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Hong Kong-based labor watchdog Student & Scholars Against Corporate Misbehaviour released a report on Tuesday that criticizes Apple for failing to properly monitor the labor practices of its suppliers. Despite performing a 72-percent increase over the number of audits it performed in 2011 following FLA audits, SACOM’s report claimed interviews with 130 workers from three Apple suppliers showed the company is failing to meet basic humane labor practices.
…to make sure workers meet the daily production targets, Apple suppliers resort to inhumane labor practices, even to the extent of denying workers’ basic human needs, such as allowing bathroom breaks, sufficient rest, and access to proper nutrition; these conditions partly contribute to the high labor turnover rate. Increasingly, Apple suppliers use student workers from vocational schools from all over China, under the guise of “student internships”… There is a rise in using student interns. Apple suppliers collaborate with vocational training institutions which require students to join a supplementary workforce for the factories, depriving students’ right to a quality education.
“We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made.”She also said that the suppliers must live up to these requirements if they want to keep doing business with Apple.
Apple released its annual Supplier Responsibility Report earlier this year to report 393 audits performed during 2012, and the company promised to sever ties with suppliers and hiring agencies that purposely hire underage workers. Apple also said its worker empowerment program providing education on local laws and supplier code of conduct was extended to 1.3 million employees during 2012. That’s double the amount of workers trained in the program since 2008.
A breakdown of the claims presented in SACOM’s report is below, and you can check out the full report for yourself here.
1. At all the factories investigated, the majority of workers- nearly 80% – are precariousworkers who are more vulnerable to labor rights violations.
2. There is a rise in using student interns. Apple suppliers collaborate with vocational training institutions which require students to join a supplementary workforce for the factories, depriving students’ right to a quality education.
3. Excessive long working hours are observed in the suppliers’ factories, especially during peak production seasons. Overtime work might take up to 4 hours a day, yielding work days as much as 14 hours and workers could only have 1-2 days off for the entire 3-month period. This means during this period work weeks of 70-100 were common, far in excess of that required by Chinese law (about 49 hours) or the standard set by Apple (typically 60 hours per week).
4. From our investigations, there are many instances of unpaid work, imposed through mechanisms such as cutting meal times, requiring workers to arrive to the factory before their official work hour for work meetings, making workers wait in long lines to swipe the time cards, and requiring workers to wear burdensome dust-free uniforms that are time consuming to put on and take off. The most severe complaint of the workers was in regard to unpaid overtime, as they are forced to stay in the factory’s unit until they have met the high production quotas assigned.
5. The long working hours, unachievable production quotas, and alleged unpaid overtime work has driven workers from Apple suppliers and accelerated the turnover rate, which in turn, has compelled Apple suppliers to depend heavily on labor agencies to recruit an increasing number of dispatch workers (in one case, a labor agency recruited up to 1000 workers a day). In addition, dispatch labor is deprived of the benefits that regular, full-time workers are entitled to. Overall, labor conditions are deteriorating, both for regular workers and dispatch workers.
6. Apple suppliers employ chemicals in the production process that are potentially harmful to workers. The research found that workers are not informed of the potential harms, and there is inadequate protective equipment. Excessive noise, dust, and potent chemicals put workers’ lives at risk. Our investigations show that the supplier Pegatron factory in Shanghai, one year after the explosion in December 2011, the case polishing unit has not improved the ventilation and the working environment remains very dusty.
7. There is an intensification of military- style management in Apple suppliers. They employ measures that deter workers from using toilets and cut meal times to coerce workers to meet high production quotas. Workers also suffer verbal abuse from frontline supervisors and are humiliated in front of other workers. Moreover, to discipline workers, there is a wide range of arbitrary punitive fines imposed on them. Workers are intimidated and told to keep silent, with threats that their wages will be cut. These various punitive measures have led to increasing antagonism toward shop floor supervisors. We found scarce evidence of management’s attempts to improve this situation; on the contrary, the influx of new workers and rapid turnover of the work force have exacerbated management-worker relations.
