Apple Enforces "Supplier Code of Conduct" After Child Labor Discovery

[Marc]

Since 2006, Apple has regularly audited its manufacturing partners to ensure that they conform to Apple's Supplier Code of Conduct (ASCC), which essentially codifies Western ethical standards with regard to the environment, labor, business conduct, etc. Core violations of ASCC 'include abuse, underage employment, involuntary labor, falsification of audit materials, threats to worker safety, intimidation or retaliation against workers in the audit and serious threats to the environment. Apple said it requires facilities it has found to have a core violation to address the situation immediately and institute a system that insures compliance. Additionally, the facility is placed on probation and later re-audited.' Apple checks 102 facilities, most of which are located in Asia, and these facilities employ 133,000 workers. The most recent audit of Apple's partners revealed 17 violations of ASCC. The violations include hiring workers who were as young as 15 years of age, incorrectly disposing of hazardous waste, and falsifying records. In Apple's recently released Supplier Responsibility 2010 Progress Report (PDF), they condemned the violations and threatened to terminate their business with facilities that did not change their ways.

[Sidney Vianna]

Thanks Marc for the informative post and attachments. It is refreshing when a mainstream brand practices transparency with the results of their (own and supplier) performance against codes of conduct. Way too often corporations are eager to boast about their codes of conduct, but are less than forthcoming with how the code is enforced and reports of performance.

Kudos to

[Wes Bucey]

Interesting! I wonder what we (as a profession) could reasonably do to persuade other organizations to similarly police THEIR supply chains? In other words, when the bosses of those other organizations ask the damnable question, "What's in it for me?" that we have a compelling answer.

[Jim Wynne]

Originally Posted by Sidney Vianna

Thanks Marc for the informative post and attachments. It is refreshing when a mainstream brand practices transparency with the results of their (own and supplier) performance against codes of conduct. Way too often corporations are eager to boast about their codes of conduct, but are less than forthcoming with how the code is enforced and reports of performance.

Kudos to

I think it's hard to separate corporate posturing from acts of altruism. There's value to be had from this kind of facade, and the cynic in me thinks that's probably what's going on here.

Let's be realistic. Apple is aware that the kinds of practices it's bewailing are endemic in China and elsewhere in emerging economies, and they were aware of it when the business was sourced. The problem isn't with individual companies in China (or elsewhere) it's in the cultures of those places. The greed of corporate America has been allowed to run around the globe unfettered, with the result being that deals are made in which certain distasteful elements are tacitly accepted as part of the bargain.

[Sidney Vianna]

Originally Posted by Jim Wynne

I think it's hard to separate corporate posturing from acts of altruism. There's value to be had from this kind of facade, and the cynic in me thinks that's probably what's going on here.

Let's be realistic. Apple is aware that the kinds of practices it's bewailing are endemic in China and elsewhere in emerging economies, and they were aware of it when the business was sourced. The problem isn't with individual companies in China (or elsewhere) it's in the cultures of those places. The greed of corporate America has been allowed to run around the globe unfettered, with the result being that deals are made in which certain distasteful elements are tacitly accepted as part of the bargain.

Let me point the obvious: greed is part of human nature and won’t be eliminated from the world. Let me also remind us of how deplorable (by today’s standards) working and labor conditions were in factories in Europe and the rest of the “developed world” during the early stages of the Industrial Revolution. Things have changed quite dramatically since then. Without a doubt, many communities in Asia and other parts of the world are benefiting from the globalization drive. While many others are worse off, in many ways. However, if every large stakeholder of global supply chains were to emulate Apple’s (and a few progressive other’s) supplier code of conduct programs, the world would be a better place.

Certainly organizations will play games with many public components of their brand. But I do believe we should laud efforts, when they are honest. Without a doubt Apple knows of “social responsibility” failure potential for their suppliers. Otherwise, they would not have the Code of Conduct and police conformance against it. Why do they do it?
Not altruism, in my opinion. Simply because, in part there is a risk to their brand if they didn’t do anything. How much money does Nike spend to "convince" consumers that they are trying hard to ensure their suppliers are not socially irresponsible?

