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Apple Hit With 2 Shameful Allegations

By Richard Adhikari MacNewsWorld ECT News Network
Jul 29, 2013 3:20 PM PT

Pegatron, which is reportedly making a new, less-costly plastic iPhone, has become the latest Apple supplier to be accused of labor violations, in a report published by China Labor Watch on Monday.

Apple Hit With 2 Shameful Allegations

Pegatron has denied the allegations, and both it and Apple have announced they will investigate the claims.

Apple has conducted 15 comprehensive audits at Pegatron facilities since 2007, including surprise audits at two Pegatron subsidiaries within the past 18 months, the company said.

"CLW has uncovered myriad violations," maintained CLW Executive Director Li Qiang. "This does not bode well for the efficacy of the audits."

"Here we go again," Kaytee Riek, campaigns manager for, told MacNewsWorld. "How many more times do we have to go around this circle before Apple gets the message and actually fixes things?"

Apple did not respond to our request to comment for this story.

What CLW Found

CLW undercover investigators interviewed nearly 200 workers outside three Pegatron Group factories from March through July. The factories are Pegatron Shanghai, which makes iPhones; Riteng, a Shanghai subsidiary; and AVY, a subsidiary in Suzhou. The three have more than 70,000 employees in all.

Pegatron allegedly committed at least 86 labor rights violations in areas including women's rights, hiring of underage labor, contract violations, excessive working hours, insufficient wages, poor working conditions, poor living conditions, and abuse by management.

Employees in the factories apparently worked 67-69 hours weekly, although China's labor laws specify a 49-hour weekly maximum. All three factories allegedly did not compensate workers for daily 15-to-30-minute meetings.

Working undercover, one CLW investigator put in 23 hours of overtime from June 28 through July 4, excluding three hours spent in the daily meetings. At Riteng, workers who decline overtime face being banned from getting overtime work for an entire month.

Two of the three factories allegedly had several employees below the age of 18, who were required to work the same hours as adults.

Hourly wages ranged between US$1.30 and $1.50. In Shanghai, China's most expensive city, where the average monthly wage is $764, workers' salaries before overtime averaged roughly $268.

Employees worked 45-50 hours a week on average at its factories in China over the past two to three months, Pegatron claimed.

"Given current wage levels at Pegatron, no worker would be willing to work those sorts of hours on a regular basis," CLW's Li told MacNewsWorld. "Overtime is the only way workers can make a living wage."

CLW has not reported any of its findings to the Chinese authorities because its investigators have been detained by local authorities, Li said. One was detained while looking into Pegatron's work practices.

Apple's History With Labor

Over the years, Apple supplier Foxconn has repeatedly drawn fire for labor violations. It eventually had to install safety netting on some of its buildings in China to prevent workers from jumping to their deaths, and it allegedly makes new hires sign pledges not to kill themselves.

However, this labor rights issue "is a broad worker-relations and socio-political issue which just happens to be taking place in China," Carl Howe, a research director at the Yankee Group, told MacNewsWorld. Similar things happen in the United States.

Apple is to some extent singled out unfairly -- Foxconn and Pegatron have other high-tech clients -- because "its name generates more page views than its competitors," Howe said.

"This is more of a philosophical discussion than a technical one," contended Andrew Eisner, chief gadgetologist at Retrevo. "This is part of capitalism -- source raw materials cheaply -- make them where it's cheapest."

The Fantastic Plastic iPhone

If Apple is indeed working on a low-cost plastic iPhone, that "runs a bit counter to what Steve Jobs stood up for," Eisner told MacNewsWorld.

"For a company that has built its reputation and cachet on stylish and quality products, I'm not sure if this is a step in the right direction," he added.

Apple "never designs products based on just price," Howe pointed out. "Think iPhone nano -- not cheap iPhone."

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