Chinese labor group alleges worker abuse by Apple supplier Pegatron

Chinese labor group alleges worker abuse by Apple supplier Pegatron

Summary: Apple's partner Foxconn was first in the firing line over worker conditions -- and now Pegatron is facing the same accusations.

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TOPICS: Apple
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Foxconn partner workers. Credit: Apple
Chinese Foxconn workers. Credit: Apple

Apple contractor Pegatron is the latest component supplier which is being accused of failing in labor standards for its Chinese workers.

According to the Wall Street Journal, a report set to be released on Monday by nonprofit China Labor Watch claims that Pegatron is guilty of both environmental and safety violations.

In addition to workplace worries, the report alleges that Pegatron has withheld worker pay, I.D. cards needed to apply for jobs elsewhere, and living conditions are considered poor at the supplier's factories and subsidiaries.

As Apple diversifies its supply chain, Pegatron has been producing the iPad Mini and some variations of the iPhone, while larger competitor Foxconn -- also known as Hon Hai Precision Industry -- manufactures larger mobile devices for the company. While Pegatron is a smaller manufacturer, it is considered a long-term risk to Foxconn due to its lower profit margins -- less expensive for Apple, and potentially offering better long-term prospects and eventually larger contracts for the supplier. However, as both companies expand, the potential for worker abuse increases. 

If the allegations prove to be true, this violates not only Chinese law, but Apple policies. In light of Foxconn worker conditions, Apple conducts and releases Supplier Responsibility reports designed to shed light on and improve conditions for employees that assemble the company's range of gadgets.

The iPad and iPhone maker has also established a supplier code of conduct designed to protect workers.

"Apple considers the most serious breaches of compliance to be core violations. These include physical abuse; underage, debt-bonded or forced labour; falsification of information or obstruction of audit; coaching workers for audits or retaliating against them if they provide information; bribery; significant pollution and environmental impacts; and issues posing immediate threat to workers’ lives or safety," Apple says.

"All core violations must be stopped and corrected immediately. Our preference is to fix problems so they don’t happen again rather than just fire the supplier."

In response to the fresh claims against Pegatron, Apple has issued a new statement as posted by the Wall Street Journal. The Cupertino, Calif.-based company reiterates that "Apple is committed to providing safe and fair working conditions throughout our supply chain," and says that 15 comprehensive audits have taken place at Pegatron facilities since 2007, covering over 130,000 workers.

The company says that Pegatron employees work for an average of 46 hours per week.

Apple says that the company has been in close contact with the China Labor Watch for several months. As a result, one claim has proven true -- that the supplier has withheld worker I.D. cards. The iPad and iPhone maker stated that this was a "small number," and the cards were kept as Pegatron "helped set up bank accounts for those employees." However, once the tech giant discovered the system, Apple demanded that this practice was stopped, and within a week a new procedure was established.

In response to the other claims of labor and rights violations, Apple says:

"Their latest report contains claims that are new to us and we will investigate them immediately. Our audit teams will return to Pegatron, RiTeng and AVY for special inspections this week. If our audits find that workers have been underpaid or denied compensation for any time they’ve worked, we will require that Pegatron reimburse them in full."

Pegatron CEO Jason Cheng told the Journal that the allegations would be investigated in full and immediate action will be taken to correct violations if required.

Topic: Apple

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10 comments
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  • iPhone mini also confirmed in the report

    It is dreadful when you consider the seeming cost of cheap consumer goods is ruthless worker exploitation, but this seems to be the case. In addition to which the China Labor Report also confirms a plastic iPhone, according to this http://blogs.computerworld.com/smartphones/22562/apples-plastic-iphone-mini-confirmed-shocking-pegatron-labor-report
    jonnyfuturity
    • Same as dealing with Vile Cretin in their US offices

      In this case the consumer "goods" are overpriced garbage being peddled by a company that doesn't have engineers, (at over 5x the price of a superior android device). In other words, naked greed is behind all this. I find it hilarious that in the many years this has been going on, these "news" articles put out by the anglo ashkenazi controlled media use words like "apple's supplier" and "apple is investigating" rather than point out what a vicious bunch of anglo ashkenazis run apple at all levels.
      And talk about STUPID! Instructing your apple store employees to sneak up behind people to determine if they are speaking Persian so that they can make a political statement by denying sales to Iranian-Americans? I mean seriously, isn't lying to us through all other media channels enough for these vile cretin? Hahhahahahhahaha.
      ken_diamond
  • Apple sounds like they are in charge

    But are they really? They can't just fire their suppliers since there aren't any other ones to replace them for the production they need. So they can talk this talk all they want but what are the real threats to these companies?
    JoeNM84
  • At least there will never be an article on

    Nokia having these issues in China, as all their phones are built in India, they're only designed in China.
    Troll Hunter J
  • Out of curiosity..

