Thursday, March 29, 2012

Fair Labor Association Report leads to Apple and Foxconn promises to change working conditions in China


Apple, Foxconn vow wide revamp of worker conditions
Reuters – Thursday March 29th at noon Los Angeles time

Readers,
The following story and my blog are preliminary. I have not yet read the FLA report and I am sure I will have some criticisms of the report given the approach taken by the FLA. However, without reservations, it has to be a good thing for Chinese working people that Apple and Foxconn are acknowledging issues and promising to take action. So read the news story below, and realize that the attention of American news and you the reader motivated much of what is reported below. Congratulations. 

Peter Schnall

Highlights below are mine. One goal mention in the article below of maintaing wages for individual workers seems unlikely, especially if hours go from 80 hours to 49 hr/week. Also, remember that workers wanted overtime. 

By Poornima Gupta and Edwin Chan

SAN FRANCISCO (Reuters) - In a landmark development for the way Western companies do business in China, Apple Inc said Thursday it had agreed to work with partner Foxconn to substantially improve wages and working conditions at the factories that produce its wildly popular products.

Foxconn - which makes Apple devices from the iPhone to the iPad - will hire tens of thousands of new workers, clamp down on illegal overtime, improve safety protocols and upgrade worker housing and other amenities.
The moves came in response to one of the largest investigations ever conducted of a U.S. company's operations abroad. Apple had agreed to the probe by the independent Fair Labor Association in response to a crescendo of criticism that its products were built on the backs of mistreated Chinese workers.

The Association, in disclosing its findings from a survey of three Foxconn plants and over 35,000 workers, said it had unearthed multiple violations of labor law, including extreme hours and unpaid overtime.

Apple, the world's most valuable corporation, and Foxconn, China's biggest private-sector employer and Apple' main contract manufacturer, are so dominant in the global technology industry that their newly forged accord will likely have a substantial ripple effect across the sector.

Working conditions at many Chinese manufacturers that supply Western companies are considerably inferior to those at Foxconn.

"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," FLA President Auret van Heerden told Reuters in an interview.

More immediately, the Apple-Foxconn agreement will raise costs for other manufacturers who contract with the Taiwanese company, including Dell Inc, Hewlett-Packard, Amazon.com Inc, Motorola Mobility Holdings, Nokia Oyj and Sony Corp.

The agreement will likely result in higher prices for consumers, though the impact will be limited because labor costs are only a small fraction of the total cost for most high-tech devices.

Foxconn said it would reduce working hours to 49 hours per week, including overtime, while keeping total compensation for workers at its current level. The FLA audit had found that during peak production times, workers in the three factories put in more than 60 hours per week on average.

To compensate for the reduced hours, Foxconn will hire tens of thousands of additional workers. It also said it would build more housing and canteens to accommodate that influx.

Apple CEO Tim Cook, who company critics hoped would usher in a more open, transparent era at Apple after he took over from the late Steve Jobs last fall, has shown a willingness to tackle the global criticism head-on.

The much-anticipated report marks the first phase of a probe into Apple's contract manufacturers across the world's most populous nation. With 1.2 million workers, Foxconn - an affiliate of Taiwan's Hon Hai Precision Industry - is by far Apple's largest and most influential partner.

(Reporting By Edwin Chan; Editing by Gary Hill)


Wednesday, March 14, 2012

Why Is the GOP Suddenly Turning Against College? (or why the U.S. no longer needs a highly trained and skilled blue collar workforce)

Most of the article below comes from James Kwak in this week’s issue of the Atlantic. Tx James.

By contributors@theatlantic.com (James Kwak) | The Atlantic – Mon, Mar 12, 2012 10:51 AM EDT, Reuters

…..  Paul Krugman argues that Republicans prefer tax cuts to education for political reasons: Their goal to preserve upper-class prosperity comes at the expense of heightened middle-class insecurity. While this is probably true, I think there is more to it. Today, Republicans are turning their backs on higher education because of two historical trends. One is globalization. The other is the anti-tax revolution.