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Apple CEO Tim Cook has said that he doesn’t think it likely that the Chinese government will target the iPhone maker in retaliation for Trump administration policies.
The US has imposed 25% tariffs on many products imported from China, and Trump has threatened to extend this to all Chinese imports …
Some Apple accessories are already taxed at 25%, and Trump’s threat would see all Apple products made in China and sold in the US hit by the tariff – resulting in either steep price increases or reduced profitability for the company.
The White House also put Chinese giant Huawei on an export blacklist, which the company says is not justified. Huawei has close links to the Chinese government.Analyst concerns
Analysts have expressed concern about two risks to Apple if the trade war escalates. First, a growing consumer boycott of Apple products in China, with some iPhone owners saying they will switch to Huawei in protest at the US action. Citi recently suggested that this could see iPhone sales in China fall by as much as 50%.
The US trade war with China will provoke Chinese citizens to turn away from Apple and buy domestic mobile brands instead, according to an analyst note […]
The analysts predicted that Apple’s brand is already being damaged in China and that this is a recent deterioration. According to their calculations, China accounts for 18% of all Apple sales, but that figure could halve thanks to the trade war.
The second risk is the Chinese government targeting Apple as a proxy for the US. Goldman Sachs said that the worst-case scenario would be a ban on iPhone sales in China, which would reduce Apple’s global profits by 29%.
“Investors have been asking us about Apple’s financial exposure to China given the possibility of a ban on Apple’s products there in retaliation for the US license requirements for Huawei that were announced last Friday,” wrote Goldman Sachs analyst Rod Hall in the research note […]
Apple’s profits would plunge by almost 30% if China enacts a total ban on the company’s products, according to Goldman Sachs. The dollar amount would be a reduction in net income by over $15 billion annually.Tim Cook sanguine
Cook, however, doesn’t consider this likely, reports CNET.
“The Chinese have not targeted Apple at all, and I don’t anticipate that happening, to be honest,” Cook said in an interview with CBS News, conceding that a tariff on the iPhone would hurt sales of the smartphone.
“I’m hoping that doesn’t happen,” he said in the interview. “The truth is, the iPhone is made everywhere. It’s made everywhere. And so, a tariff on the iPhone would hurt all of those countries, but the one that would be hurt the most is this one” […]
Cook went on to say he’s “proud” to engage regularly with the White House, noting that keeping the lines of communications open helps solve problems.
“I don’t believe in the ‘I disagree with you, and so I don’t want to have anything to do with you,’” he said. “The way you stop the polarization is to talk. This is sort of like step one. And I don’t want to be part of the problem — I want to be part of the solution.”
Cook characterized his discussions with Trump as fairly straightforward, with a lot of back and forth.
Apple’s CEO may be taking an optimistic view, but he has a legal responsibility to disclose risks to the company’s financial prospects, so his statement can certainly be taken to mean that there has as yet been no direct indication from China that it is considering any action against the company.
Cook also discussed privacy during the interview.
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The fast pace of technology, changing work titles and the increasing productivity expectations of today’s workplace are stressful. Rapid change can cause fear, anxiety and depression.
Transcendental Meditation (TM) techniques are one way to provide substantial mental and physical health benefits to you and your employees. Meditation can keep the mind clear, aid in physical immunity, increase productivity and encourage a positive outlook.
Besides that TM has few rules to be successful, is simple and cost-effective to incorporate into the workplace. In just 10 to 15 minutes a day, meditation can improve collaboration, resilience and overall health.The negative effects of stress
While stress is often thought to be an external problem in the workplace itself, it is, in fact, an internal impression, or imbalance, left in physiology. It results from our interpretation of, and consequent response to, challenging events, not the event itself. Stress is why two people can react in different ways to the same situation.
