An audit of Foxconn Technology Group found “serious and pressing” violations of Chinese labor laws, prompting the biggest maker of Apple devices to pledge to cut working hours and give employees more oversight.
Inspectors found at least 50 breaches of Chinese regulations as well as the code of conduct Apple signed when it joined the Fair Labor Association in January after deaths of workers at suppliers, the monitoring group said yesterday. Foxconn will bring hours in line with legal limits by July 2013 and compensate its more than 1.2 million employees for overtime lost due to the shorter work week, it said.
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Tim Cook
“The eyes of the world are on them and there’s just no way they can’t deliver,” said FLA President Auret van Heerden. “It’s a real showstopper.”
Assessors found cases of employees working longer hours and more days in a row than allowed by FLA standards and Chinese law. They uncovered inconsistent health and safety policies and instances of unfair pay for overtime work. To meet its commitments, Foxconn must hire, train and house tens of thousands of workers to assemble products for Apple, Dell, Hewlett-Packard and other customers, the FLA said.
“We appreciate the work the FLA has done to assess conditions at Foxconn and we fully support their recommendations,” Cupertino, Calif.-based Apple said in an e-mailed statement. “Empowering workers and helping them understand their rights is essential.”
Apple, led by CEO Tim Cook, fell after the report was released, dropping 1.3 percent to $609.86. Apple, the world’s most valuable company, will have to cut profit margins or pass resulting costs on to consumers, said Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong.
“The benefit we, the consumers, and Apple extract from these products at the expense of Foxconn and its workforce is completely unequal,” Moel said in an interview earlier this week.
“Foxconn will also have to meet these requirements for all its customers — Apple, Dell, HP — because it is at risk of being audited at any production line.”
Foxconn’s pledges will leave more money in the pocketbooks of workers and give them more time to spend it, dovetailing with government aims to rebalance the economy away from exports and toward domestic consumption.
Apple, Foxconn, Fair Labor Association, An audit of Foxconn Technology Group, FLA, Sanford C. Bernstein , employees
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