The truth behind Apple’s supplier report

Since Apple released their 2013 Supplier Responsibility Progress Report in January, everyone has had a bit of time to inspect it. As always, Apple reports progress and displays compliance figures of eighty or ninety percent for some hot issues, such as working hours and freedom of association.

Also, Faire Computer notes that one remarkable thing Apple has managed is the paying back of illegal fees that were raised by recruiting agencies to migrant workers.

However, the Good Electronics Network have published an analysis in response to the supplier report that shows how white-washed the high compliance figures published by Apple are.

They specifically criticise three areas: freedom of association, hours of work, and abuse of student internships.

With regards to freedom of association, they point out that basically all Apple demands of its suppliers is that they comply with the laws regarding freedom of association in the supplier’s country. What they don’t say is that many of the countries of production have completely inadequate laws regarding this matter. In fact, weak laws regarding freedom of association are a major attraction for foreign investment, and have often been established by the governments especially for this purpose.

I recently wrote about Malaysia, which is one example of this. Another example is China: There are no independent labour unions; all unions are required to be a member of the AFCTU, a central, party-led organisation of labour unions. In addition, key members of the unions are generally placed by the company’s management. So trade unions in China do not represent the labourers’ interests, but the company’s and the state’s – where the state, of course, has an overriding interest in the economic well-being of the company.

So what Apple really demands of its suppliers is that they conform to a corrupt and unworkable legal system that is geared towards worker exploitation. If it wanted to make a difference, it would have to impose additional requirements; however, then it would have to report much, much lower compliance figures.

Concerning working hours, Apple claims that it has been largely able to push working hours below 60 hours a week (note that regular 60-hour weeks are still illegal even in China). But it is easy to see that working hours peak whenever new Apple products are released (witness the iPhone 5 launch in September 2012 in the graph). Apple’s gigantic marketing machine thus still places a burden on its labour force: Production quotas and mandatory overtime go up whenever an Apple product is brought to the market.

Another point of criticism voiced by Good Electronics is the ongoing abuse of student workers, who are forced to work at factories by their schools (even if their subject of study is not related to the work at all), and receive even lower pay than regular workers. Apple promised to look into this in 2013.

We should note that Apple is still far ahead of most other brand electronics companies with regards to transparency: most don’t have this sort of supplier report. If other companies decline to provide this kind of report, we have to assume that they would score lower grades even under the lax criteria applied by Apple.

But Apple’s report also makes it abundantly clear that a lot of the causes for the ongoing mistreatment of workers at Apple’s factories originate from Apple itself. They are the result of cost and time pressure that Apple passes down to its suppliers. If Apple spent just a little more on its manufacturing, for instance, this would allow the workers’ wages to rise substantially without noticeably increasing the cost of Apple products, so workers could get by without working twelve hours a day.

Edit: If you want to get a feeling for how wide Apple’s supplier network is, have a look at this map of suppliers, which has been created based on the supplier list published by Apple.

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The grim situation of migrant workers in Malaysia

While the bad conditions in electronics factories in China have received some attention – supplier names like Foxconn or Yonghong come to mind – Malaysia is another popular outsourcing location of the global electronics giants. How popular? SOMO has just published a new report called Outsourcing Labour by makeITfair on the working conditions of migrant workers in the Malaysian electronics industry. It states that the electronics sector now makes up 27% of Malaysia’s manufacturing output and 49% of its exports.

Malaysia has been quite successful in supplying global corporations with cheap labour. Differently from Chinese factories, which draw their labour force mainly from the domestic countryside, in Malaysia the hardest work is done by migrants from countries like Indonesia, Burma or Nepal. The report summarises interviews with workers at three electronics factories; implicated brand companies that source from these factories are stated as follows: Amtek, Denso, Hitachi, JVC, Mitsubishi, Panasonic, Samsung, SONY, Sharp, Toshiba and TOTO.

