By Poornima Gupta
SAN FRANCISCO (Reuters) - Apple Inc and Foxconn have improved work and safety conditions at the Chinese factories that make most of the world's iPads and iPhones, but the auditors they enlisted to monitor the process warn that the toughest tasks lay ahead.
The real challenge is in reducing working hours by almost a third for the hundreds of thousands working in Foxconn plants across Southern China to comply with local labor laws by 2013, the Fair Labor Association said on Tuesday.
The group - of which Apple is a member - earlier this year found multiple violations of labor law including extreme hours after kicking off one of the largest investigations ever conducted of a U.S. company's operations outside America. Apple agreed to the probe to stem criticism that its products were built on the backs of mistreated Chinese workers.
The world's most valuable company and Foxconn - which counts the likes of Dell Inc, Sony Corp, and Hewlett-Packard Co among its clients - agreed to slash overtime, beef up safety, hire new workers and even upgrade dormitories.
In a report tracking the progress of those commitments, the FLA said it had verified that agreed-upon changes had been instituted and that Apple was trying to hold its partner, the world's largest contract manufacturer, accountable.
"One of the sheer engineering challenges is being able to shorten the production cycle, so that they can get it all done in 49 hours instead of 60 hours. And the other part of the challenge then is workers' expectations," Auret van Heerden, president and CEO of the FLA, said in an interview.
The latest report card on Apple-Foxconn comes after first findings and a timeline for improvements were announced in March, though some industry observers said it was not entirely independent because of close ties with corporate members. Since that March audit, rights groups including China Labor Watch have conducted their own studies.
Some factory workers at Foxconn - an affiliate of Taiwan's Hon Hai Precision Industry - have also protested potential lost wages as hours get cut. Both the FLA and Foxconn have tried to help employees through the transition.
"A lot of workers have clearly come to Shenzhen to make as much money as they can in as short a period as they can, and overtime hours are very important in that calculation," Van Heerden said.
"If you reduce overtime significantly, you work that idea through with workers," he said, adding that given the severe shortage of labor in China it is likely that Foxconn would ensure that workers are happy with their compensation and avoid the risk of them leaving.
Foreign firms have long grappled with working conditions in China, dubbed the world's factory because of its low wages and efficient coastal transport and shipping infrastructure. Nike Inc in the 1990s was also the target of investigations and eventually agreed to institute changes.
Global protests against Apple swelled after reports spread in 2010 of a string or suicides at Foxconn's plants, blamed on harsh working conditions and the alienation that migrant laborers, often from impoverished provinces, face in a bustling metropolis like Shenzhen, where two of the three factories the FLA inspected are located.
Foxconn is estimated to make half the world's consumer electronics.
Protesters have since kept up a small but regular presence at Apple events, holding up placards urging the $620 billion corporation to make "ethical" devices.
Apple CEO Tim Cook, who took over from the late co-founder Steve Jobs last year, has shown a willingness to tackle the criticism head-on.
"We've been making steady progress in reducing excessive work hours throughout our supply chain. We track working hours weekly for over 700,000 workers and currently have 97 percent compliance with the 60-hour maximum workweek specified in our code of conduct," spokesman Steve Dowling said in a statement.
(Editing by Edwin Chan and Matthew Lewis)
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.
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."
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."
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