Apple shows solid progress in latest supplier responsibility report

The tech giant's latest supplier responsibility report reveals better working conditions, a drastic drop in child labour, and a massive reduction in carbon emissions since it began probing its supply chain in 2008.

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Image: Apple

Apple has released its Supplier Responsibility 2016 Progress Report, which details its investigation into cases of underage workers or involuntary labour, document falsification, intimidation of or retaliation against workers participating in audits, working conditions that put lives at risk, and significant environmental impacts.

Every year, the tech giant issues a progress report [PDF] with the results of the previous year's audits and corrective actions. Apple said that while evaluating its facilities, it also seeks out core violations -- issues the iPhone maker said it has zero tolerance for.

"There's a right way to make products. It starts with the rights of the people who make them," the conglomerate says in its tagline for its tenth and latest report.

According to Jeff Williams, Apple's senior vice president of Operations, in 2015, Apple performed 640 audits that covered over 1.6 million workers and audited its own suppliers across 20 countries.

"At Apple, we are deeply committed to making sure everyone in our supply chain is treated with the dignity and respect they deserve," Williams said.

According to Apple, any breach found is escalated to senior management at Apple and the supplier is immediately addressed. Violations are often also reported to local authorities, the report says, with non-compliant suppliers placed on probation until they successfully complete their next audit.

"Core violations negatively affect the suppliers' business relationships with Apple and can lead to termination," Apple said. "To date, we've ended contracts with 20 suppliers."

Apple's 2010 report revealed that some of its suppliers were breaching the company's "Supplier Code of Conduct" by using child labour and carrying out other dubious practices. In 2011, Apple found 91 underage workers in 10 of its facilities. In 2015, Apple revealed three cases of underage labour, all at one facility, saying it would continue to look for child labour within its supply chain.

The number of audited facilities with underage labour dropped to one in 2015 from six in 2014, despite nearly 20 percent of facilities audited being new to the process.

Apple said the three underage workers were 15 years of age, with local law stipulating an individual must be 16 years old to hold employment.

"If we find underage workers in our suppliers' factories, we make the suppliers return the children to their homes, pay for their education at a school of their family's choice, and continue to provide income for basic needs until they reach the legal working age," the report says.

"We also enlist a third-party organisation to monitor the children's progress and report back to us. After they complete their education, suppliers must offer them reemployment."

In 2015, work-hour compliance among Apple's suppliers reached 97 percent, a number Williams said was "virtually unheard of in our industry".

Additionally, he said that since 2008, more than 9.2 million workers have been trained on their rights, over 1.4 million people have participated in Apple educational programs, and more than $25.6 million in excessive recruitment fees have been repaid to foreign contract workers by suppliers as a result of their efforts.

In 2015, Apple suppliers paid out $4.7 million to reimburse workers that were contracted through unfair and excessive recruitment fees.

Apple said that since 2008, over 2.3 million workers were trained on its Code and their rights, and that it invested millions of dollars to expand its Supplier Employee Education and Development (SEED) program since.

SEED now has in excess of 48 classrooms in 23 facilities which are all equipped with the likes of iMac computers, iPads, education software, and video conferencing systems. In 2015, many SEED participants earned bachelor or associate degrees in partnership with local universities, the report says.

The report also states that its suppliers have diverted more than 73,000 metric tons of waste from landfills; its Clean Water Program has saved more than 3.8 billion gallons of freshwater; and in the first year of its energy efficiency program, Apple said suppliers prevented more than 13,800 metric tonnes of carbon emissions.

The tech giant said it is committed to responsible sourcing, and is working to ensure that minerals used in its products such as tin, tantalum, tungsten, and gold, do not finance armed conflict.

In December 2015, after five years of effort, Apple said 100 percent of the identified smelters and refiners in its supply chain for current products were participating in an independent third-party conflict minerals audit program.

"While this is an important milestone, and may be viewed by some companies as grounds to declare their products 'conflict free', we believe participation in third-party audit programs alone is not enough," the report said. "Ongoing engagement is critical, because some smelters that have completed third-party audits have minerals that are supplied by mines allegedly involved with armed groups."

In February, Baptist World Aid released a report that evaluated 56 technology companies on how ethically and sustainably their products are made, with a focus on human rights and protecting workers from exploitation.

Its 2016 Electronics Industry Trends report probed the electronics companies, using an A to F grading system measured through key electronics supply chain production phases: The extraction of minerals at the raw materials level, smelting and refining and/or component manufacturing at the inputs level, and the final manufacture of the product.

Hisense, Palsonic, and Polaroid all failed to make the grade, and whilst no company received an A, Acer, Apple, BSH Group, Intel, LG Electronics, Microsoft, Motorola Mobility, and Samsung received a B+ grade; Garmin, HP, Motorola, Philips, and Toshiba came back with a B; and with a B- were BlackBerry, Dell, Dick Smith Electronics, Electrolux, Panasonic, and Ricoh.

Falling just short of a fail with a D- were Capital Brands, GoPro, Haier, JVC Kenwood, Kogan, Leica camera AG, Soniq, Sunbeam, TEAC, and Vorwerk; Dyson received a D; and a D+ went to Amazon, Arcelik AS, Canon, Fujitsu, HTC, Huawei, Lenovo, Oracle, and Whirlpool.

Breville, Ericsson, Olympus, and Tom Tom received a C+; Asus, DeLonghi, Hitachi, Nikon, and Sony a C; and Google, Kodak, Nintendo, and Sharp received a C-.

"Even at the B+ range, none of the companies had knowledge of where all their raw materials were coming from -- they're a long way off understanding that level of their supply chain, which are where the greatest risks are," said Gershon Nimbalker, advocacy manager at Baptist World Aid.

"Child miners are a huge problem in the electronics supply chain, particularly in countries like the Democratic Republic of Congo or the Philippines."

Human rights activism organisation Amnesty International also released a report that showed the problem of child mining in cobalt mines, which often finds its way into the batteries of electronics.

"The glamorous shop displays and marketing of state of the art technologies are a stark contrast to the children carrying bags of rocks, and miners in narrow manmade tunnels risking permanent lung damage," Mark Dummett, business and human rights researcher at Amnesty International, said.

"Millions of people enjoy the benefits of new technologies but rarely ask how they are made. It is high time the big brands took some responsibility for the mining of the raw materials that make their lucrative products."

Major electronics firms including Apple, HP, Samsung, Microsoft, and Lenovo are failing to check that cobalt mined by child labourers has not been used in their products, Amnesty said.

All of the named companies in Amnesty's report say they have "zero tolerance policies" on child labour but Dummett said the promise from those companies is "not worth the paper it is written [on] when the companies are not investigating their suppliers".