Apple Shines the Light on Its Supply Chain, Warts and All

Apple Shines the Light on Its Supply Chain, Warts and All

Image CC licensed by Flickr user geerlingguy

Apple has come under fire in the past for a perceived lack of action on cleaning up its supply chain, particularly in China.

The company lifted the veil last week on its supply chain efforts and network with the release of its 2012 Supplier Progress Report (PDF) Friday, the same day Apple made public its leading supplier list and joined the Fair Labor Association (FLA).

In an announcement (PDF) Friday, the FLA said it would independently evaluate some of Apple's supplier facilities and share its findings on its website. Apple will coordinate its FLA obligations with its supplier compliance program within two years, as new FLA affiliates are required. Already the FLA worked with the company to assess the effectiveness of its training programs related to labor rights and standards.

Apple's progress report detailed both highs and lows of the company's supplier responsibility program. Among the highlights, including both environmental and labor findings:

• Apple conducted a total of 229 audits last year, 80 percent more than the previous year. That included 14 specialized environmental audits.

• On average, 79 percent of facilities were in overall compliance in six environmental impact areas. Of the core violations found, one included a facility that was found to be operating without an environmental impact assessment and inspection approval for 1.5 years; another facility was discharging wastewater on a surrounding farm; one facility had no environmental impact assessment, inspection approval, pollutant registration, or monitoring results for wastewater, air emissions or noise.

• The vast majority of Apple's audited suppliers met the company's ethics guidelines, although four facilities provided falsified documents of some sort, another obstructed Apple's audit team from accessing payroll records and another used intimidating language to coach its foreign contract workers.

• Just 38 percent of suppliers audited complied with Apple's working hours policies, which sets a maximum of 60 work hours per week and at least one day of rest per seven days. More than half of workers at 93 facilities exceeded the 60-hour rule during at least one week out of a dozen surveyed. The majority of records at 90 facilities showed employees worked more than six consecutive days at least once a month.

• Five facilities hired underaged workers. Fifteen facilities employed foreign contract workers who paid excessive recruitment fees, which creates a situation akin to indentured migrant labor. Apple made suppliers reimburse excessive fees that are higher than Apple's set limits.

Image CC licensed by Flickr user geerlingguy.