The stress response is our evolutionary survival mechanism, a physiological reaction that occurs in response to a perceived threat, preparing our bodies to react quickly. As a result, stress hormones, including cortisol and adrenaline, are secreted, temporarily changing the whole body’s functioning. For example, stored glucose and fats are released for energy, heart rate increases, blood pressure rises, muscles tense, and oxygen consumption increases. In addition, other processes not needed at that time are suppressed, such as digestion and cellular repair.
Effects in the brain cause heightened emotional responses and reduced decision-making processes. For instance, suppose we face a high demand or challenge without allowing the body adequate rest and recovery time. In that case, these temporary imbalances can become prolonged and sustained, affecting our health, well-being and functioning.
Stress impacts company productivity as well as an individual’s well-being. It is a misunderstanding when people claim to need stress to keep them motivated and to meet demands, targets and deadlines. While the challenge is good, residual imbalance from our stress response is not.
Stress becomes a self-perpetuating cycle: Accumulated tension in the body means we are more likely to perceive subsequent events in a threatening way. In turn, this increases the activation of the stress response. And so on.How meditation helps employees to cope with stress
Mindfulness techniques are increasingly being used to help people cope. With this the mind is trained to be in the present moment rather than caught up in the past or future.
As a meditation practice, mindfulness is a step in the right direction. Still, by progressing to a more profound meditation technique, such as Transcendental Meditation, more significant physiological benefits can be experienced.
TM gives the body intense rest, much deeper than sleep. Meditation has been called by scientists a “restructuring state” because it produces physiological reactions precisely opposite to those of the stress state. There is a great deal of scientific and anecdotal evidence about the benefits of TM.
Meditation is considered a mind and body practice. If meditation isn’t working for you, consider an alternative such as yoga, acupuncture, tai chi, massage therapy, relaxation techniques or spinal manipulation. All have been found to improve a variety of health conditions.
According to Additude magazine, those diagnosed with ADHD can benefit from meditation. Although meditation techniques may differ from those without the diagnosis, learning to develop inner skills can help with self-observation, increasing attention span and the ability to cope with everyday stressful experiences.Physical health
Having team members who have good attendance can decrease turnover and improve collaboration. By incorporating meditation, team members can activate brain areas that strengthen the immune system.Creativity
Taking the time to meditate allows the mind to calm and permits it to wander. Allowing yourself a few minutes to shut off the lights, close your eyes and visualize challenges can help you develop creative solutions. These solutions may lead to innovations or ideas that you may have been too stressed to release.Happiness
Having a calm mood at work can be challenging, especially if the environment is fast-paced or in a state of constant change.
Meditation techniques can reduce mood swings by providing employees with a way of keeping their emotions in check. By neutralizing shifts in stress and anxiety, workers will be happier and more productive.
Employers might consider scheduling a daily meditation. Frequent reflections can help increase patience and might help employees be more satisfied with their work.
Did You Know?
While meditation has been linked to increased empathy and compassion, new studies from California State University find that regular meditation practice could reduce prejudice.
Work Together to Complete a “Social Revolution,” Says Baccalaureate Speaker MIT’s Hopkins tells packed Marsh Chapel crowd to strive for equal opportunity, justice
Molecular biologist Nancy Hopkins, the Amgen, Inc., Professor of Biology at the Massachusetts Institute of Technology, recalled personal trials as a female scientist and challenged graduates to overcome invisible barriers in an inspiring Baccalaureate Address to the Class of 2014 at Marsh Chapel Sunday morning.
She mentioned some of the great breakthroughs of the last 50 years: the internet, the Higgs particle, and notably, the “discovery of unconscious biases and the extent to which stereotypes about gender, race, sexual orientation, socioeconomic status, and age deprive people of equal opportunity in the workplace and equal justice in society.”
Hopkins was later awarded an honorary Doctor of Science at BU’s 141st Commencement.