If working conditions in the factories are not great in general, the position of migrants is especially weak: They are legal in the country only because of their work contract; if they get fired, they are deported immediately. This vulnerability is exploited by their employers:

  • Indirect employment: Workers are generally recruited through agencies, and frequently these agencies also act as their employers. This means that workers cannot join trade unions, as they are not employed by the factory, and their employing agency may also apply their own standards, make deductions from their wages, etc.
  • Fraudulent promises: Workers generally receive much less pay than they were promised initially. Many workers signed a contract upon recruitment, but did not receive a copy and cannot prove what they were promised; their work contracts are usually in a language they cannot understand.
  • Debt bondage: Workers generally have to take up a lot of debt in order to be able to move to Malaysia; outsourcing agencies generally also charge high fees. Since they receive much less pay than they were promised, it takes them several years to pay back these debts, which binds them to their employer.
  • Intrusions into privacy: Workers need to undergo HIV and pregnancy tests, and women have to sign clauses that allow them to be fired if they get pregnant.
  • No social benefits: Most of the workers have a very low health ensurance; if they take a sick leave, they will not get paid.
  • Long working hours and mandatory overtime: The workers interviewed generally reported working twelve hours a day, six days a week.
  • Dangerous working conditions: In some of the factories, the workers were exposed to toxic fumes.

While receiving less pay than their Malaysian colleagues, the migrant workers work longer hours and are treated worse. The report concludes that brand companies should specifically include migrants in their Corporate Social Responsibility guidelines and demand that their suppliers comply with labour rights.

The report also includes a nightmarish testimony of one worker where she and her newly-arrived colleagues were kept in a sort of shed for two months until a working place and hostel could be found for them. Later she is met with arbitrary pay deductions and being kept like a prisoner, sharing a bathroom with 10 people and working 12 hours a day.

Interestingly, two of the brand companies involved, which were contacted by SOMO, were not even aware that they were sourcing goods from the factories. This highlights how difficult it is for brand companies to control their supply chain: the factories were likely second-tier suppliers, delivering to another subcontractor. However, it is also clear that brand companies are not meeting the responsibility they have towards the people who do the work they derive their profits from. Companies like Samsung could detract a small share of their gigantic marketing budgets and purpose it towards auditing their supply chain.

Another interesting issue that we have seen similarly in China is that an estimated 70–80% of the migrant workers are women. The report says that they are perceived by the employers to be more docile and skillful. The production of electronics can thus also be seen as another chapter in the exploitation of women, specifically.

You can read the complete report at makeITfair.

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Quick review of Nager-IT’s fair mouse

It’s been over a month since the German non-profit Nager-IT announced that the first partially-fair computer mouse was available for sale. I promised then to deliver a review as soon as I get my hands on a specimen.

I’ve been using my mouse for a while now, and I’m very satisfied. The mouse comes in a compact cardboard box, only accompanied by a sheet of paper containing product information. None of the obnoxious plastic-shell packaging that somehow has become popular. Even this first impression tells you that a lot of thought has gone into the ecological aspects of the mouse as well.

The mouse itself gives off a robust and well-made impression. I quite like the marbled look of my mouse, which makes it a unique piece; the bio-degradable shell of the mouse is pleasant to touch (it feels like very slightly roughened plastic). The green LED is a nice touch as well. Functionally, it does what a computer mouse is supposed to do: Two buttons plus a clickable scroll wheel, all working as expected. It’s an optical mouse with a cord length of about 1m.

With regards to size, the mouse occupies a middle ground: it’s neither as tiny as a laptop mouse nor as huge as a high-end product. This means that it’s compact and light enough to carry along, but still large enough to provide for comfortable regular use. It’s probably not the most ergonomic mouse ever produced (if there can even be such a thing as an ergonomic mouse), but the symmetrical shape means that it works equally well for left-handed use as for right-handed – something that is often missing in other mice.

So if you want to do something to support Nager-IT, who have released the mouse after years-long research and will continue to investigate ways to produce computer hardware more fairly, you can order this mouse for the price of 26,90 € off their web site. Unfortunately, there is still no order information in English; however the form is fairly self-explanatory. Note that the clickable scroll wheel is an add-on that requires you to check a corresponding box.

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Nager-IT announces availability of partially fair mouse

The German project Nager-IT have been working on building a fair mouse. Recently, they have announced the availability of their first model. To my knowledge, this is the first piece of partially fair, consumer-oriented hardware that you can readily buy.

The price tag is modest as well: Just 26,90 € plus shipping for the basic model. A page for placing orders is up in German; some pictures of the product can also be viewed. Note that there is no information on shipping costs to countries except Germany.

