Apple Partner Foxconn Has ‘Tons of Issues,’ Labor Group Says

Peter BurrowsFeb 17, 2012
http://www.bloomberg.com/news/2012-02-17/foxconn-auditor-finds-tons-of-issues-.html

The Fair Labor Association, a watchdog monitoring working conditions at makers of Apple Inc. products, has uncovered “tons of issues” that need to be addressed at a Foxconn Technology Group plant in Shenzhen, China, FLA Chief Executive Officer Auret van Heerden said.

Van Heerden made the comments in a telephone interview after a multiday inspection of the factory. Apple, the first technology company to join the FLA, said on Feb. 13 that it asked the Washington-based nonprofit organization to inspect plants owned by three of its largest manufacturing partners.

“We’re finding tons of issues,” van Heerden said en route to a meeting where FLA inspectors were scheduled to present preliminary findings to Foxconn management. “I believe we’re going to see some very significant announcements in the near future.”

He declined to elaborate on the findings. The FLA plans to release more information about its inspection in the coming weeks. By then, the company will have had a chance to contest or agree to steps to prevent further violations.

“Foxconn is cooperating fully with this audit and we will review and act on all findings and recommendations,” Foxconn said in an e-mailed statement today. “This is a very professional and thorough review and any deficiencies the FLA might find in the implementation of customer or Foxconn policies will be addressed.”

Steve Dowling, a spokesman for Cupertino, California-based Apple, referred to the company’s Feb. 13 statement about the audits.

Hard-to-Find Violations

Van Heerden said in an interview with Reuters published Feb. 15 that Foxconn’s plants were “first class.” He said he was surprised “how tranquil it is compared with a garment factory.”

Heather White, the founder of Verite, another monitoring group, said that many alleged violations -- say, forced overtime or use of certain toxic chemicals -- can be hard to detect.

“Those are not things one would see on a hosted tour that was planned in advance,” she said.

Van Heerden said the comments reflected his previous interactions with Foxconn.

Apple had commissioned the FLA to carry out smaller projects in the past two years, in order to try out some of the inspection techniques used by the group to more effectively root out workplace problems.

Responses to Hazards

Van Heerden said he had been impressed with Apple and Foxconn’s responses to hazards related to the polishing of aluminum, which led to explosions at Foxconn and another Apple supplier, Pegatron Corp. (4938), that killed at least three workers and injured more than 70 people last year. Van Heerden said that Apple researched the problem and hired a respected consultant.

Apple shares were little changed at $502.12 yesterday. The stock has risen 24 percent this year, extending Apple’s lead as the world’s most valuable company.

In response to the consultant’s recommendations, Foxconn bought state-of-the-art extraction and ventilation equipment to prevent dust buildup, and developed an automated approach so that no humans are involved in the polishing work.

“I’ve seen the improvements that have been made, and they’re dramatic,” he said. “The room is full of robots. It’s totally automated. But people need to see the proof.”

Random Interviews

Van Heerden said that FLA’s 30-person inspection team will interview 35,000 Foxconn employees, via meetings with small groups of randomly picked workers, chosen to reflect the demographics of the campus in terms of age, gender and skill levels. As part of the process, workers log answers to questions on tablets connected to FLA servers so they can be tabulated.

White, who is now a fellow at Harvard University’s Edmond J. Safra Center for Ethics, says group meetings on Foxconn’s premises may not yield honest responses. She says she found it more productive to talk to workers in their homes or other off- site locations.

“It’s very hard to get people to speak openly about very serious issues,” she said.

To contact the reporter on this story: Peter Burrows in San Francisco at pburrows@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net