A report released on Sunday by China Labor Watch, a nonprofit rights group, accused Apple and its manufacturing partner Foxconn of a litany of labor violations, ranging from withholding of bonuses to cancellation of the job safety training for more temporary workers than Chinese laws allow.
The report was based on observations and documents gathered by undercover investigators working at China’s largest iPhone factory in Zhengzhou. The group said one of the investigators had been employed by Apple for four years.
Apple spokeswoman Lori Lodes denied most of the allegations, but admitted that Apple had exceeded the number of contract workers allowed by Chinese law, which capped the ratio at 10%. Contract workers receive attractive overtime wages, but do not receive the benefits of full-time workers. “We confirmed that all workers are paid appropriately, including wages and overtime bonuses, all overtime was voluntary and there was no evidence of forced labor,” Lodes said.
Foxconn, the maker of Apple, has admitted a higher percentage of temporary workers than allowed at its factories, but has denied other claims. “A recent review of our operations at our Zhengzhou plant identified some workforce compliance issues,” Foxconn spokesperson Allanjit Singh wrote in an emailed statement. He denied other allegations such as forced labor or withholding of workers’ bonuses. “Our work to resolve the issues identified at our Zhengzhou factory continues and we will closely monitor the situation,” he wrote.
The report accuses Apple of partly exploiting Chinese workers to absorb the costs associated with tariffs on its products. “Apple is now passing the costs of the trade war through its suppliers to workers and profiting from the exploitation of Chinese workers,” the report said.
The report alleges that Foxconn uses outsourcing companies, known as “shipping companies,” to meet seasonal fluctuations in demand.
For example, new iPhone models require huge increases in manpower to meet demand.
Apple is expected to announce the new version of its iPhone on Tuesday, like every fall. Although Apple has seen demand for the iPhone slow, it sells millions of its new handsets every quarter. According to Strategy Analytics, Apple sold 16.2 million units of its iPhone XR in the second quarter of 2019. That’s 12 million more than Samsung’s most popular phone model, the Galaxy S10 Plus.
Producing so many units with consistency and profitability is perhaps Apple’s greatest trick. But China Labor Watch accused Apple of saving money to do so. “Multinational corporations have contributed to China’s economic development, but they have also exploited loopholes in Chinese labor law,” the report said.
The association said it had been investigating Apple’s manufacturing practices for a decade and had received complaints from workers ranging from exposure to toxic chemicals to verbal abuse at forced labor.
The publication of the report was first covered by Bloomberg.
Apple has been criticized in the past for working conditions at its factories and has responded with an annual review of the treatment of workers at its factories, which it publishes in a report on supplier responsibility.
The report blamed some of the blame on the Chinese government for turning a blind eye to labor law violations. He urged Apple CEO Tim Cook to pressure suppliers to comply with Chinese labor laws whether or not they are enforced.