The mouse comes in a variety of combinations of body parts in the colours green, white, and transparent, or an individual option for an extra 2 €. Making the scroll wheel a third, clickable button is an extra 4 €. Obviously, we’re dealing with a very basic, no-nonsense mouse.

The main strategy for achieving fairness appears to have been choosing trustworthy suppliers with decent working conditions for as many parts as possible. Obviously, this is easier for the stages of the supply chain closer to the end product: For instance, the assembly of the mouse is performed in Germany, in a workshop that provides employment to the disabled and mentally ill. On the second stage of the supply chain, companies from China or the Philippines with unknown working conditions appear as well.

One aspect that is hardly touched by this strategy is raw materials. A few electronic components are certified conflict-free, but that hardly suffices to call them fair. This is hardly surprising, as there is currently hardly any way to tell the history of those raw materials, however I mention it because this is a focal point of the FairPhone initiative which I wrote about before.

On the whole, two thirds of the mouse are considered to be fair by its makers. They intend to improve upon this in the future; good sales of their current product might help them win the interest of potential suppliers.

The release announcement has also generated a good bit of resonance in some likely parts of the German internet. We’ll be back soon with a short product review and keep following NagerIT.

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(Partially) FairPhone to arrive in Fall 2013

You may be familiar with FairPhone, a Dutch NGO with the goal of producing the world’s first ethical smartphone.

While the initiative has kept a fairly low profile so far, it appears that quite a bit has been going on behind the scenes. Some more content is starting appear on the web site, and yesterday, the German news paper taz posted an article about FairPhone.

The good news is that the initiative has made progress to the point that they are anticipating a release date: According to the article quoted above, the design phase will finish around June 2013, after which the project will produce the first batch of phones using crowdfunding, and ship the first batch of 10 000 devices in Fall.

What will the resulting phone look like? Since the focus is not on technical innovation, it will be a fairly standard middle-class smartphone probably running Android. As one of the project partner’s is Geeksphone, one could speculate that, like said company’s current product, it will not require rooting or similar silly exercises to obtain full access to the device. The price tag is estimated to be between 250–300 euros.

Of course, it’s essential to take a look at what is “fair” about this phone. Given the lack of infrastructure, it would be impossible to build a phone today that is 100% fair: This would mean fair treatment of the workers in all the mines where the dozens of minerals used are mined, as well as in all the plants where components and the final device are manufactured. Given the poorly controlled conditions under which especially mining takes place, this means that a lot of infrastructure has to be built. Consequently, FairPhone pursues an incremental approach, meaning that their first product will only partially be fair.

Notably, FairPhone cooperates with the Conflict-Free Tin Initiative, whose goal it is to deliver tin from the D.R. Congo without financing the ongoing military conflict. Also, manufacturing of the phone will take place under controlled conditions. Still, this only covers one of the many minerals used, and still leaves open the question of whether the phone’s electronic components are manufactured under controlled conditions as well. It seems as though the FairPhone will therefore be, in actuality, mostly unfair.

This notwithstanding, FairPhone could be the first to bring the so-far nonexistent dimension of “fairness” to the smartphone market. Given the current state of one manufacturer being as bad as the next one, buyers have no way to express a preference towards ethically produced phones. The availability of a FairPhone, might be the first step in changing that.

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Mission statement

Our society thrives on technology. As internet users, we all do; for many of us, computers, smart phones and other devices constitute not just tools, but a way of life. We praise the information age with its interconnectedness, enabling efficient exchanges of ideas and opening up many new possibilities for mankind.

However, once we look beyond all the great opportunities computer technology grants us, we see less reason for optimism. Be it environmental or social issues, be it dangerous and destructive mining for resources in third-world countries, assembly under slave-labour conditions, or gigantic mountains of e-waste that are not properly disposed of: The ways electronic devices are manufactured, handled and disposed of today leave much to be improved.

The first step to improving a bad situation is information. We will be posting news from various sources as well as compose our own writeups and opinion pieces. This blog will offer a platform to get informed, share information with others, and discuss. We also want to find and point out ways in which everyone can get involved, to get beyond the first step. In this way, we want to help achieve a situation where informed consumers and tech enthusiasts can demand from manufacturers the devices they really want: sustainable, fair-trade electronic devices.

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