An annual audit conducted by Apple Inc. of its contractual suppliers located around the world found multiple labour and environmental violations. Three suppliers had used under-aged labour, Apple Inc. said.
Priding itself for its social responsibility, Apple Inc. regularly reviews the operations of its suppliers and reports on findings in its annual Supplier Responsibility Progress Report. The 2010 report revealed three Apple Inc. suppliers used under-age labour to make Apple computers, iPhones and the iPod. Many other violations were also recorded.
According to the report, 44 suppliers did not "... complete environmental impact assessment(s)" and an additional "... 11 facilities did not have permits for air emissions, and four others did not meet the operating conditions specified in the permit for air emissions. We required these facilities to obtain permits and to communicate procedures for adhering to the conditions of the permits."
Apple also found that many of its suppliers practiced hiring discrimination and did not provide proper training for employees. The company found many instances of occupational safety violations; such as employees operating machinery they weren't licenced control, and the failure of many factory owners to provide their employees with adequate safety equipment.
Most of the violations of Apple's Code of Conduct involved employees. There was wide scale documentation of employers shortchanging employees on pay and benefits. Apple said "... At 48 of the facilities audited, we found that overtime wages had been calculated improperly, resulting in underpayment of overtime wages. At 24 facilities, our auditors found that workers had been paid less than minimum wage for regular working hours. In most of these cases, the facility’s pay structure for regular hours depended on attendance-related bonuses to meet minimum wage requirements; without these bonuses, there was no guarantee that the minimum wage would be met. We also found 15 facilities where the facility’s pay structure was unnecessarily complex and could result in underpayment of wages ... Another common violation we found was underpayment of legally required benefits. We found 57 facilities with deficient payments in worker benefits, such as sick leave, maternity leave, or social insurance for retirement .. Audits also revealed 45 facilities where wage deductions were used for disciplinary purposes."
In the instances of underage labour, Apple said three of its suppliers had hired a total of eleven youths aged 15, violating national labour laws which stipulated 16 as the minimum age. None of the facilities, which have not been named, will suffer any repercussions, although they have been asked to enact more stringent controls.
In all cases, Apple has required their suppliers to correct the situation. Apple severed ties with one supplier which had consistently falsified its employee records.
Apple did not state how many suppliers it has. Suppliers are required to uphold a Supplier Code of Conduct. Apple's suppliers are located in the United States, Taiwan, Malaysia, Thailand, China, Singapore, The Czech Republic, and the Philippines.