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Foxconn Apple Factories Violated Chinese Labor Laws, According To Fair Labor Association

By PETER SVENSSON 03/29/12 04:54 PM ET AP

Foxconn Apple Factories Labor
Participants dressed up to represent Foxconn workers take part in a protest against Taiwanese technology giant Foxconn, which manufactures Apple products in mainland China, outside an Apple retail outlet in Hong Kong on May 7, 2011. AFP PHOTO / Antony DICKSON

NEW YORK -- The Chinese workers who often spend more than 60 hours per week assembling iPhones and iPads will have their overtime curbed and their hourly wages raised after a labor auditor hired by Apple Inc. inspected their factories.

The Washington-based Fair Labor Association says Hon Hai Precision Industry Co., the Taiwanese company that runs the factories, is committing to reducing weekly work time to the legal Chinese maximum of 49 hours.

That limit is routinely ignored in factories throughout China. Auret van Heerden, the CEO of the FLA, said Hon Hai is the first company to commit to following the legal standard.

Apple's and FLA's own guidelines call for work weeks of 60 hours or less.

The FLA found that many workers at the Hon Hai factories want to work even more overtime, so they can make more money. Hon Hai, also known as Foxconn, told the FLA that it will raise hourly salaries to compensate workers for the reduced hours.

Heerden said that it's common to find workers in developing countries looking for more overtime, rather than less.

"They're often single, they're young, and there's not much to do, so frankly they'd just rather work and save," he said.

The FLA auditors visited three Foxconn complexes in February and March: Guanlan and Longhua near the coastal manufacturing hub of Shenzhen, and Chengdu in the inland province of Sichuan. They employ a total of 178,000 workers, with an average age of 23.

Average monthly salaries at the factories ranged from $360 to $455. Foxconn recently raised salaries by up to 25 percent in the second major salary hike in less than two years.

Foxconn employs 1.2 million workers in China to assemble products not just for Apple, but for Microsoft Corp., Hewlett-Packard Co. and other pillars of the U.S. technology industry.

Foxconn's move to lift wages is likely to have an impact across the industry. Given Apple's unusually high margins, it's able to absorb higher manufacturing costs. But other electronics companies, particularly PC makers, have very slim margins, and may need to look elsewhere to have their products assembled.

Workers who make Apple products have been the subject of increasing scrutiny, in part due to a one-man Broadway play by Mike Daisey. Public radio program "This American Life" used Daisey's monologue in a show about Foxconn on Jan. 6, but retracted it two weeks ago, saying that Daisey had fabricated key parts of it, including that he saw underage workers emerging from Foxconn factories.

The FLA didn't find instances of child or forced labor.

Apple has kept a close watch on its suppliers for years, and in January took the further step of joining the FLA. The organization has audited overseas suppliers for clothing manufacturers, but Apple was the first electronics company to join. It also commissioned the FLA to produce a special audit of Foxconn's factories.

"Our team has been working for years to educate workers, improve conditions and make Apple's supply chain a model for the industry, which is why we asked the FLA to conduct these audits," Apple said in a statement.

Apple CEO Tim Cook visited a Foxconn factory in Zhengzhou, China, on Wednesday.

The FLA has its roots in a 1996 meeting of multinational companies and nonprofits convened by President Clinton, who challenged them to improve conditions for garment and shoe workers. Its 19-member board is composed equally of representatives from member companies, universities and nonprofits like the Global Fairness Initiative. The organization is funded by participating companies.

Labor unions have criticized Apple's use of the FLA, insisting that audits are a "top-down" approach. Foxconn's workers would be better served, they believe, by being able to organize.

"The report will include new promises by Apple that stand to be just as empty as the ones made over the past 5 years," said SumOfUS.org, a coalition of trade unions and consumer groups, ahead of the release of the report.

The FLA found few safety violations, noting that the company had already dealt with problems like blocked fire exits and defective protective gear. It's also taken step to reduce the amount of aluminum dust in the air, after the metal created an explosion at the Chengdu factory last year, killing four workers.

The FLA said Foxconn has been recording only accidents that caused work stoppage, but is now committing to recording and addressing all accidents that result in an injury.

Heerden said his auditors found Foxconn workers are the happiest with their jobs when they work 52 hours a week, well below the amount they often put in. Reducing their hours to 49 hours should help Foxconn retain workers in the long run, he said.

The auditors examined one years' worth of payroll and time records at each factory, conducted interviews with some workers and had 35,000 of them fill out anonymous surveys.