Also because someone high enough at their corporate team believes it is the right thing to do.

I don’t think we should always dismiss such efforts as pure (empty) marketing campaigns.

[Jim Wynne]

Originally Posted by Sidney Vianna

Let me point the obvious: greed is part of human nature and won’t be eliminated from the world. Let me also remind us of how deplorable (by today’s standards) working and labor conditions were in factories in Europe and the rest of the “developed world” during the early stages of the Industrial Revolution. Things have changed quite dramatically since then.

What changed? Not the persistence of greed, certainly. What changed was regulation and enforcement. There is no sign of that happening in China at present. If Apple (or any other putatively altruistic company) were to resource their business without doing the due diligence they should have done in the first place, the same thing will happen. It might happen with due diligence being done.

Originally Posted by Sidney Vianna

Without a doubt, many communities in Asia and other parts of the world are benefiting from the globalization drive. While many others are worse off, in many ways. However, if every large stakeholder of global supply chains were to emulate Apple’s (and a few progressive other’s) supplier code of conduct programs, the world would be a better place.

But the sincerity of Apple's alleged efforts in this regard is in question, and rightfully so. The world won't be a better place in this regard until profits are actually at risk, and that won't happen without regulation.

Originally Posted by Sidney Vianna

Certainly organizations will play games with many public components of their brand. But I do believe we should laud efforts, when they are honest. Without a doubt Apple knows of “social responsibility” failure potential for their suppliers. Otherwise, they would not have the Code of Conduct and police conformance against it. Why do they do it?
Not altruism, in my opinion. Simply because, in part there is a risk to their brand if they didn’t do anything. How much money does Nike spend to "convince" consumers that they are trying hard to ensure their suppliers are not socially irresponsible?

Also because someone high enough at their corporate team believes it is the right thing to do.

I don’t think we should always dismiss such efforts as pure (empty) marketing campaigns.

I think it's a case of guilty until proven innocent, and history is on my side.

[Sidney Vianna]

Originally Posted by Jim Wynne

But the sincerity of Apple's alleged efforts in this regard is in question, and rightfully so. The world won't be a better place in this regard until profits are actually at risk, and that won't happen without regulation.

So, if the labor/environmental regulatory regime at a given country is still behind the levels of Apple's code of conduct, strict compliance with the local laws would mean a lower standard for the employees, compared to what Apple expects from the suppliers. Still, you seem to be saying that what Apple is doing is bad.

In connection with "due diligence", remember that organizations are dynamic and a lot can can change in a few years. A supplier that was "socially responsible" a few years ago, being faced with operating under a major recessionary background, might change their labor/environmental practices (for the worse) significantly.

[Jim Wynne]

Originally Posted by Sidney Vianna

So, if the labor/environmental regulatory regime at a given country is still behind the levels of Apple's code of conduct, strict compliance with the local laws would mean a lower standard for the employees, compared to what Apple expects from the suppliers. Still, you seem to be saying that what Apple is doing is bad.

No, I'm not saying that what Apple is doing is bad; I'm saying that I don't assume that they're doing anything "good." This isn't completely due to cynicism. Past performance of American industry in general leads me to be suspicious.

Originally Posted by Sidney Vianna

In connection with "due diligence", remember that organizations are dynamic and a lot can can change in a few years. A supplier that was "socially responsible" a few years ago, being faced with operating under a major recessionary background, might change their labor/environmental practices (for the worse) significantly.

Exactly. I don't know how that fact could be seen in favor of giving Apple the benefit of the doubt, though. Without regulation that has real teeth, anything can (and probably will) happen. So Apple threatening to cut off suppliers (and move to others in China) essentially means nothing.