overtime hours than they actually did. The combination of poor working conditions and long hours has forced many to leave the company; CLW says 30 out of 110 factory employees quit their jobs over a two-week period. Pegatron insists that work weeks have been below 60 hours for the past two months, but acknowledged that it would investigate CLW's allegations.
"We will investigate [the allegations] fully and take immediate actions to correct any violations to Chinese labor laws and our own code of conduct," the company said in a statement.