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.
Founder and Director, China Labor Watch