Apple has revealed in a new report that some of its suppliers broke local laws, employing children at three different facilities, without naming the companies or locations. Inspectors checked out facilities in China, Czech Republic, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and US as part of the "Supplier Responsibility" report published on the Apple website. Apple revealed the news under the "2010 Supplier Responsibility Progress Report" (PDF), as part of the webpage.
Under the heading "Underage labour" Apple reports the following:
"Apple discovered three facilities that had previously hired 15-year-old workers in countries where the minimum age for employment is 16. Across the three facilities, our auditors found records of 11 workers who had been hired prior to reaching the legal age, although the workers were no longer underage or no longer in active employment at the time of our audit."
The facilities in question are responsible for manufacturing Apple's flagship products including iPhones, iPods, and various computers.
"In each of the three facilities, we required a review of all employment records for the year prior to our audit, as well as a complete analysis of the hiring process to clarify how underage people had been able to gain employment. Apple required each facility to develop and institute appropriate management systems - such as more thorough ID checks and verification procedures - to prevent future employment of underage workers," the company adds.
Further down the report under "Falsification of records" Apple adds the following.
"Three core violations involved suppliers who deliberately provided falsified records during our audit. One facility attempted to conceal evidence of historical cases of underage labour. Two other facilities presented falsified records that concealed evidence of violations of Apple's Code regarding working hours and days of rest. In all three cases, Apple auditors uncovered the falsified records by cross-referencing audit data."
The report also highlights suppliers abusing limits set on working hours. Apple's own code sets a maximum of 60 work hours per week with at least one day of rest per seven days of work. Apple notes this code can be broken under "unusual or emergency circumstances," but discovered the limit was regularly abused by suppliers.
"At 60 facilities, we found records that indicated workers had exceeded weekly work-hour limits more than 50 per cent of the time," Apple notes.
"Similarly, at 65 facilities, more than half of the records we reviewed indicated that workers had worked more than six consecutive days at least once per month. To address these issues, we required each facility to develop management systems - or improve existing systems - to drive compliance with Apple's limits on work hours and required days of rest."
Under 'Wages and benefits' Apple discovered more abuses.
"At 48 of the facilities audited, we found that overtime wages had been calculated improperly, resulting in underpayment of overtime wages. At 24 facilities, our auditors found that workers had been paid less than minimum wage for regular working hours."
"In most of these cases, the facility's pay structure for regular hours depended on attendance-related bonuses to meet minimum wage requirements; without these bonuses, there was no guarantee that the minimum wage would be met. We also found 15 facilities where the facility's pay structure was unnecessarily complex and could result in underpayment of wages."
In response, Apple required facilities to calculate underpayments, repay underpaid wages, and implement management systems to ensure accurate payments in the future. Apple also found 57 facilities with deficient payments in worker benefits, such as sick leave, maternity leave, or social insurance for retirement, which Apple asked suppliers to rectify.
Apple also discovered deductions made for disciplinary purposes in 45 facilities open to abuse and asked for them to be stopped.
The 24-page Apple report also covers a range of topics including training, education, hazardous waste, anti-discrimination, occupational injury prevention, ergonomics, environmental permits and reporting, management commitment and holding suppliers accountable.
Summing up, Apple promises to continue to monitor and work with suppliers to meet Apple's code requirements, offering an email address - email@example.com - for those who wish to report a possible violation in the company's supply base.