The Bigger Picture Behind Apple's China Problem

Last summer, Nike admitted that "nearly two-thirds of the 168 factories making Converse products fail to meet Nike's standards for contract manufacturers," according to this story by Good Guide's Dara O'Rourke, who as a graduate student working in Vietnam in 1997 turned a spotlight on Nike's use of child labor. In its most recent corporate-responsibility report, Gap says that between 10 and 25 percent of its suppliers in south China don't comply with child labor laws, don't pay overtime as required and don't provide one day off each week.

I turned to Gap's report not because they are a laggard but because, to their credit, they are a leader when it comes to being open about where their factory monitoring efforts are falling short. Other companies don't say nearly as much about where their stuff is made, or how. The factories themselves are often walled off from NGOs and journalists.

The result is that, for better or worse, most of our stuff is made in faraway places by people who are invisible to us. Can you find Shenzhen, a city of 14 million people (bigger than New York!) and the world's manufacturing hub, on a map?

As best as I can tell, Apple is no worse than most other companies when it comes to protecting the rights of workers in its factories. It may be better. In its sixth annual Supplier Responsibility Report released last month, Apple disclosed the names of its suppliers for the first time -- but not the location of their factories.

The company also became the first electronics firm to join the Fair Labor Association, a nonprofit group that works to improve conditions for workers. (Its other clients include Nike.) In an email to employees, Apple's CEO Tim Cook wrote: "The FLA's auditing team will have direct access to our supply chain and they will report their findings independently on their website." They don't, however, tie violations to particular factories.

In its report, Apple also said that it

dedicated additional resources to protecting the rights of workers who move from their home country to work in factories in another country. Many of these immigrants are charged exorbitant fees that drive them into debt, an industrywide problem that Apple discovered in 2008 and that we classify as involuntary labor. In 2010, we continued our search for these violations, auditing all of our production suppliers in Taiwan and many in Malaysia and Singapore. As a result of Apple's audits and rigorous standards, foreign workers have been reimbursed $3.4 million in recruitment fee overcharges since 2008.

This is significant because it's a rare example of a U.S. brand putting money in the pockets of overseas workers. "On the migrant labor issue, Apple is absolutely a leader," says Dan Viederman of Verite. [Disclosure: Verite has worked with Apple and my wife, Karen Schneider, is a board member of Verite.]

Others see Apple differently. A consultant for BSR (also know as Business for Social Responsibility) who declined to be identified told The Times that Apple refused to push Foxconn to try out a program where workers could have access to private "hotlines" to report abusive conditions.