Report Prompts Apple And Foxconn To Improve Factory Conditions

The Fair Labor Association (FLA) has published its report on Apple’s largest supplier Foxconn, looking into working conditions at the Chinese company’s three factories in Guanlan, Longhua and Chengdu.

The investigation found “serious and pressing noncompliances with FLA’s Workplace Code of Conduct, as well as Chinese Labour law” and suggested a series of remedial measures which Apple and Foxconn are now looking to implement.

Pressing problems

Apple requested the FLA look into Foxconn’s factories last month following high profile allegations of excessive hours and poor pay. In early reports, the head of the FLA, Auret Van Heerden, portrayed a positive image, citing “first-class” facilities and conditions “way, way above average of the norm”.

The actual findings proved to be much more damning. The FLA found at least 50 issues related to “health and safety, worker integration and communication, and wages and working hours”.

Regarding working hours, the investigation found that workers at all three factories exceed the FLA and Chinese legal limits during peak production times. Many employees also worked more than seven days in a row without a required 24-hour break.

A survey of a sample of workers showed that an average working week was 56 hours, greater than the Chinese limit of 40 hours (49 if overtime is included) but lower than the 60 of the FLA Code Standard. A significant number of employees also exceeded the overtime limit of 36 hours per month at the three factories, with 80 percent of the Guanlan workforce surpassing the limit between September 2011 and January 2012. Just under half of the sample of workers said they had previously worked 11 or more consecutive days without a break.

“The root causes [of the excess hours] include high labour turnover, which undermines efficiency, and gaps in production and capacity planning,” the report said.

As pointed out in the report, a sizeable proportion of the workforce required such long hours to support themselves and their families.

“When asked in the survey how they feel about working hours, 48 percent thought that their working hours were reasonable, and another 33.8 percent stated that they would like to work more hours and make more money,” the FLA said. “17.7 percent of the respondents felt that they worked too much.”

Although Foxconn raised wages shortly after the FLA’s investigation began, and although all three factories pay a fair amount above regional minimum wage, 64.3 percent of workers said their salary was not enough to cover basic needs. In Chengdu, where the average pay was lower, 72 percent expressed discontent.

Tied into this wage issue was the arrangement of overtime pay, wherein workers were only credited in 30 minute chunks. This means that an additional 29 minutes of work nets no extra pay, and 59 minutes only equals half an hour more.

Remedial measures

To resolve these matters, and others found during the FLA’s study, Apple and Foxconn have agreed to a series of measures which could influence manufacturing operations for other technology companies.

“We appreciate the work the FLA has done to assess conditions at Foxconn and we fully support their recommendations,” Apple said in a statement. “We share the FLA’s goal of improving lives and raising the bar for manufacturing companies everywhere.”

Foxconn will aim to fully comply with Chinese working hour limits by July 2013, while providing lost overtime compensation to its 1.2 million workers. To maintain output, particularly in high activity periods, the factories will hire approximately 10,000 extra employees to support and even out the workload.

“Apple and Foxconn are obviously the two biggest players in this sector and since they’re teaming up to drive this change, I really do think they set the bar for the rest of the sector,” van Heerden said in an interview with Reuters.

The move may improve conditions at Foxconn, but could make other manufacturers like Quanta and Pegatron cut costs to attract rival tech giants, or force said giants to up the price of their goods.

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