A report released Sunday by China Labor Watch, a nonprofit advocacy group, accused Apple and its manufacturing partner Foxconn of a litany of labor violations, from withholding bonus payments to rolling back safety training to employing more temporary workers than China’s laws allow.
The report was based on observations and documents gathered by undercover investigators working at China’s biggest iPhone factory in Zhengzhou. The group said one of the investigators was employed by Apple for four years.
Apple spokeswoman Lori Lodes denied most of the allegations, but acknowledged that Apple did exceed the number of contract workers allowed by Chinese law, which caps the ratio at 10%. Contract workers are paid attractive overtime wages, but don’t receive the benefits of full-time workers. “We have confirmed all workers are being compensated appropriately, including any overtime wages and bonuses, all overtime work was voluntary and there was no evidence of forced labor,” Lodes said.
Foxconn, Apple’s manufacturer, acknowledged a larger than allowed percentage of temporary workers in its factories but denied other allegations. “A recent review of our operations at our facility in Zhengzhou did identify some workforce compliance issues,” wrote Allanjit Singh, a spokesman for Foxconn, in an emailed statement. He denied other allegations like forced labor or withholding bonuses from workers. “Our work to address the issues identified in our Zhengzhou facility continues and we will closely monitor the situation,” he wrote.
The report accused Apple of exploiting Chinese workers in part to absorb costs associated with tariffs placed on its products. “Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese Workers,” the report reads.
The report alleged that Foxconn uses outsourcing firms, known as “dispatch companies,” to meet seasonal fluctuations in demand.
For instance, new iPhone models require huge surges in labor to meet demand.
Apple is expected to announce the newest version of its iPhone on Tuesday, as it does every fall. Though Apple has seen slowing demand for iPhones, it sells millions of its new handsets every quarter. According to Strategy Analytics, Apple sold 16.2 million units of its iPhone XR in the second quarter of 2019. That’s 12 million more than Samsung’s most popular phone model, the Galaxy S10 Plus.
Churning out that many units with consistency and profitability is perhaps Apple’s greatest trick. But China Labor Watch accused Apple of cutting corners to do it. “Multinational corporations helped drive economic development in China but they have also exploited loopholes in Chinese labor laws,” the report says.
The nonprofit said it has been investigating Apple’s manufacturing practices for a decade and has received worker complaints ranging from exposure to toxic chemicals to verbal abuse to forced labor.
The release of the report was first covered by Bloomberg.
Apple has been criticized for the working conditions in its factories in the past and has responded with an annual review of the treatment of workers in its factories, which it releases in a supplier responsibility report.
The report placed some of the blame on the Chinese government for turning a blind eye to labor violations. It urged Apple CEO Tim Cook to put pressure on suppliers to adhere to Chinese labor laws, regardless of whether they’re enforced.