Three former members of the Apple Supplier Responsibility team say Apple was complicit in labor law violations in China. They are supported by a former Apple senior manager familiar with the company’s Chinese operations.

They say Apple was aware of the violations by its suppliers, but took no action because it feared that to do so might delay product launches …

The Information says that a new law was introduced in 2014, stipulating that no more than 10% of employees be hired on temporary contracts. This is because temporary workers have more precarious employment, and often receive fewer benefits.

The law allowed a two-year grace period for compliance, and Apple started out well by investigating how many suppliers would be in breach of the law when it took effect.

Apple surveyed 362 of its supplier factories in China that year and discovered that nearly half were over the quota for temporary workers. Eighty factories used temporary workers for more than half their labor force, according to an internal Apple presentation reviewed by The Information. Apple asked its suppliers to come up with plans to reduce their use of temporary workers by a March 2016 deadline, when a two-year grace period for the law expired.

However, little progress was reportedly made by the time the law came into force, and rather than take action against suppliers breaking the law, the former employees say that Apple decided to ignore it.

According to four former Apple employees familiar with its labor issues, Apple for years took no major action against its suppliers for violating the temp-worker labor law out of concerns it would create costs, drain resources and delay product launches. Three of the ex-Apple employees were members of its supplier responsibility team, which is in charge of monitoring violations and enforcing penalties, while the fourth was a senior manager familiar with its operations in China.

If true, it’s particularly embarrassing for Apple, which claims to have a responsible approach to its supply chain, ensuring that working conditions are both legal and reasonable.

The company has admitted some failures.

The issue surfaced again publicly last year when Apple admitted that Foxconn had broken the law at its massive iPhone factory in Zhengzhou, which can employ as many as 300,000 workers. Apple says it requires suppliers to abide by local laws and pledges to remove those that won’t comply.

A similar thing happened recently with Pegatron, when the company was found to have breached Apple’s supplier code, and Apple has also been reported to have dropped one of its iPhone camera suppliers over the use of forced labor. The company has also lobbied for changes to a forced labor bill that would impact American companies.

But the piece says that the underlying issue is Apple’s approach to product secrecy. To minimize the time for leaks, the company wants production to be delayed until as close as possible to the launch date. This makes it virtually impossible for suppliers to comply with the law, say the former staff – and Apple was well aware of this.

Apple executives knew that its production strategy caused the increase in demand for temporary workers, internal data shows. “Our ‘surprise and delight’ business model requires a huge volume of labor for only a short period of time as we ramp products,” according to an internal Apple presentation in 2015. “We are making it difficult for our suppliers to comply with this law as 10% dispatch is simply not enough to cope with the spikes in labor demand we require during our ramps.”

Apple said in response that it ‘works closely’ with suppliers to correct breaches of the law.

Workplace rights are human rights and our supplier code of conduct is the strongest in the industry, and it applies equally to everyone across our supply chain. Occasionally factories use temporary labor, and we monitor this closely to ensure compliance with our code. Where we find issues we work closely with the supplier on corrective action plans.

Photo: AP

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