Imagine for a moment that the American political system is controlled by rich people. (That shouldn't be too hard.) In the mid-twentieth century, the United States had by far the largest economy in the world. American companies located most of their operations domestically; foreign direct investment was relatively difficult; and global securities markets were relatively undeveloped, making it hard to invest in foreign countries.

For these reasons, if American elites wanted to make more money, they needed American companies to become more profitable. Since American companies relied on American workers, they needed those workers to become more productive. In that situation, it made sense for the upper class to invest in education for the masses (via taxes and government spending on public education) so they could have a more productive workforce. If, instead, they took all their money and built huge houses in the Hamptons with it, the companies they owned (directly or indirectly) would grow slowly and become uncompetitive.

Today, however, we live in a much more globalized world. Large American companies locate much of their operations overseas and can draw on talented labor all around the world, essentially free-riding off of other countries' educational systems--many of which are at least the equal of our own. We like to think manufacturing has shifted to China because of cheap labor, but it's also because only in China can you hire 8,700 engineers in 15 days . This means that American companies are far less dependent on the American workforce than they were half a century ago.

To which I would add you can also hire a blue collar workforce for 50 cents an hour in China willing to work 12 hours a day 7 days a week reducing the need for a well-trained U.S. workforce reinforcing the migration of manufacturing overseas. 

Wednesday, March 7, 2012

Apple has joined the Fair Labor Association: What does it mean?

By Ellen Rosskam  and  Peter L. Schnall

We thought that the interested reader might want to know a bit more about the Fair Labor Association (FLA) which has been retained by Apple Corporation to evaluate whether Apple’s suppliers are adhering to Apple’s standards for the proper treatment of their workforce. This standard is outlined in the Apple Supplier Responsibility Progress Report (Apple_SR_2012_Progress_Report)  We quote from the report … “We require that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made”. Unfortunately, as many readers are certainly aware questions have been raised about several companies that supply Apple as to whether or not they are in violation of these policies. Among the issues raised are excessive overtime (more than 60 hours of work per week), crowded dormitories, military like working conditions, lack of breaks, mental harassment, etc. (the list goes on and the reader should refer to earlier blogs posted here). Foxconn itself acknowledges turnover rates in excess of 75% per year (Walmart which is considered a terrible U.S. company to work for has a turnover rate of 50 to 60%). High turnover rates are considered a good indicator of the stressfulness of a company to work for.

Apple has responded to the barrage of news and criticisms about Foxconn ( a major Chinese supplier of Ipads and Iphones) by releasing for the first time a list of its official suppliers. More importantly, on January 13, 2012, Apple joined The Fair Labor Association (FLA) as a Participating Company (PC) - the first technology company to join the FLA. The FLA works to end sweatshop working conditions around the world. As a PC, Apple commits to bringing their entire supply chain into the FLA program. This means FLA will visit, inspect and evaluate companies like Foxconn as to their adhearance to Apple and FLA standards.

FLA’s Goals

The FLA promotes core international labor standards. Details of the FLA’s Code of Conduct based on core international labor standards are provided below.[1] 
The Fair Labor Association is a non profit organization that combines the efforts of socially responsible companies, civil society organizations and colleges and universities to protect workers’ rights and improve working conditions worldwide by promoting adherence to international labor standards. The FLA conducts independent monitoring and verification to ensure that the FLA’s Workplace Standards are upheld where FLA company products are produced. Through public reporting, the FLA provides consumers with credible information to make responsible buying decisions. FLA Participating Companies agree to uphold the FLA Workplace Code of Conduct throughout their supply chains and commit to the FLA’s Principles of Fair Labor and Responsible Sourcing...Like all new affiliates, Apple will align its compliance program with FLA obligations within the next two years.[2]

Well yes, but as they say the devil is in the details. It seems fair to ask if FLA is truly an independent organization able to carry out the mandate outlined above. The problem is that the monies for the extensive audits, salaries of staff, etc. required by FLA to conduct their evaluations all come from the companies that are members of the FLA. This means Apple is paying for its own audit. Obviously, this is a less than optimal situation.

