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PORTSIDELABOR  January 2012, Week 2

PORTSIDELABOR January 2012, Week 2

Subject:

Two on Foxconn in China

From:

Portside Labor <[log in to unmask]>

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[log in to unmask]

Date:

Fri, 13 Jan 2012 22:00:49 -0500

Content-Type:

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text/plain (283 lines)

Two on Foxconn in China

Apple Opens Partners' Doors to Labor Group, Lists
Suppliers

By Stanley James and Adam Satariano - Jan 13, 2012

http://www.bloomberg.com/news/2012-01-13/apple-opens-suppliers-doors-to-labor-group-after-foxconn-worker-suicides.html

Apple Inc. (APPL) agreed to let outside monitors into
factories of partners, such as Foxconn Technology Group
(2317), and listed suppliers for the first time to
counter criticism about conditions of workers making
its gadgets.

The iPhone maker becomes the first technology company
to join the Fair Labor Association. The
Washington-based FLA was set up in 1999 to monitor
workplace environments globally in an initiative by
former U.S. President Bill Clinton, and its
participants include Nike Inc. (NKE) and Nestle SA.
(NESN) Apple also released its annual suppliers' audit
yesterday.

Apple's affiliation with the FLA highlights the risk to
multinational companies' brands due to difficulties in
policing suppliers as they outsource manufacturing to
cut costs. Nike became a founding member of the
association after reports of low pay, abuses and poor
conditions at sportswear factories in Asia sparked
boycotts and protests in the 1990s.

"Most big corporations have their 'Nike moment' at some
stage -- when they realize the difficulties of
maintaining their standards, particularly in an
increasingly global environment," FLA President Auret
van Heerden said. "The problem with the supply chain is
that it's a moving target."

The move by Cupertino, California-based Apple will
intensify scrutiny of its suppliers, including
Seoul-based Samsung Electronics Co. (005930) and
Inchon, South Korea-based Hynix Semiconductor Inc.
(000660) The FLA makes unannounced checks on about 5
percent of its members' supply chains each year,
according to Van Heerden. Underage Labor

Apple released a list of 156 companies that represent
97 percent of procurement costs, along with its annual
report on factories where the iPhone, iPad and other
products are made.

In the course of the 229 audits, Apple said it
discovered several violations, including instances of
underage labor at five facilities. Apple said it
required the suppliers to support the young workers to
return to school and to improve their management
systems to add age-verification procedures. Apple also
said it found instances of involuntary labor and
stopped working with one of suppliers involved.

Apple also discovered at least 90 factories with
records showing workers were exceeding its maximum of
60 hours a week and at least one day of rest per seven
days of work. The company found violations of
anti-discrimination rules for workers who were pregnant
or had hepatitis B. Apple said it made the suppliers
end the discriminatory screenings.

Van Heerden, of the FLA, said growing scrutiny of
global companies by investors and consumers means they
are more likely to insist suppliers introduce best
practices in countries where governments are unable or
unwilling to do so.

"If you're a 16-year-old girl in a developing country,
your best chance of enjoying proper rights is if you
get to work at a multinational," he said. "The power of
their contract is more powerful than the power of law."
Foxconn Scrutiny

Apple's biggest supplier, Taiwan's Foxconn, has been a
subject of scrutiny after at least 12 workers have
committed suicide at its plants in China. Three died
last year and more than 70 were hurt in blasts at two
iPad facilities, one of which was also owned by
Foxconn. In response to pressure from Apple and the
media, Foxconn more than doubled wages in 2010 for some
workers in China and employed counselors.

Apple will now subject itself and its suppliers to the
FLA's membership criteria, including submitting to
audits and enforcing a code of conduct based on
standards approved by the United Nations' International
Labor Organization.

Taipei-based Hon Hai Precision Industry Co. (2317),
Foxconn's flagship listed unit, gets 22 percent of its
revenue from Apple, data compiled by Bloomberg show.
Pegatron Corp. (4938) earns 16 percent of sales from
the U.S. company. Hong Kong Demonstrations

Efforts to improve conditions have failed to appease
some activists and labor groups. Demonstrators at the
September opening of Apple's flagship store in Hong
Kong called on the company to protect workers' rights.
China Labor Watch last month said the explosion at
Foxconn's plant in May and another on Dec. 17 at a
factory owned by Taipei-based Pegatron were caused by
ignition of aluminum dust produced by polishing iPad
cases.

Independent monitoring isn't the panacea to problems in
China's factories, said Geoffrey Crothall,
communications director of workers-rights group China
Labour Bulletin.

"The problem isn't whether or not they do audits, but
whether workers are treated in a reasonable manner," he
said. "What the workers need is an effective voice in
the workplace." Brand Value

Apple is more vulnerable than most to damage to its
reputation, according to an annual ranking compiled by
Interbrand. The brand was valued at $33.5 billion last
year, the eighth-highest in the world and up from 17th
place in 2010, according to the index.

