Apple Abandons iPhone Assembler In China After Labor Abuses Uncovered

Apple Abandons iPhone Assembler In China After Labor Abuses Uncovered

Apple Abandons iPhone Assembler In China After Labor Abuses Uncovered

Tyler Durden

Mon, 11/09/2020 – 09:00

Several weeks ago, Apple discovered that one of its “Taiwanese manufacturers misclassified student workers and allowed some to work nights and overtime in violation of Apple’s Supplier Code of Conduct,” reported Bloomberg

After discovering labor violations at a student workers’ program, Apple took swift action against the iPhone assembler, Pegatron Corp, by discontinuing any new business across its Chinese-based production chain until corrective action was completed. 

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Inside Pegatron factory in Shanghai, China. h/t  Bloomberg

The problem, Pegatron “misclassified” student workers and falsified their paperwork so they could work night shifts or extremely long hours. In many of the cases, the work performed by students were entirely unrelated to their majors. Apple said Pegatron employees “went to extraordinary lengths” to cover up the labor violations. 

“Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major,” Apple said in a statement. “The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms.”

Pegatron is one of Apple’s top iPhone assemblers besides Foxconn. The labor violations come as Apple ramped up production of the new iPhone 5G amid delays and supply chain disruptions following the virus pandemic earlier in the year. 

The news sent Pegatron’s shares lower Monday, closing down 2% in Taiwan’s cash session. 

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“Pegatron’s current iPhone business should not be affected. However, Pegatron will likely lose some orders for the Apple’s new handsets next year to Luxshare, which is poised to become a new iPhone assembler in 2021,” GF Securities analyst Jeff Pu told Bloomberg.

Bloomberg quoted a Pegatron spokeswoman saying the company is “working on the corrective actions and confident that we will complete it soon.” 

“Upon discovery of this non-compliant activity, we immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care,” Pegatron said in a statement.

Apple said there was no evidence of forced labor or underage labor in Pegatron’s situation. Bloomberg noted that labor violations were observed at Pegatron’s Shanghai and Kunshan plants in eastern China.

Just days ago, the Bill and Melinda Gates Foundation sponsored an article in The Guardian suggesting ‘child labor is good.’ 

Apple Abandons iPhone Assembler In China After Labor Abuses Uncovered