The FLA Workplace Code of Conduct

The FLA Workplace Code of Conduct defines labor standards that aim to achieve decent and humane working conditions. The Code’s standards are based on International Labor Organization standards and internationally accepted good labor practices. These include practices generally considered for corporations that want to be recognized as “socially responsible.” PCs are expected to comply with the relevant laws and regulations of the country in which workers are employed and to implement the FLA Workplace Code in their applicable facilities. The FLA accredits independent third-party monitors and engages them to conduct un-announced audits annually of a group of randomly selected factories that supply products to FLA-affiliated brands and universities.

What is wrong with FLA’s Code of Conduct

These standards are good as far as they go but they are 25 years out of date.  A great of research has been undertaken examining not just the role of the physical environment in causing ill health but also the psychosocial work environment (e.g., job strain, ERI, social isolation, injustice, lack of mobility, etc.). Psycho-social work hazards are not even mentioned in any international labor standards related to occupational health and safety nor are they part of the FLA’s evaluation of the workplace.[3]  This is not surprising. Science evolves faster than the international standard setting process, which is long and arduous - even updating international labor standards can takes years. Needless to say, the FLA’s Code of Conduct also does not address psycho-social work hazards. This is why the director of the FLA – Auret Van Heerden could visit Foxconn, look at the well lit and clean factory floors and declare that “facilities are first-class” and “Foxconn is really not a sweatshop”. Yes it is first class and not a sweat shop compared to other Chinese companies but this does not make it a healthy place to work.

Given the FLA’s flexibility it would be good if its Code were revised to address psycho-social stressors. Implementing the FLA’s Code is no easy undertaking in countries where labor laws are weak and not enforced, such as in China, or where there are no protective labor laws at all.




Wednesday, February 22, 2012

Foxconn workers sickened by N-Hexane - a letter from 2 workers


The letter below was written by Gou Rui-Qiang and Jia Jing-Chuan, and translated from Chinese for SumOfUs members. They worked in an Apple factory in Suzhou, China cleaning iPhone touch screens until their nerves were permanently damaged by chemicals used during cleaning.


Dear SumOfUs Members and Friends –

You don't know us but you have seen our work. Until recently, we worked long hours assembling Apple’s iPhone touch screens in Suzhou, China. In early 2010, it was independently confirmed that 137 workers, including us, were poisoned by a chemical called n-hexane which was used to clean iPhone screens. N-hexane is known to cause eye, skin and respiratory tract irritation, and leads to persistant nerve damage. Apple admitted to gross labour rights violations more than a year later.

If more people know about what we went through, Apple will feel pressured to change so other workers don’t have to suffer like we did.


We have been pressuring Apple, and its new CEO Tim Cook, for years to compensate those of us who were injured working for them, and demanding reform of working conditions at their Chinese factories so that their workers don’t suffer like we do. Now we need your help as customers or potential customers of Apple.

We need your help to send a message to Apple before their shareholder meeting on Thursday, Feb. 23rd. We want to see a strict corporate social responsibility and reform of the audit system to prevent similar tragedies in the future. He will listen to you as current or potential consumers.

You’ve already signed the petition, and 82,000 others have too -- for that, we thank you. We believe it’d be symbolicly powerful if 100,000 people signed the petition before SumOfUs delivers it to Tim Cook on Thursday at their shareholder meeting. We’re really close to that goal, but we need you to share our request with your friends to get over the edge.


It has been over two years since many of us were hospitalized and treated but our debilitating symptoms continue. Rui-Qiang still can't find work because he can no longer stand for the long hours most jobs require. Jing-Chuan has to spend nearly $100 a month on health supplements.
But with all of us working together to pressure Apple to change, we can make sure what happened to us doesn’t happen to others too.

