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OM in the News: Apple and its Supplier Problems (Again)

December 24, 2014
Rainto, 12, said he was worried about landslides in the mine he works in Indonesia

Rainto, 12, said he was worried about landslides in the mine he works in Indonesia

BBC’s secret filming of a Chinese iPhone production line showed Apple’s longstanding promises to protect workers were routinely broken (BBC News, Dec. 18, 2014). It found standards on workers’ hours, ID cards, dormitories, work meetings and juvenile workers were being breached at the factories. Exhausted workers were filmed falling asleep on their 12-hour shifts at the Pegatron supplier. One undercover reporter had to work 18 days in a row despite repeated requests for a day off.

Apple responded, saying: “We are aware of no other company doing as much as Apple to ensure fair and safe working conditions. We work with suppliers to address shortfalls, and we see continuous and significant improvement, but we know our work is never done.”

The poor conditions in Chinese factories were highlighted in 2010 when 14 workers killed themselves at Apple’s biggest supplier, Foxconn. Following the suicides, Apple published a set of standards spelling out how factory workers should be treated. It also moved some of its production work to Pegatron’s factories on the outskirts of Shanghai. But BBC’s undercover reporters found that these standards were routinely breached on the factory floor. Overtime is supposed to be voluntary, but none of the reporters were offered any choice. One reporter was housed in a dormitory where 12 workers shared a cramped room.

BBC also travelled further down Apple’s supply chain to Indonesia. Apple says it is dedicated to the ethical sourcing of minerals, but BBC found evidence that tin from illegal mines could be entering its supply chain. It found children digging tin ore out by hand in extremely dangerous conditions. Apple says its Indonesia situation is complex, with tens of thousands of miners selling tin through many middle men. It wrote: “The simplest course of action would be for Apple to unilaterally refuse any tin from Indonesian mines. But that would also be the lazy and cowardly path, since it would do nothing to improve the situation. We have chosen to stay engaged and attempt to drive changes on the ground.”

Classroom discussion questions:

1. Evaluate Apple’s choices.

2. Why is supply chain integrity so important–and so difficult?


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