APPLE AND ITS SUPPLIERS: CORPORATE SOCIAL RESPONSIBILITY
Question 1
In the present age where globalization has grown to large extents, large corporations are taking advantage and outsourcing important business activities to different countries. More so, large companies are targeting countries with large populations as the demand for jobs is high and the supply of labour is also higher. This combination sets a perfect condition where workers are paid low wages. Apart from that, they are also subjected to poor working conditions. The company, to reduce its total cost of production, does all this. This, in turn, reduces the price at which the company sells its products to consumers. In the end, the company can produce high-quality products, offer them at low prices and remain competitive in the market. Apple has also fallen victim to such profit-making actions.
As such, it has been involved in two such scandals. These include the Foxconn Affair and the Pegatron Crisis. Foxconn, a Taiwanese based company, was Apple’s largest and oldest partners. This is true as 40 per cent of the company’s revenue in 2014 was as a result of business with Apple. The company was by no means small as in 2013 it made $131.8 billion in sales. This made it Taiwan’s largest privately owned company with its operations stretching all over the world. It is important to note that the company never produced its original branded goods hence was not very well known. All this changed when there was a reported suicide by an employee at the factory. This was after the employee had lost a prototype of one of Apple’s phones (iPhone 4).
What caused public outrage were the allegations that the employee’s treatment before committing suicide was inhumane and close to torture. This incident was forgotten rather quickly. However, one year later, the same factory reported 18 attempted suicides by the workers (Chan, 2013). Tragically, there were 14 deaths at the factory’s site. The main reason that was highlighted as the cause of these suicide cases was the poor working conditions within the Foxconn factories. From then on, Foxconn and Apple came under fire to improve the working conditions in these factories. It is important to note that poor working conditions were not the only ethical or legal issues that Foxconn and Apple were accused of breaching.
According to Hoangova (2018), the workers at Foxconn were being forced to work overtime whilst being paid low wages. The employees works almost 15 hours per day and were being paid $50 per month (Klowden, 2006). This was the most cited complaint by the Foxconn employees. Apart from that, workers compared the working conditions to that of the military. This is because they had to stand for long hours. Failure to which they would be punished or even forced to stand for more time. Their upper management is also reported to abuse their power through discriminations in recruitment or humiliating employees when they report to work late (Ngai & Chai, 2012).
Foxconn employees were also accommodated in dormitories. These dormitories were originally built to accommodate about 100 employees. However, the Taiwanese company decided to accommodate 200,000 employees. Many workers admit that the living conditions in the dormitories are fit only for livestock. Apart from this, the working conditions in these factories are inhumane. According to Hoangova (2018), the unsafe working conditions are very likely to cause health defects to employees in these sites. In 2013, for example, China Labour Watch’s investigations concluded that these factories violated health and safety, human rights, and the environment. These factories have poor ventilation systems, which result in the inhalation of harmful substances by the workers. This caused many of them to be diagnosed with occupational leukaemia. This cancer is prevalent among workers who are exposed to toxic chemicals especially in the electronic industry. It is important to bear in mind that employees are not even provided for with protective gear as they work.
Despite the ethical and legal issues that the companies have violated, Apple has taken steps to try to correct their image. The pressure from NGO’s as well as their customers forced them to take action to save the company’s reputation. As such, they made changes to show their customers and critics that they care about the things happening in their supply chain as well as the people who are involved in the production of Apple products (Hoangova, 2018). First, Apple turned its attention to the conduct of its supplier since its suppliers were the source of all their reputation related problems. The company launched the Supplier Responsibility Program. This program was aimed at improving the company’s resolve to correct the social, ethical, and environmental problems caused by its suppliers. It helped increase transparency among the stakeholders who were involved in the manufacturing process of Apple products.
Organizations were required to sign a Code of Conduct to enter into business with Apple. The code had a long list of requirements that potential Apple partners had to comply with. Failure to follow the Code of Conduct would endanger the partnerships and in extreme cases, the partnerships would be terminated. According to Hoangova (2018), Apple, upon discovery of a partner’s violation of the Code of Conduct, would be given a period to rectify the problem. Failure to follow this directive would result in a termination of the partnership. The Code of Conduct highlights 5 major areas of concern. These include Health and Safety, Ethics, Labour & Human Rights, Environment & Management Systems.