- Gou Rui-qiang and Jia Jing-chuan

Sunday, February 19, 2012

Are recent salary increases announced by Foxconn going to solve the problems at Foxconn?

by Peter L. Schnall, MD MPH

David Barbosa reported in The NY Times today, Feb 19th 2012, that Foxconn has announced it will sharply raise salaries for workers in its Chinese factories by 16 to 25% bringing wages to about $400 month which is $16 day (1).

This is a large wage increase but will it really solve the problems related to overtime as well as those due to the organization of work at Foxconn which includes a militaristic work environment, reports of punitive actions for rule breaking, monotonous work, lack of breaks, low social support, inability to talk with co-workers during working hours, among many other issues?

One psychosocial factor associated with work is called “effort reward imbalance” or ERI for short.  This model of work stress was pioneered by Johannes Siegrist and defines threatening job conditions as a “mismatch between high workload (high demand) and low control over long-term rewards" When ERI is present this results in stress and has serious health outcomes (e.g., depression and hypertension) See www.unhealthywork.org for more details about psychosocial work stressors. 

Long-term rewards include job security and possibility for upward mobility (promotion prospects) as well as wages. So raising wages may help here but the key issue is not simply the absolute level of wages but the nature of the rewards and the imbalance between effort and reward.  Workers by all reports are putting in enormous effort (80 hours of work per with overtime), and the rewards workers are looking for include support on the job, job security, opportunity for advancement and a sense of purpose (2). After all, what is the point of having money if one doesn’t have a community in which to live and a future.

Most of the problems reported at Foxconn have little to do with whether workers are receiving an adequate wage. This is implicitly acknowledged by Foxconn, which also announced yesterday that they would begin reducing “mandatory” overtime hours at its factories. Unfortunately 60 hours of work per week, which is the law in China, is not enforced and is also excessive and harmful.  Still moving toward 60 hours work/week with higher wages are both steps in the right direction.

When will Foxconn and Apple begin to acknowledge and address the issues of work organization, which many have been documenting over the past several years?  When will China enforce its own labor laws regarding work hours?    


Schnall PL, Landsbergis PA. Job Strain and Cardiovascular Disease. Ann. Rev. Public Health 1994, 15:381-411.


Friday, February 17, 2012

What is wrong with the approach of the Fair Labor Association to Foxconn


The following article "Apple iPad plant conditions better than the norm" was published in the Chicago Tribune on Feb 15, 2012. The article is an interview with Auret van Heerden, a famed South African Labor Activist, who is currently head of the FLA (The Fair Labor Association). The FLA has been asked by CEO Tim Cook of Apple Corporation to investigate possible violations of Apples Fair Labor Practices by Foxconn and other Chinese corporations that have contracted with Apple Corporation to produce iPads and iPhone. At this time, I have no doubt that Auret van Heerden is well meaning and knowledgeable about many aspects of working conditions in China and elsewhere. However, i have serious concerns about his comments as quoted below. I have inserted my thoughts in red after his comments below, which are in black.


Peter L. Schnall
Professor of Medicine, U. of California at Irvine

Apple iPad plant conditions better than the norm - Chicago Tribune 

Working conditions at Chinese manufacturing plants where Apple Inc's iPads and iPhones are made are far better than those at garment factories or other facilities elsewhere in the country, according to the head of a non-profit agency investigating the plants. 

"Far better" is not the same as "good" and certainly is not the same as healthy working conditions.  Yes, electronic assembly plants are clean and well lit. Textile firms don't have these requirements. Anyone who has watched "China Blue," the DVD that documents conditions in a China blue jean manufacturing plant knows that conditions in many Chinese factories are very close to slave labor. 

The Fair Labor Association (FLA) is beginning a study of the working conditions of Apple's top eight suppliers in China, following reports of worker suicides, a plant explosion and slave-like conditions at one of those suppliers, Foxconn Technology Group.

