October 25, 2015

The Panoroma Investigation and Apple's Lame Response

(Originally posted on 2014-12-21)

The Panorama program is available here:

[BBC Panorama Apple's Broken Promises BBC Documentary 2014 Workers Life in china Making iphone 6

This is what we learned from the Panorama program:

  1. Apple’s supplier Foxconn had to put nets around the buildings to stop the workers from committing suicide.
  2. The workers at the Pegatron plant are working insane hours 12, 14, 16 hour days are not uncommon.
  3. The workers are sleeping on the job. They are exhausted.
  4. The paper trail doesn’t mean anything. The reality and the paper trail are not the same. So when you audit the books, you are auditing a mirage which has nothing to do with reality.
  5. The sleeping quarters are not compliant with the company regulations.
  6. When Apple buys tin from Indonesian smelters, you have no idea of the origin of the tin. They might be coming from illegal mining operations which hire child labor.

I thought these were the salient portions of the program.

This is the letter from Apple senior vice president of operations Jeff Williams to the UK employees of Apple, it was posted at Read: Apple's letter to UK staff over Chinese factory conditions - Telegraph:

UK Team, As you know, Apple is dedicated to the advancement of human rights and equality around the world. We are honest about the challenges we face and we work hard to make sure that people who make our products are treated with the dignity and respect they deserve. Last night, the BBC’s Panorama program called those values into question. Like many of you, Tim and I were deeply offended by the suggestion that Apple would break a promise to the workers in our supply chain or mislead our customers in any way. I’d like to give you facts and perspective, all of which we shared with the BBC in advance, but were clearly missing from their program. Panorama showed some of the shocking conditions around tin mining in Indonesia. Apple has publicly stated that tin from Indonesia ends up in our products, and some of that tin likely comes from illegal mines. Here are the facts: Tens of thousands of artisanal miners are selling tin through many middlemen to the smelters who supply to component suppliers who sell to the world. The government is not addressing the issue, and there is widespread corruption in the undeveloped supply chain. Our team visited the same parts of Indonesia visited by the BBC, and of course we are appalled by what’s going on there. Apple has two choices: We could make sure all of our suppliers buy tin from smelters outside of Indonesia, which would probably be the easiest thing for us to do and would certainly shield us from criticism. But it would be the lazy and cowardly path, because it would do nothing to improve the situation for Indonesian workers or the environment since Apple consumes a tiny fraction of the tin mined there. We chose the second path, which is to stay engaged and try to drive a collective solution. We spearheaded the creation of an Indonesian Tin Working Group with other technology companies. Apple is pushing to find and implement a system that holds smelters accountable so we can influence artisanal mining in Indonesia. It could be an approach such as “bagging and tagging” legally mined material, which has been successful over time in the Democratic Republic of the Congo. We are looking to drive similar results in Indonesia, which is the right thing to do. Panorama also made claims about our commitment to working conditions in our factories. We know of no other company doing as much as Apple does to ensure fair and safe working conditions, to discover and investigate problems, to fix and follow through when issues arise, and to provide transparency into the operations of our suppliers. I want you to know that more than 1400 of your Apple coworkers are stationed in China to manage our manufacturing operations. They are in the factories constantly — talented engineers and managers who are also compassionate people, trained to speak up when they see safety risks or mistreatment. We also have a team of experts dedicated solely to driving compliance with our Supplier Code of Conduct across our vast supply chain. In 2014 alone, our Supplier Responsibility team completed 630 comprehensive, in-person audits deep into our supply chain. These audits include face-to-face interviews with workers, away from their managers, in their native language. Sometimes critics point to the discovery of problems as evidence that the process isn’t working. The reality is that we find violations in every audit we have ever performed, no matter how sophisticated the company we're auditing. We find problems, we drive improvement, and then we raise the bar. Panorama’s report implied that Apple isn’t improving working conditions. Let me tell you, nothing could be further from the truth. Here are just a few examples: Several years ago, the vast majority of workers in our supply chain worked in excess of 60 hours, and 70+ hour workweeks were typical. After years of slow progress and industry excuses, Apple decided to attack the problem by tracking the weekly hours of over one million workers, driving corrective actions with our suppliers and publishing the results on our website monthly — something no other company had ever done. It takes substantial effort, and we have to weed out false reporting, but it's working. This year, our suppliers have achieved an average of 93% compliance with our 60-hour limit. We can still do better. And we will. Our auditors were the first to identify and crack down on a ring of unscrupulous labor brokers who were holding workers’ passports and forcing them to pay exorbitant fees. To date, we have helped workers recoup $20 million in excessive payments like these. We’ve gone far beyond auditing and corrective actions by creating educational programs for workers in the same facilities where they make our products. More than 750,000 people have taken advantage of these college-level courses and enrichment programs, and the feedback we get from students is inspiring. I will not dive into every issue raised by Panorama in this note, but you can rest assured that we take all allegations seriously, and we investigate every claim. We know there are a lot of issues out there, and our work is never done. We will not rest until every person in our supply chain is treated with the respect and dignity they deserve. If you’d like to learn more about our Supplier Responsibility program, I encourage you and our customers to visit our website at apple.com/supplierresponsibility. Thanks for your time and your support. Jeff

This letter made me gag. What a bunch of poppycock.

Firstly, what the hell is Williams and Cook offended about? Does Apple have material objections to the findings of the program? They explicitly admit the situation in Indonesia. They do not challenge the assertions about the working conditions or hours in the factories in China. Apple points to their audit of the documentation and the program explicitly shows the documentation to be meaningless and not representative of what exactly is happening. What are they offended about? And more importantly, who gives a shit about whether they are offended or not? Apple increasingly talks about the values that guide their organization and everything Apple does and stands for. Set a bar. You have to meet it. When someone points out that you are falling short, you are offended? Give me a break. Get off that self-pity horse and fix the problems. Don’t whine. Fix the problems.

Apple’s get out of jail free card is based on the notion that they are the only company who tries? Apple is one of the largest companies in the world. Its claim is that there are deep underlying values guiding every decision it makes. That is what gives them the ability to charge the premium prices they demand in the marketplace. Their products are not just electronic gizmos. They are electronic gizmos which were produced within a value system. Apple’s value system includes this one “…that people who make our products are treated with the dignity and respect they deserve.” Really? Remember that this one has taken a few hits in the last few years. Remember this executive team was also in charge when Steve Jobs made a deal with Google, Intel, Adobe and other silicon valley companies to stop poaching engineers from each other. That was a collusion amongst employers to keep employee wages down. That is the effect of discouraging poaching. Keep a lid on engineer wages. That was treating people with respect and dignity? That is Apple’s history. So now when they tell me that they are offended by the suggestion that workers at one of their suppliers are being made to work overtime without their consent, I have to ask them, how gullible do you think I am?

You are telling me that you try. I accept that. You are trying. The situation is still not perfect, so try harder. This is important.

Your products are imbued with a value system. That is what makes your brand special. It is not Dell, or HP, or Samsung, or Walmart. All of the earnest pronouncements you make about your value system guiding your decisions is the added aura around your products. That is the added advantage you have in the marketplace. That is the source of your margins, that is the source of your brand loyalty, that is the source of your consumers’ obsession with your products. Don’t screw that up. If you screw that up, you will have the moral standing of Walmart or a Shell.

macosxguru at the gmail thingie

BBC Apple Values

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