The company's affiliation to the FLA marks a further
broadening of oversight for the agency. The association
was formed in 1999, primarily by the apparel industry,
after Clinton challenged companies and pressure groups
to address rising complaints about standards at
factories operating overseas, according to its website.

Beaverton, Oregon-based Nike, the world's largest
sportswear maker, was a founding member. Adidas Group
(ADS), Hennes & Mauritz AB and Juicy Couture owner Liz
Claiborne Inc. (LIZ) are among 33 participating
companies.

Basel, Switzerland-based Syngenta AG, the world's
largest maker of agricultural chemicals, sought the
FLA's help in 2004 to address concerns over child labor
and working conditions on Indian cottonseed farms.
Nestle, based in Vevey, Switzerland, in November
commissioned the agency to assess the use of child
labor and conditions at West African producers of cocoa
used in its products such as KitKat and Quality Street
candies.

Microsoft Corp. (MSFT) said this week that a protest on
Jan. 4 by 150 workers at a Foxconn factory in southern
China wasn't related to working conditions and the
majority of employees who took part had returned to
work. Some had threatened to jump from the roof of a
factory building, the Daily Telegraph reported, citing
an unidentified person said to have participated in the
action.

Forty-five of the 150 workers, who were protesting
against a plan to transfer them to another business
unit, resigned, according to a Foxconn statement.

To contact the reporters on this story: Stanley James
in Hong Kong at [log in to unmask]; Adam Satariano
in San Francisco at [log in to unmask]



Foxconn Resolves a Dispute With Some Workers in China 

By DAVID BARBOZA

January 12, 2012

http://www.nytimes.com/2012/01/13/technology/foxconn-resolves-pay-dispute-with-workers.html

SHANGHAI -- Foxconn Technology, a major supplier to
several electronics giants, said on Thursday that it
had resolved a pay dispute with scores of workers at
one of its factories in central China after a large
protest that involved threats from some workers to
commit suicide.

The company, the largest contract electronics
manufacturer in the world, whose clients include Apple,
Hewlett-Packard and Microsoft, said the dispute last
week had been resolved successfully and peacefully but
that 45 workers had resigned.

In a statement released on Thursday, Foxconn said most
of the protesting workers had agreed to return to work
after negotiations with the company and local
government officials. Details of the agreement were not
released, but one of the workers said they had been
promised additional compensation.

Foxconn said the protest had involved about 150 of the
32,000 employees at its campus in the city of Wuhan. It
was the latest incident in a long-running series of
labor troubles at the company, which supplies popular
goods like the Apple iPhone, the Amazon Kindle and the
Microsoft Xbox.

In 2010, there was a wave of suicides by distraught
workers at several of Foxconn's Chinese sites. The
company, which is controlled by Hon Hai Hai Precision
Industry of Taiwan, has been accused of forcing workers
to endure long hours and harsh working conditions for
little pay.

Under pressure from Apple and other major brands,
Foxconn has pledged to improve working conditions in
China, and the company has hired psychiatrists to
counsel workers.

The company has also begun a huge program to invest in
robots and to move some of its production to the
central and western parts of China, where labor is less
costly and more abundant. The company says the new
locations also allow migrant workers to live closer to
their hometowns.

But while working conditions at Foxconn and other
exporters in China may be slowly improving, the demands
of workers seem to be rising more rapidly.

There has been a rash of strikes and labor protests
across the country in recent months, partly in response
to inflation and a greater awareness of the labor laws.
The strikes, which sometimes involve thousands of
workers, often include demands for higher pay,
insurance and better working conditions.

In Wuhan, some of the workers who protested said they
were angry about being forced to move from Foxconn's
biggest campus, in the southern Chinese city of
Shenzhen, to Wuhan.

One worker who participated in the Wuhan protest said
by telephone that employees shifted to Wuhan had been
promised about $450 a month in salary, including
overtime pay, but that they had been given about a
third less than that and that working conditions in
Wuhan were much more difficult.

The worker, who asked not to be identified for fear of
being punished by Foxconn, said more than 100 workers
had decided to protest on the roof of a three-story
building on the campus. The protest lasted more than
eight hours.

Several threatened to commit suicide if their demands
were not met, he said. "That day was very cold," he
said. "Some women could not stand the freezing
temperatures and fainted."

In a statement released on Thursday, Foxconn said: "The
welfare of our employees is our top priority, and we
are committed to ensuring that all employees are
treated fairly and that their rights are fully
protected."

Gu Huini contributed research.

____________________________________________

PortsideLabor aims to provide material of interest to
people on the left that will help them to interpret the
world and to change it.

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