If FLA is just beginning a study of conditions at Foxconn, why is it that the President of the FLA is making broad statements, such as conditions "are far better" before all the facts are in?  There are many aspects of the work environment that are not detectable by observation alone (see comments below).

Auret van Heerden, president of the FLA offered no immediate conclusions on the working conditions, but he noted that boredom and alienation could have contributed to the stress that led some workers to take their own lives.

Well, it is hard to imagine how workers putting in 80-hour work weeks would only be bored. Exhausted maybe. I can understand "alienated" as it very hard to imagine putting in 12 hour workdays - 7 days a week - in a job with few breaks and no opportunity to talk with one's co-workers and not be alienated. In fact, the production line at Foxconn is a classic example of an alienated (cause (someone) to feel isolated or estranged) job. A sincere thank you to Auret van Heerden for acknowledging the possibility that the suicides at Foxconn may be work-related.

In addition to Foxconn, FLA investigators will later visit facilities of Quanta Computer Inc, Pegatron Corp, Wintek Corp and other suppliers, who are notoriously tight-lipped about their operations.After his first visits to Foxconn, van Heerden said, "The facilities are first-class; the physical conditions are way, way above average of the norm."

Well, maybe yes, if we are referring to just the physical environment which after all is designed for electronics assembly (sterile, clean, well-lit, etc). But there are other aspects of the job that are physical including standing in one place for 12 hours a day. There are numerous reports of workers developing swollen legs after standing for many hours without much movement. Also there are reports of numerous repetitive motion injuries (from repeating the same task again and again) as well as burns from dealing with solder and hot electronic parts. 

He spent the past several days visiting Foxconn plants to prepare for the study. "I was very surprised when I walked onto the floor at Foxconn, how tranquil it is compared with a garment factory," he said. "So the problems are not the intensity and burnout and pressure-cooker environment you have in a garment factory. It's more a function of monotony, of boredom, of alienation perhaps."

Yes, Foxconn is not a textile plant in China, so IT may not be as hellish? But how can he know whether workers are suffering from burnout?  This is an internal emotional state assessed by a questionnaire - usually the MBI (Maslach Burnout Inventory). You cannot just look at someone and know if they are anxious, depressed or burnt out. You have to ask them.

He noted that the organization has been dealing with suicides in Chinese factories since the 1990s. So young people are committing suicide in plants all over China not just at Foxconn. This undermines the argument made by a number of apologists for Apple that the prevalence of suicides at Foxconn is no different than the population as a whole. This argument ignores the clustering of cases among young people. It does make sense that young people coming from farms or being forced off farms, confronted with horrendous working conditions (despite higher earnings than they had previously) might develop despair, especially if they lose hope that conditions will improve in the future.

"You have lot of young people, coming from rural areas, away from families for the first time," he said. "They're taken from a rural into an industrial lifestyle, often quite an intense one, and that's quite a shock to these young workers."And we find that they often need some kind of emotional support, and they can't get it," he added. Factories initially didn't realize those workers needed emotional support."Van Heerden dismissed the notion that his organization might paint a cursory and positive picture of Apple's suppliers.

But he already has been cursory by making comments without collecting all his facts. One thing seems clear to date about FLA and Apple Corporation, they appear to believe that 80-hour work weeks are not extraordinary. (Western countries have struggled for 100 years to arrive at a 35-40 hour workweek). Also neither Auret van Heerden nor Tim Cook have yet evidenced any knowledge of 1) the negative health impact that long work days and work weeks has on health, or 2) awareness of the impact that workplace psychosocial factors such as job strain, effort reward imbalance, social isolation, lack of social support from supervisors and co-workers have on mental and physical well being (see our website "Unhealthy Work" for much more on these noxious workplace exposures).