She spoke before a packed audience at Marsh Chapel and was enthusiastically applauded for her remarks. President Robert A. Brown, University Provost Jean Morrison, Marsh Chapel Dean Robert Hill, and Emma Rehard (CAS’14) also addressed the graduates and their families. Scott Allen Jarrett (CFA’99,’08), director of music at Marsh Chapel, led the Marsh Chapel Choir in “Clarissima” and “For the Beauty of the Earth.”
Early in her career, Hopkins worked in the lab of James Watson, the codiscoverer of the structure of DNA. She earned a PhD at Harvard and became a faculty member at MIT, working at the Center for Cancer Research. There, she focused her research on RNA tumor viruses, then considered to be a likely cause for many cancers in humans. Hopkins also studied developmental genetics in zebra fish, and helped to design the first successful method for making insertional mutagenesis work in a vertebrate model. That accomplishment enabled her team to identify genes essential for zebra fish development, with implications for better understanding development in other species.
Hopkins cited research by psychologists “who documented the irrationality of our brains, and our inability to make accurate judgments of even simple numerical facts if the conclusions contradict our unconscious biases.
“You can demonstrate gender bias,” she said, “simply by making copies of a research article, putting a man’s name on half the copies and a woman’s on the other half, and sending the two versions out for review: reviewers judge the identical work to be better if they believe it was done by a man. Surprisingly, it doesn’t matter if the reviewers are men or women.”
For years, Hopkins said, she avoided calling attention to the problem, for fear of being accused of whining. Then on a whim, in 1994 she measured all of the labs in her building at MIT and found that female scientists had less lab space than male colleagues. She needed more quantitative data and discovered that only 8 percent of MIT’s science faculty were women (Harvard and BU had similar statistics). At MIT, her findings led to a university-wide examination of possible gender bias against women scientists.
“We learned that the unconscious undervaluation of women’s work can cause women of equal accomplishment not to be hired, and cause women who are hired to receive fewer resources for their research,” she said. “The women were marginalized. No wonder there were still so few women science professors 20 years ago. More amazing was that the ones who were there were so successful.”
When the results were published in 1999, Hopkins started receiving emails from women around the world writing that they had experienced the same problems. Hopkins was named cochair, along with BU President Robert A. Brown, then MIT provost, of MIT’s first Council on Faculty Diversity. MIT went on to write new family leave policies, and in 2001, the school’s new computer science building was designed to include a large day-care center. Today, many junior women faculty at MIT have children, proving they can be both scientists and mothers, said Hopkins, who famously walked out of a 2005 speech by Lawrence Summers, then president of Harvard, when he suggested that “intrinsic aptitude” might explain why there were relatively few high-achieving women in engineering fields.
In her parting words, Hopkins told the graduates that while they should first care about finding work they love, men and women must work together to complete a social revolution.
“If you look around and see that the people you work or study with all look like you, you’ll know something’s wrong, and work to change it,” she said. “Completing this revolution won’t happen by the passage of time, but because you make it happen.”
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There is a common saying among expats in China – particularly longtime “China Hands” – that goes like this: The more time you spend in China, the less you understand it. So it’s with this in mind that we try and break down exactly what’s going wrong for Apple in China these days, likely a confluence of factors from politics and economics to nationalism and a rapidly changing consumer market. There’s no easy answer.
People have begun wondering what’s wrong following a few worrying signs: Apple announced a severe slowdown in iPhone sales in China on its recent earnings call, a new report by IDC confirmed a concerning tumble in iPhone sales, and Apple’s uncharacteristic decision to cut prices on the latest model phones sold at some of China’s largest retailers. These don’t seem like moves that would be made by a strong, confident company.
So what’s wrong in China? Let’s dig in.Competition
Let’s face it, competition in the technology realm is fierce in China. If you haven’t been there, it’s hard to understand the dizzying speed at which innovation happens — and the willingness of even older people to become early adopters.
