Foxconn: Why are we only picking on Apple?
Hurrah! Apple has announced that it will be forcing the infamous Foxconn to work with independent auditors from the Fair Labor Association (FLA) to improve conditions in its Chinese mega-factories. But there are two reasons why it’s a little too soon to celebrate. The first one is obvious: the audits have barely begun, so there aren’t yet any actual improvements to celebrate. The second is that poor labor conditions are an industry-wide problem in the electronics sector. So why are we only picking on Apple?
Foxconn manufactures and assembles components and finished products for the consumer electronics industry. On its website, you can find a grainy map that charts how a cluster of Foxconn sites in China feeds parts and products to others downstream in South-East Asia, North and Central America and Europe. This is its famous “vertical(ly) integrated one-stop shopping business model” which enables it to offer manufacturing, moulding, tooling and assembly services, among others, to its customers. Also on its website, you can find a chart showing its meteoric growth from a mere $0.5 billion company in 1997, to a $61.8 billion company in 2008 (the most recent figures given).
Foxconn has been in and out of the news for quite a few years now due to the inhumane labor conditions reported to be routine practice at many of its factories. The allegations range from enforced overtime, to withholding of salaries, unsafe procedures for handling dangerous chemicals and military-style discipline.
Who’s the bad apple? Supplier or brand?
And it’s not just Foxconn’s “Apple” factories that are home to poor labor conditions. For example, Foxconn’s Nokia plant in India has also been named and shamed. So we can probably assume that most of Foxconn’s customers are profiting from dodgy labor practices.On the other hand, Foxconn is, of course, only one of many suppliers to the electronics sector. On January 16 2012, Apple posted a suppliers list for the first time ever. It apparently covers 97% of Apple’s supply chain – and consists of 156 separate suppliers. So a more important question is: is Foxconn the only one of Apple’s suppliers to disregard its workers’ rights?
In a report published last year, US-based human-rights organization China Labor Watch investigated 10 factories in China (including two belonging to Foxconn) where products for Apple, Dell, IBM, Ericsson, Philips, Microsoft, HP, Nokia, and others are manufactured. It found “significant systemic issues regarding recruitment, wages and benefits, working hours, work intensity, safety and sanitation, leave benefits, food and dormitory conditions, reward and punishment systems, and grievance mechanisms in China‘s electronic manufacturing industry.” That is a damning list of complaints.
Further, China Labor Watch argues that “as these ten factories are suppliers of the electronics industry‘s brand leaders, it is clear that their problems further reflect widespread, systemic issues in the electronics industry as a whole.” In other words, it would be dangerous, and misleading, to single out Foxconn.
But why single out Apple?
When Nike first faced allegations of poor labor conditions in its factories, Nike Director Todd McKean stated that the company’s initial attitude was “Hey, we don’t own the factories. We don’t control what goes on there.’… [But] we had people there every day looking at quality. Clearly, we had leverage and responsibility with certain parts of the business, so why not others?”
And when it comes to leverage, few companies have more than Apple. After announcing its Full Year results for 2011, Apple overtook Exxon Mobile Corp to temporarily become the world’s most valuable company (in terms of share value). Its cash pile stands at a whopping $100 billion. And it sold more than 37 million iPhones in the last quarter of last year. This makes it one of the most significant players in an industry where size brings huge power when it comes to manufacturing standards and processes.
So Apple has the leverage – and it has the resources – to drive change. It’s hard to see who else in the industry is in a better position to spearhead the revolution. And it’s hard to argue against the suggestion that this means they also have the greatest responsibility.