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New China Labor Headaches for Apple, Now at Pegatron
New China Labor Headaches for Apple, Now at Pegatron

By Seth Fitzgerald
July 29, 2013 10:31AM

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Fifteen audits have been conducted by Apple since 2007 at Pegatron facilities covering 130,000 workers. Whether or not these audits do anything is up for debate, since it was discovered consulting firms specifically help Chinese factories pass audits by generating both real and false records. China Labor Watch says Pegatron workers are underpaid and overworked.

Apple is under fire once again from the non-profit organization China Labor Watch. The group has come out to claim that at some of the largest factories operated by Pegatron, one of Apple's suppliers, the workers are underpaid and forced to work far too many overtime hours.

Pegatron also faces the same type of criticism that another supplier, Foxconn, has faced for the past couple of years, with reports of horrible working conditions and environmental dangers, but the withholding of pay is the primary concern this time.

Since the major stories regarding Foxconn came out in 2011 and 2012, Apple has continued releasing Supplier Responsibility Reports to keep a close eye on its supply chain.

Are Reports Trustworthy?

Unlike some of the claims and reports that come solely from organizations within China, China Labor Watch is based in New York, which adds some credibility to its claims.

By no means are these reports coming out for the first time either. China Labor Watch released a report in 2012 stating that workers at Foxconn were working close to six times the maximum amount of overtime hours. While Foxconn might not be the same as Pegatron, its records have been equally spotty.

As the claims piled up against Foxconn, Apple decided that it would try and move away from using Foxconn factories, eventually resulting in Pegatron becoming one of the main iPad, iPhone, and Mac manufacturers. Foxconn has maintained its position as Apple's largest manufacturer, but Pegatron has been growing and now has 70,000 workers.

China Labor Watch has supposedly been working undercover in three Pegatron factories since March to conduct 200 interviews with workers. The interviews have been the basis for its recent report stating that Apple has yet to fix worker conditions along its supply chain.

Apple's Response

Within a few hours of China Labor Watch's most recent report coming to light, Apple released its own statement regarding the issue.

"Their latest report contains claims that are new to us and we will investigate them immediately," Apple said.

Apple has conducted 15 audits since 2007 at Pegatron facilities covering 130,000 workers. Whether or not these audits do anything is up for debate, since it was discovered there are consulting firms specifically helping Chinese factories pass audits by generating both real and fake records.

Apple says that it has worked closely with China Labor Watch in the recent past to make sure there are no issues along its supply chain, and some of the organization's claims have been proven as a result of Apple's cooperation.

Apple said in its statement Monday that it would audit the Pegatron factories in an attempt to fix any wage or working-condition issues.

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

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