    Is this just an Apple supplier or do they also produce products for other PC companies as well. The article doesn't say but the only reason I ask is that when the Foxxcon story broke, they also only reported it as an Apple supplier when in fact they created hundreds of components for Android, Microsoft, Samsung and dozens of other PC makers as well. Apple just being the one name in the bunch that would get the most press.
    Tigertank
    • Pegatron

      Makes motherboards for other companies, they make various sub-assembles for the OEMs. They are only singeling out Apple, to boost the sales of the competition, and ZDNet likes to play loose with the facts
      Troll Hunter J
  • Disturbing... but not surprised...

    With all due respect to the big company's as A@@le, W@lmart and other big brands... this kind of abuse towards workforce in places like China/India is well known, all they do with audits is pretend they are a company sociably reponsible and leave this problem to their contry laws.. in my journy's to china manufacturers i just can imagine how do they do to survive at low costs... of course also China goverment is also guilty cause they overlook this kind of abuse so the company can offer low cost and get incoming bussiness ... "THE HIGH PRICE OF LOW COST"...
    For all of you who want to have an idea how how frustrating this must for the guys working at this factory's, imagine this: Working in cities like Shanghai, Shenzhen and getting paid around 80 USD per week in a city where life cost is around same or more expensive than San Diego Ca. your only choice is to live in the company complex who somehow have to absorve costs with the help of local benefits that allow them to mantain low price lifestile... If anyone cares about this, fight for right price to pay and reshore this type of electrical products manufacturing..
    jh82
  • Disturbing... but not surprised...

    With all due respect to the big company's as A@@le, W@lmart and other big brands... this kind of abuse towards workforce in places like China/India is well known, all they do with audits is pretend they are a company sociably reponsible and leave this problem to their contry laws.. in my journy's to china manufacturers i just can imagine how do they do to survive at low costs... of course also China goverment is also guilty cause they overlook this kind of abuse so the company can offer low cost and get incoming bussiness ... "THE HIGH PRICE OF LOW COST"...
    For all of you who want to have an idea how how frustrating this must for the guys working at this factory's, imagine this: Working in cities like Shanghai, Shenzhen and getting paid around 80 USD per week in a city where life cost is around same or more expensive than San Diego Ca. your only choice is to live in the company complex who somehow have to absorve costs with the help of local benefits that allow them to mantain low price lifestile... If anyone cares about this, fight for right price to pay and reshore this type of electrical products manufacturing..
    jh82
  • Disturbing... but not surprised...

    With all due respect to the big company's as A@@le, W@lmart and other big brands... this kind of abuse towards workforce in places like China/India is well known, all they do with audits is pretend they are a company sociably reponsible and leave this problem to their contry laws.. in my journy's to china manufacturers i just can imagine how do they do to survive at low costs... of course also China goverment is also guilty cause they overlook this kind of abuse so the company can offer low cost and get incoming bussiness ... "THE HIGH PRICE OF LOW COST"...
    For all of you who want to have an idea how how frustrating this must for the guys working at this factory's, imagine this: Working in cities like Shanghai, Shenzhen and getting paid around 80 USD per week in a city where life cost is around same or more expensive than San Diego Ca. your only choice is to live in the company complex who somehow have to absorve costs with the help of local benefits that allow them to mantain low price lifestile... If anyone cares about this, fight for right price to pay and reshore this type of electrical products manufacturing..
    jh82
  • Disturbing... but not surprised...

    With all due respect to the big company's as A@@le, W@lmart and other big brands... this kind of abuse towards workforce in places like China/India is well known, all they do with audits is pretend they are a company sociably reponsible and leave this problem to their contry laws.. in my journy's to china manufacturers i just can imagine how do they do to survive at low costs... of course also China goverment is also guilty cause they overlook this kind of abuse so the company can offer low cost and get incoming bussiness ... "THE HIGH PRICE OF LOW COST"...
    For all of you who want to have an idea how how frustrating this must for the guys working at this factory's, imagine this: Working in cities like Shanghai, Shenzhen and getting paid around 80 USD per week in a city where life cost is around same or more expensive than San Diego Ca. your only choice is to live in the company complex who somehow have to absorve costs with the help of local benefits that allow them to mantain low price lifestile... If anyone cares about this, fight for right price to pay and reshore this type of electrical products manufacturing..
    jh82