September 4, 2012

In our last issue of the Update, we reported on the controversy surrounding a recent investigation of three Apple Inc. supplier factories in China owned by Foxconn, the world's largest electronics manufacturer. The Fair Labor Association's (FLA's) investigation found evidence of widespread violations of local laws and the FLA's code of conduct, including overtime hours well above legal limits, failure to provide workers their full overtime premium pay, numerous health and safety violations, and union committees in which most of the representatives were management personnel.

The investigation itself was not without controversy. Labour rights advocates like the Hong-Kong-based Students and Scholars Against Corporate Misbehaviour (SACOM) felt it underestimated the seriousness of some persistent violations, missed others entirely, and failed to require adequate remediation.

MSN shared SACOM's criticisms of the weaknesses in the investigation and corrective action plan. We were also disappointed that in the first test of the FLA's new and strengthened Code of Conduct, which acknowledges that workers have a right to compensation that their meets basic needs and provides some discretionary income, no assessment was carried out of what would constitute a basic needs wage and no plan was developed to achieve this level of compensation over time.

As we go to press, that controversy is being re-ignited by a follow-up report released August 21 by the FLA. The FLA conducted verification audits at the same three Foxconn facilities to determine whether the company had carried out the agreed remediation plans. According to the report, Foxconn has completed 79% of remedial actions, many ahead of schedule, and the remaining items are in progress. For example, the FLA reports that Foxconn has reduced working hours to 60 per week, a significant reduction, but notes that the legal limit is 40 hours plus 9 overtime hours - meaning that Foxconn is still violating China's hours of work laws.

SACOM's initial response to the updated report is that the FLA has overstated the improvements at Foxconn, noting that the majority of improvements were changes in policy, and that it remains to be seen if these changes will result in real improvements for workers.

The Worker Rights Consortium (WRC) agrees. In a letter to the FLA, the WRC notes that promising not to short-change workers in the future doesn't compensate them for all the back pay owed after years of miscalculating the overtime hours worked. The FLA update says nothing about the issue, nor does it say anything about whether wages are meeting workers' basic needs.

SACOM and the WRC also question Foxconn's commitment to freedom of association - a difficult, but extremely important issue in China. The FLA update shows that the majority of "worker representatives" on union committees are still management personnel, rather than workers elected by their peers.

As the story unfolds, MSN will be working with SACOM and other labour rights groups to pressure and encourage Foxconn and Apple to ensure that policy changes translate into concrete action to improve workers' wages and working conditions and respect for their rights.

Lynda Yanz
for the MSN team