Foxconn Promises More Pay And Improved Working Conditions After Scathing Report

Apple's main supplier - Foxconn - has pledged to increase wages and improve working conditions at its factories in China after a highly critical report from the Fair Labour Association.

Apple agreed to join the association after a string of suicides at Foxconn factories and allegations of under-age workers and excessive working hours. The FLA has produced a report after a team of investigators inspected 15 Foxconn plants.

The report says Foxconn is breaking China's labour laws with employees working more than 11 days in a row. It also found widespread safety hazards in plants.

The team of inspectors said they gave the company "the equivalent of a full-body scan" by surveying more than 35,000 of the company's 1.3 million workers. Around 43 per cent said they had seen or been involved accidents in factory accidents and nearly two thirds said they were unable to live off of their salaries.

The report described workers as "largely alienated" from the management and that, while wages were in general above the Chinese average, more than one in 10 was not being paid fairly for the amount of overtime they were working.

“There’s this lingering sense among workers that they’re in a dangerous place,” Auret van Heerden, president and chief executive of the FLA told the New York Times.

In an attempt to pre-empt the criticism that will inevitably follow the FLA report, Foxconn yesterday announced that it would cut workers hours to a maximum of 49 a week without cutting their pay - effectively promising a significant pay rise.

Apple said in a statement: "We think empowering workers and helping them understand their rights is essential. Our team has been working for years to educate workers, improve conditions and make Apple’s supply chain a model for the industry, which is why we asked the FLA to conduct these audits."

Foxconn, which also produces electronic parts for Dell, Amazon, HP and a host of other technology firms, is China's largest private employer and its pledged changes are likely to send ripples throughout the entire Chinese manufacturing sector.

If it meets its pledge to improve conditions by the summer of 2013, as mandated by the FLA report, then the costs of its operations in China are likely to rise by hundreds of millions of dollars and other manufacturers may be forced to follow suit.

It remains unclear how much of the extra cost Apple would pass on to customers, because even after the changes, labour will only makes up a relatively small share of the expense of manufacturing its devices.

However, Meg Whitman, the chief executive of Hewlett-Packard, the world's biggest PC maker, said last month that "if Foxconn's labor cost goes up ... that will be an industry-wide phenomenon and then we have to decide how much do we pass on to our customers versus how much cost do we absorb."

Here's a link to the full report.
(Via: Telegraph)