Apple today issued its Preliminary Proxy Statement via its Investor Relations website. As a publicly traded company, Apple issues this document annually, and it discusses pay packages for both executive team members and board members, company practices, and topics which shareholders will vote on at the upcoming shareholder meeting. Apple says that the next shareholder meeting will take place on February 28, 2014. Some interesting tidbits include that Apple’s board met seven times in 2013 with 75%+ attendance during each meeting. Additionally (to be voted on), a shareholder wants Apple to create a board committee related to human rights. Apple says that it is against this additional committee:
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…
Following audits and a major overhaul of workers’ rights at Foxconn factories in China, a report from newspaper Jornal de Jundiai (via Evertiq) claimed 2,500 workers at a Foxconn plant in Jundiai, Brazil are threatening to strike if the company does not meet their demands by May 3. The plant in Jundiai is currently responsible for the assembly of some of Apple’s iPhone 4 and iPad 2 units:
Newspaper Jornal de Jundiai reports that workers at the plant will strike if issues surrounding severe water shortages, food, and transportation of employees are not resolved… In a statement the United Steelworkers of Jundiaí and Region said workers decided to give 10 days (from the Monday) for the company to resolve the issues raised in a meeting on Monday… According to the report by Jornal de Jundiai, a spokesman from the union said that lack of water as well as poor quality food was an issue for workers. As the number of employees at the plant grows, workers also complain that the infrastructure for transport has remained the same size, causing overcrowding in buses. Read more
The results of the Fair Labor Association’s investigation into Apple’s suppliers beginning with three Foxconn facilities officially published yesterday. While finding excessive working hours and many violations of Chinese labor law, Foxconn and Apple agreed to reduce workweek and overtime hours within Chinese law to 49 hours per week and 36 overtime hours per month based on the FLA’s recommendations. Foxconn will also hire tens of thousands of new employees and implement a compensation package to make sure workers’ salaries remain the same amid reduced working hours.
In the interview above with Reuters, head of the FLA Auret van Heerden talked about the investigation and noted the agreement could set a new standard for working conditions throughout China. One unanswered question is whether the agreement will lead to higher prices for consumers (which is not necessarily a bad thing)…
We knew the Fair Labor Association would publish the initial findings of its investigation into Apple’s Foxconn facilities, and now the report is officially available through the organization’s website. The full report released today and is here. The press release outlining the investigation is below. According to the recommendations, Foxconn committed to “bring its factories into full compliance with Chinese legal limits and FLA standards on working hours by July 2013.”
The last we heard from the FLA about its audits into Apple’s Foxconn facilities was that it found “tons of issues.” Apple became the first technology company accepted as a member into the organization after controversies surrounding working conditions in Apple’s supply chains abroad became mainstream. As for what the FLA found in its audits of the three Foxconn facilities, here is an excerpt from the report:
FLA’s investigation found that within the last 12 months, all three factories exceeded both the FLA Code standard of 60 hours per week (regular plus overtime) and the Chinese legal limits of 40 hours per week and 36 hours maximum overtime per month. During peak production periods, the average number of hours worked per week exceeded 60 hours per worker. There were periods in which some employees worked more than seven days in a row without the required 24 hours off.
The FLA said Foxconn’s commitment will “reduce working hours to legal limits while protecting pay, improve health and safety conditions, establish a genuine voice for workers, and will monitor on an ongoing basis to verify compliance.” This will lead to a maximum 49-hour workweek, including overtime for employees and a decrease in monthly overtime from 80 hours to 36 hours. While we reported some workers were unhappy with working fewer hours, Foxconn also committed to a compensation package for workers with reduced overtime:
As the Fair Labor Association inspectors interview Foxconn employees about working conditions at iPad plants, early reports coming our way are a bit ambiguous and a tad confusing. First FLA president told Reuters that plant floors are spotless, then Bloomberg published an article claiming the organization found “tons of issues,” and finally those two video teasers (here and here) from ABC Nightline’s ‘iFactory’ documentary added ambiguity as the producers apparently “didn’t find any egregious violations.”
Knowing ABC’s parent company Disney has the Steve Jobs Trust as its largest shareholder, and considering that FLA is funded by the biggest players in the industry, including Apple who commissioned the Foxconn inspection that began last week, some watchers are speculating there must be more to this than meets the eye. Read on…