Companies that join the FLA abide by rigorous commitments, and their interests are balanced by non-governmental organizations and more than 200 universities that sit on the board of the organization with the corporations, he said,FLA evolved from a group originally convened by U.S. President Bill Clinton in 1996 with the goal of reducing sweatshop labor around the world. Its board includes executives from sneaker companies Nike and Adidas. "Apple didn't need to join the FLA," he said. "The FLA system is very tough. It involves unannounced visits, complete access, public reporting”.

This is an excellent point but it is incomplete. Surprise visits focus attention on dangerous environments, underage workers, etc but ignores work organization and long work hours, as issues. But still – my hats off to Apple – they are moving in the right direction by asking for outside help.

It is a shame that the “outside help” aren’t more cautious with their statements about the quality of working conditions and we can only hope they are informed about the full range of workplace surveillance tools available to assess working conditions. "If Apple wanted to take the easy way out there were a whole host of options available to them," he added. "The fact that they joined the FLA shows they were really serious about raising their game."

RESPONSES ENTERED ON IPADS 

Some 30 FLA staff members are visiting two Foxconn factories in Shenzhen in southern China and one in the central city of Chengdu. Each plant has about 100,000 workers, although not all work on Apple products.Over three weeks, some 35,000 workers will be interviewed about 30 at a time to answer questions anonymously, entering their responses onto Apple iPads.

Why are they using apple iPads? Isn't this potentially intimidating? Will workers not believe that Apple will somehow identify them and use the information provided to punish them?

Questions will include:

* how the workers were hired

* if they were paid a fee

* if they were offered and signed contracts and whether they understood them

* the condition of their dorm rooms and food

* if complaints are acted upon

* their emotional well being

These questions are ok, but they don't go far enough. What about breaks, rest time, social isolation, wages, workers perception of fairness and justice, questions about imbalances between effort and rewards. Promotions, job security, etc. Finally, at least one open ended question so workers can mention something not in already covered. These are the kind of items that any U.S. researcher would want to collect.

The data will be uploaded immediately and consolidated, and an interim report will be made public in early March. The eventual FLA report will identify areas the suppliers need to improve and offer suggestions, van Heerden said, "There might not be a clear policy on hiring, that could lead unwittingly to discrimination against hepatitis B sufferers," he said as an example, "There might not be adequate documentation that could lead to the risk that workers get hired with fake documentation, that underage workers come in . We can recommend very specific actions they can take.

Finally, my colleague Paul Landsbergis writes to me upon reading the above, “The biggest problem with the article is that it assumes that the FLA will make a difference. It has not made much of a difference since it was founded. The only way that working conditions will change is when the workers get the right to organize and collectively bargain. Anything else will be a sham”.

Sunday, February 12, 2012

Letter from Li Qiang, Director of China Labor Watch to Tim Cook


To our readers,  

Below we are printing the letter from Li Qiang, Director of China Labor Watch to  Mr. Tim Cook, CEO at Apple Corporation concerning working conditions and the health of workers at Foxconn Corporation, a supplier of Apple iPads and iPhones. China Labor Watch is one of the foremost authorities on working conditions in China, a country with a seriously under-developed occupational health and safety infrastructure. China also appears to have little commitment to improving the  conditions of working people in China. In a subsequent blog this coming week we  will expand on the issues raised in the letter from Li Qiang to Apple.  

Peter Schnall and Erin Wigger


“Dear Mr. Cook,

…Although the international anti-sweatshop movement has recently trained its focus on Apple's supply chain, I find that the labor conditions in Apple's Chinese supplier factories are actually not the worst of the factories used by multinational electronics companies there.

However, this is what "not the worst" means for workers in the factories that make your products:

 - They have to work as long as 11 hours a day, 7 days a week with only one hour-long break during lunch. For this they only make about 2000 RMB a month, which at current exchange rates is only $320.