While the country claims to have a 5,000-year unbroken civilization, this current era of innovation and optimism has made people hungry for anything “new”. In the early days of smartphone sales, Apple had cachet, but with a perceived slow development cycle there’s a lot more interest in Huawei phones, in particular. Huawei is a national champion that manufactures high-quality phones at nearly half the cost (take a look at some of the photos taken with the P20).
Chinese manufacturers also create phones tailored for the Chinese market, with dual-SIM slots (now finally available on some iPhone models), local GPS providers, and popular selfie apps that are way over-modulated for western tastes. (If you want to see what I mean, download Tantan, China’s answer to Tinder).
Even foreigners I meet on this side of the world love their Huawei phones, concerns over spying excepted.
Of course, comparing specs is important in China, but isn’t enough to move the needle in Huawei’s favor on its own. That requires…Economics
China is a big country, with a lot of people — 1.4 billion of them, roughly. But while media attention showers the country in praise for its perceived riches, the truth is the vast majority of the people in China remain poor. The per-capita GDP of the USA is nearly $60,000, but only $8,800 in China, on par with places like Lebanon and Cuba and just slightly above Botswana. Sure, people in China aspire to own nice things, but without a social safety net, a savings account becomes a do-or-die necessity.
A massive wealth gap, though, still leaves millions of wealthy people in the eastern cities of Beijing, Shanghai, Guangzhou, Shenzhen, and others, who don’t hide their ability to pay whatever Apple asks. But even with them, doubt is setting in, partially driven by…Culture / Nationalism
This is a hard one to explain without ruffling a few feathers, but let’s just say that the cultural divide between the United States and China is probably so much more vast than most people realize. From top to bottom, inside and out, from belief systems to decision-making, everything about China is different.
Adding to that is an authoritarian government that has long stoked nationalist tendencies through propaganda delivered over the country’s television, radio and internet airwaves, which it directly controls. If China, or its people, feel attacked or treated unfairly, there is plenty of evidence showing that large-scale boycotts of foreign brands have worked.
Most recently, after a private conversation featuring Dolce & Gabbana founder Stefano Gabbana making disparaging remarks about China leaked, several flagship shops were forced to close and events canceled.
Then there was the boycott against South Korean companies after South Korea said it would work with the US on a missile defense system. From a Forbes article in 2023:
Much of the wrath has targeted Lotte, a Korean conglomerate that will swap land to allow installation of the anti-missile system. Supposed failure of regulatory inspections suddenly prompted the closure of 55 Lotte stores, about half the total in China. Chinese have also quit arriving South Korea on tours. About 3,300 tourists wouldn’t leave a cruise ship that arrived Saturday at the South Korean resort island of Jeju. Korean pop concerts once popular in China are off the marquees.
Lotte is, loosely speaking, similar to Walmart, and the closure of 55 stores dealt a blow to their revenue. There are many, many more examples of this, even against American companies. Some protests are genuinely spontaneous (like the Dolce & Gabbana one), but the government-led ones pack the most punch. China’s government has enormous power to influence buying decisions, particularly if it frames certain companies as anti-China.
Apple isn’t an official target yet, but it’s treading awfully close. I already have anecdotal reports that some Chinese companies are frowning upon staff still using iPhones, and people are ditching them for Chinese-branded smartphones. A combination of trade war rhetoric, cheaper/better models produced by Chinese companies, and general distaste for anything seen as “yesterday’s hit” is a real factor that will affect Apple’s future in the country.
If the trade war intensifies, Apple is a massive target for China — the country still contributed $13.17 billion to Apple’s coffers in the last quarter and is also where the majority of its products are manufactured — making the company particularly vulnerable compared to its peers. The precipitous drop of nearly $5 billion in China revenue last quarter was without any official call to boycott Apple products. This could get worse before it gets better.
