Bloomberg has a lengthy piece illustrating just how great a challenge it is for Apple and other multinational companies to ensure the fair treatment of workers in complex supply chains.
When one of Apple’s suppliers like Flextronics wins a new contract, it needs to take on additional workers – lots of them, and fast. Those workers are recruited through employment brokers, which are required to adhere to Apple’s rules. But many of them are brought in from other countries, like Malaysia and Nepal.
Alok Taparia, the managing director of Transworld Manpower, another of the four Nepalese brokers retained for that drive, says he was given clear instructions: Workers shouldn’t be charged; Flextronics would pay the brokers. But Taparia and the other Nepalese brokers say Flextronics demanded so many men so quickly that there was no way to do it without tapping the country’s network of subagents, stretching into Himalayan villages reachable only by foot. As Apple itself has described in reports on its supply chain, the subagents always charge…
Workers recruited from neighbouring countries can end up needing to pay several layers of agents and sub-agents for their jobs. Without the cash to do so, they take on loans – and are required to surrender their passports as security. The piece says that Apple’s attempts to deal with this are proving less successful over time.
Apple in 2009 tried barring suppliers from using workers who had been charged more than one month’s net factory wages. But by Apple’s own accounting, the problem got worse. Last year the company’s audits turned up $6.4 million in fees paid by workers beyond the company’s prescribed limit—compared with $6.7 million in the previous four years combined. And Apple audited fewer plants last year than it did in 2011. The company orders its suppliers to refund workers charged beyond its limit.
One worker’s plight is used to illustrate just how badly things can go wrong. 27-year-old Bibek Dhong started work for Flextronics, testing iPhone cameras, already $1000 in debt to agents. When the company hit quality control problems, and was forced to shutdown production, Dhong and his fellow workers were left redundant, in debt and – with their passports held by local agents – no way to get home.
Having wired home much of their money in anticipation of following close behind, many started running out of cash. Then they ran low on food. The first to go hungry were among a group of younger men who had relied on a local restaurant outside the hostel to give them a meal a day on credit. The owner cut them off when he found out they’d lost their jobs, Dhong says. Hunger soon spread to almost everyone.
Even when he was eventually allowed home, around a third of his income is used to pay interest on loans for payments on a job he no longer has.
Dhong and his wife see only one escape: borrow more money and pay for another job abroad. Many other former Flextronics recruits say they will do the same.
Apple says that it has led the industry in addressing such abuses, and has helped contract workers reclaim $16.4 million since 2008. Flextronics’s Bukit Raja facility is no longer in Apple’s supply chain.