 - Those that work in the iPad case polishing workshop are exposed to vast amounts of aluminum dust and may be injured or even killed in an explosion should the dust ignite. This has happened twice in the past year. First, in May 2011 at a Foxconn plant in Chengdu (3 killed, 15 injured) and then in December 2011 at a Foxconn plant in Shanghai (61 injured).

 - At the factories of Foxconn, one of your largest suppliers, 13 workers committed suicide in 2010. Foxconn's response of putting up nets on factory buildings to catch suicidal jumpers indicates that it believes this is an ongoing concern, since many of the environmental factors that may have led to the workers taking their lives -- including long working hours, social isolation and loss of agency -- remain unchanged.

As a result, that Apple's suppliers aren't the worst in the Chinese electronics industry probably says more about other Chinese factories than it does about the ones your company uses. 

As you said in your letter of January 26th to Apple's employees, Apple has done more recently to improve these conditions, having disclosed its full list of supplier factories, made efforts to "inspect more factories" and "educate workers about their rights" and even "opened our supply chain for independent evaluations by the Fair Labor Association." This assumes that the problem is with Apple's suppliers, rather than with Apple itself. However, there are still two big questions that Apple needs to answer before it can truly claim that this is the case.

First, how can a company that claims to make working conditions a priority make such astronomical profits at a time when those making its products are obviously suffering? Recently, Apple has seen its profitability soar to new heights. In the first quarter of the 2012 fiscal year, Apple made $46.33 billion in revenue and made a net profit of $13.06 billion, its largest profit ever and one of the largest quarterly profits of any American company in history. And you, personally, received stock options worth $380 million shortly afterwards. Let's do some simple math. The $13.06 billion net profit Apple made in one single quarter is equal to the combined salary of 300,000 workers at Foxconn's assembly line over the course of eleven years. And the value of your options alone could pay for those 300,000 workers' salaries for that extremely profitable quarter. And remember, those workers have to work 240 hours a month or more and some workers are required to stand all day long without a restroom break.

Second, how can a company with as much control over its manufacturing process as Apple has not already know what labor conditions are like in its supply chain? From our research, the production processes (and by extension, the intensity of the work that employees have to perform) at supplier factories have been approved by Apple. Apple's quality controls mean that only those who meet the standards Apple design can get a production order. The raw materials the factories use have to be purchased from the suppliers Apple designates. As a result, most supplier factories manufacture products according to Apple's specific guidelines and have no ability to alter them.

We believe that the answer to these questions is that the problem is not a result of a few "bad apples," in the midst of the supply chain but is rather deeply rooted in your company's business model. It's a systemic problem resulting as much from decisions made in Cupertino, California as from those made in Chengdu, China.

We believe the most basic cause of the problems at Apple's supplier factories is the low price Apple insists on paying its supplier factories, leaving next to no room for them to make a profit. The demand for astronomically high production rates at an extremely low price pushes factories to exploit workers, since it is the only way to meet Apple's production requirements and make its factory owners a profit at the same time.

To be fair, Apple's problems are not unique. They are faced by the entire electronics industry and its customers as they attempt to manage a global manufacturing system that locates factories wherever the cost of production is cheapest. The key choice Apple has to make as a company is whether it will try to shift the attention of journalists and the public towards the individual factories that make their products, or will sincerely acknowledge its responsibility for these factories' deplorable working conditions and make systemic changes to its supply chain.

Over the years, China Labor Watch has sent many letters to Apple about our investigations of its Chinese supplier factories, hoping that we could work together to find a way to solve the problems workers face. But Apple has never responded. However, we now feel that perhaps the time for analysis has ended. There is a simple solution for the problems we have observed in Apple's supply chain. And it doesn't even involve raising the prices on the American consumer who buys its products. It is simply sharing a larger proportion of Apple's sizable profits with the supplier factories it contracts with, and by extension, the people who make its products. And perhaps if Apple's customers no longer have to worry about the ethical implications of buying an iPhone, it will be able to go on to earn even more in the future.

Sincerely,

Li Qiang
Founder and Director, China Labor Watch