With so few ways to really stand out, one key differentiator is the choice of mobile phone. But for years now, the iPhone hasn’t really undergone any large physical design changes that would be noticeable to others, aside from maybe the introduction of the notch with the iPhone X in 2023. I personally don’t think Apple should change the look and feel of the phone just for change’s sake, but it’s true that in China, people want the newest and most cutting-edge — so they can show it off. The go-it-slow approach to innovation and continual tweaks to improve the user experience just aren’t sexy enough for some of the country’s highest earners and biggest influencers.WeChat
A unique quirk in China’s mobile phone industry is the dominance of WeChat, which has become the de facto operating system for Chinese users. I wrote a piece looking at how WeChat works and why it’s so popular earlier, but the reliance on this single app, which works well on both Android and iOS, makes the choice of operating system much less important and removes Apple’s normal “stickiness”. It, alone, makes the Chinese smartphone market unique.So what’s next?
It’s very difficult to put one’s finger on a single statistic, or one element of the Chinese economy, to explain Apple’s decline. A concoction of all of the reasons above create a toxic brew that Apple is now confronting — and that’s without taking into consideration other macro-economic trends like China’s slowing economy and devaluation of its currency.
Make no mistake: Apple has been one of the most successful US companies operating in China to date, but its long-term success there is far from secure. There could be some even bumpier days ahead.
Photo: The Observer
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Shipments of devices based on Apple’s Mac OS and iOS will close the gap on those of products running all flavors of Windows over the next two years, but Windows will then start to pull away again, according to figures from Gartner.
Last year, shipments of products running Windows outnumbered those running Mac OS and iOS, by 347 million to 213 million, Gartner said Monday. Windows’ lead will be slashed to 23 million devices in 2014, but will then begin to widen again.
By 2023, the latest date of the forecast, devices running Windows OSes will be outshipping those running Apple OSes by 45 million, Gartner said.
There are two main contributing factors to Windows retaining its lead, said Carolina Milanesi, research vice president at Gartner: phones and “ultramobile” PCs, or lightweight laptops running Windows.
“Phones will grow in volume from 2014. Ultramobile will also grow in volume as thin-and-light and hybrids become the norm,” said Milanesi. “Apple will remain one vendor with a relatively high price point, versus Microsoft having the support of many vendors at different price points.”
Despite the slight resurgence of Windows, its lead over Apple OSes in 2023 will still be much narrower than the lead it had in 2012.
Milanesi noted the figures do not take account of the impact a cheaper iPhone would have on the Apple OS market share. Numerous reports have said Apple is planning a cheaper iPhone but the company has yet to announce plans for such a device.Android out in front
The battle between Apple and Microsoft will take place in the shadows of Google’s Android, which will lead the market in terms of shipments.
Android is already the number-one computing platform on new devices, having shipped on just over half a billion devices in 2012, versus 559 million for Apple and Windows combined. This year, Android is expected to ship on 867 million devices, while the combined total of Apple and Windows products will hit 636 million, according to Gartner’s predictions.
Android device shipments will rise to over a billion in 2014, said Gartner.
The surge in Android comes as a result of the popularity of smartphones and tablets.
Gartner expects tablet shipments to jump from 120 million last year to 202 million this year and 276 million in 2014. Smartphone shipments over the same period are expected to rise from 1.7 billion to 1.9 billion.
Meanwhile, sales of PCs will continue to fall over the next two years as tablets and ultramobiles hybrid PCs attract consumers and business customers. Gartner said it expects sales of desktop and notebook PCs to fall almost 11 percent this year and 5 percent next year, largely due to weakening sales of laptops.
Ultramobile computers that are thinner and lighter than traditional notebooks, that often have a touchscreen, and that often can be transformed into a tablet form factor, will find favor with business users, said Milanesi.
“For enterprise users, it cuts down on the number of devices they need to run,” she said.
Overall, the device market will rise from 2.2 billion devices sold last year to 2.3 billion this year and 2.5 billion in 2014, according to Gartner estimates.
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