Apple has started tracking the working hours of half a million workers in its supply chain, and said that 89 percent of them worked 60 hours or less in February, even though the company was ramping up production of the new iPad. Workers averaged 48 hours per week.

The Foxconn factories are the last step in the process of manufacturing an iPhone or other Apple device, most of which have hundreds of components. Research firm IHS iSuppli estimates that Apple pays $8 for the assembly of a 16-gigabyte iPhone 4S and $188 for its components. It sells the phone wholesale for about $600 to phone companies, which then subsidize it to be able to sell it for $200 with a two-year service contract.

Related on HuffPost:

Take a look at the slideshow (below) to view some of the most surprising facts revealed during an ABC special report at a Foxconn factory in China.
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  • Handmade Gadgets

    On February 21, <a href="http://www.huffingtonpost.com/2012/02/22/nightline-apple-supplier-foxconn_n_1293393.html?ref=technology" target="_hplink">ABC aired a "Nightline" segment featuring Bill Weir's visit to a Chinese Foxconn factory</a> responsible for making some of Apple's popular devices. During a tour of the factory, Weir says he "expected more robots" but in fact most of the gadgets at Foxconn are made the old-fashioned way: The high tech parts are put together by hand. For example, iPhones are assembled by hand in 141 steps. One iPad takes five days to assemble and passes through 325 sets of hands.

  • Insane Output

    Two shifts of workers toiling in 12 hour shifts can make 300,000 iPad camera modules in one day, not to mention shape sleek iPads out of "raw hunk[s] of aluminum" at a rate of 10,000 per hour. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

  • 7 To A Room

    Many workers live at the factory, where they pay $17.50 per month to live 7 to a room in Foxconn dormitories. <a href="http://www.forbes.com/sites/connieguglielmo/2012/02/22/nightline-goes-inside-apple-factories-in-china/" target="_hplink">The average starting salary is $285 per month,</a> and workers must pay for their food. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

  • No Free Lunch

    Workers get two hour-long meal breaks during each 12-hour shift. They eat together in a cafeteria where they pay $.70 a meal. This is about a quarter of their hourly wage. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

  • Tim Cook Investigated Suicides

    In 2010, after a spate of suicides at Foxconn's Shenzen plant, then COO Tim Cook flew to China to investigate the matter. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">According to Nightline,</a> Cook put together a team of psychiatric experts to examine the issue. It was at that team's suggestion that the infamous nets were installed between the buildings to prevent suicides. There have been 18 worker suicides at Foxconn since 2010. <a href="http://www.reuters.com/article/2012/02/15/us-china-apple-idUSTRE81E1FQ20120215" target="_hplink">According to Reuters' interview with Fair Labor Association president Auret van Heerden, the group's initial findings from its audit of Foxconn</a> suggested that the suicides could have been "a function of monotony, of boredom, of alienation perhaps."

  • Young Workers

    Weir said he was surprised to see how young the workers were. He said many were in their late teens and no one looked like they could be over 30. Many had left their hometowns, oftentimes in the countryside, in order to get jobs at Foxconn. Weir also toured Chengdu and spoke with the relatives of workers who had left for jobs at Foxconn. According to Cult of Mac, <a href="http://www.cultofmac.com/147878/foxconn-employees-say-underage-workers-were-hidden-before-fla-inspection/" target="_hplink">Foxconn may have hidden underage employees</a> when the Fair Labor Association conducted its inspections. While Apple allows for workers as young as sixteen to assemble their products, those eighteen and under are afforded "special protections," <a href="http://www.appleinsider.com/articles/12/02/22/factory_workers_claim_foxconn_hid_under_age_employees_before_fla_inspection.html" target="_hplink">according to Apple Insider.</a> These include not being allowed to perform some tasks and working shorter hours than older workers.

  • Foxconn Exec Wants To Pay More

    When asked how Foxconn would react if Apple suggested doubling workers' pay, Foxconn executive Louis Woo told Weir that the company would welcome a raise for employees. "Why not?" Woo said. "That would be good for the employees and also definitely good for China and good for us."

  • Air Showers

    Workers have to wear static-proof jackets and take "air showers" to make sure the work area remains dust-free. Even one spec of dust could prove ruinous to the iGadgets' delicate innards. <a href="http://abcnews.go.com/watch/nightline/SH5584743/VD55173552/nightline-221-apples-chinese-factories-exclusive" target="_hplink">Image via Nightline</a>

  • WATCH A CLIP FROM THE NIGHTLINE SEGMENT

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