Tuesday, July 30, 2013

Chinese labor rights group finds violations at Pegatron, just as company gains more Apple business

Pegatron is picking up the slack of production from Foxconn, but does that also mean the firm is picking up Foxconn's bad habits? A new report, issued Monday by China Labor Watch, a Chinese workers-rights group, alleges a number of labor abuses at the company.

Among the allegations are safety violations, withholding of worker identification cards, poor living conditions, environmental violations, and the withholding of worker pay. These would all violate not just Apple's Supplier Code of Conduct, but Chinese law.

For example, China Labor Watch reported that the workweek of Pegatron plant workers regularly exceeds 60 hours. Workers also complained that their wages were garnished by third-party recruiters if they didn't complete a fixed term of service. These recruiters are also sometimes failing to provide the legally mandated insurance that Pegatron says it is paying the recruiters to provide.

Pegatron said that
[...] work hours are within local regulations and we will do our best to meet customer requirements. For the past two months, work hours have been below 60 hours a week.

[It is] wrong for recruiting agencies to take part of workers' salaries even if they quit early, and we are investigating. We pay the recruiting agencies for the workers' social insurance, so it is illegal and a breach of our contract with them if they do not provide insurance for the workers. We conduct periodic audits of agencies to see if they are providing insurance and those not complying will be penalized.
China Labor Watch is the same labor rights group that has, in the past, detailed poor and even dangerous working conditions at Foxconn. Despite a New York Times report in January of last year that detailed poor factory conditions and more at Foxconn, Apple's primary Chinese manufacturing arm, CLW found in May of 2012 that worker abuse, including overbearing workloads, cramped dormitories, and humiliating disciplinary actions, were still "the norm."

This is despite that fact that, after the damning NYT article, Apple joined the Fair Labor Association (FLA), had it do an audit, and vowed -- along with Foxconn -- to make changes.

The new allegations come as Apple has been load-balancing its manufacturing by giving Pegatron more business. Pegatron already makes some iPhones and iPad Minis.

Pegatron is rumored to have been chosen to be the primary assembler of the so-called lower-cost iPhone expected to be unveiled later this year.

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