Apple’s suppliers are expected to treat their employees with dignity and respect. The workplace should also be ethical. That is, the workers should be guaranteed that they would not be discriminated based on their race or sex. The Code of Conduct also highlights issues such as wages, discrimination and harassment, and working hours. It also goes ahead to talk about the prohibition to employ underage people. The working environment is also a case of focus in these guidelines. The working environment should be safe and should not expose workers to health or safety risks. As such, the working areas in these factories ought to be clean while ensuring proper ventilation. To conserve the environment as well, the Code of Conduct stipulated that the suppliers had to adopt business practices that were sustainable and worked towards conserving the environment. This includes ethically disposing of waste. Finally, the suppliers are expected to maintain high levels of business integrity by not being involved in any corrupt dealings.
These measures seem to have improved the organization’s image. This is because Greenpeace, an international environmental NGO, had previously ranked Apple in the bottom half of the scale. However, after the implementation of the Supplier Responsibility Program, the Greenpeace, in 2017 ranked Apple as being the second-best (Hoangova, 2018). In addition, the Supplier Responsibility Program forced the organization’s suppliers to change their conduct. According to (), Foxconn’s CEO promised to align their business operations with that of their partner. Some of the changes experienced at Foxconn included an introduction of counselling centres that would be open 24 hours and the availability of psychiatrists for the workers to share their problems with. In addition to preventing suicide cases, the organization would install safety nets around their facilities.
Foxconn was also committed to increasing the workers’ wages, reducing their overtime hours and building humane living premises for their employees. Finally, owing to the health hazards that employees were subjected to causing them to develop health-related complications, the company decided to stop using benzene and n-hexane in the assembly of its products. This is after these chemicals were observed to have caused occupational leukaemia to its workers. In line with this, employees were to be provided with adequate training on how to deal with hazardous chemicals. Workers are also equipped with safety gear to protect them from risks. The organization also called on fellow competitors to follow suit and stop the usage of these hazardous chemicals in their manufacturing process.
Question 2
Apple is solely responsible for the human rights violations that were taking place in Foxconn. However, Apple should not carry the blame all on its own. It is important to remember that Apple is not the only smartphone provider that is in partnership with Foxconn. Foxconn also supplies other electronic companies such as Sony and Samsung (Statt, 2016). Satisfying all these multinational companies puts a lot of pressure of Foxconn to deliver. As such, Foxconn is forced to employ many employees to do the work. Since the multinational corporations are looking for the cheapest deal, Foxconn has to try to remain competitive by offering it. The best way to do this is by exploiting employees. Apple should bear responsibility for several reasons. First, their products use harmful chemicals, which upon continued exposure over a long period cause health complications to the workers. In addition to these, Apple’s executives cannot feign ignorance. This is because before entering into business with Foxconn, they are informed by Foxconn how exactly they will remain competitive despite there being numerous manufactures in the country. However, the law cannot charge Apple with human rights violations since they do not operate the factories. That is solely on Foxconn. Apple can only be found in violation of human rights if it had direct control over the daily operations of the company. In this case, Apple is just a business partner with Foxconn.
Question 3
It is well within reason for Apple to apply different ethical and legal standards in different countries. This is because of the difference in culture as well as the law in different countries. The law in different countries may have the same aspects when relating to the general welfare of its workers such as protecting them from exploitation or discrimination. However, there are differences in the details of these laws. For example, a certain country may have different working hours set for its citizens that are different in other countries. In this case, Apple’s decision to overwork citizens in such countries would be justified as long as it is voluntary. In addition, there are countries where working in difficult situations is not frowned upon, as they believe in working hard despite the circumstances. In fact, reducing their work hours would lead to them complaining as it would also reduce their wages.
References
Chan, J. (2013). A suicide survivor: the life of a Chinese worker. New Technology, Work and Employment, 28(2), 84–99. https://doi.org/10.1111/ntwe.12007
Hoangova, T. (2018). Appalling Ethics of Apple Inc. and the Progress Achieved [Bsc.].
Klowden, T. (2006, June 13). iPod City: Apple criticized for factory conditions. Ars Technica. https://arstechnica.com/uncategorized/2006/06/7039-2/
Statt, N. (2016, May 25). Foxconn cuts 60,000 factory jobs and replaces them with robots. The Verge; The Verge. https://www.theverge.com/2016/5/25/11772222/foxconn-automation-robots-apple-samsung-smartphones
Ngai, P., & Chan, J. (2012). Global Capital, the State, and Chinese Workers. Modern China, 38(4), 383–410. https://doi.org/10.1177/0097700412447164