Apple’s 2012 Supplier Responsibility Report has launched a discussion on the abuses in Apple’s supply chain, and how to go about remedying it. In many ways, the discussion is great because it interjects the all too hidden topic of Chinese working conditions into the mainstream. But at the same time, the challenge is to figure out how to improve conditions at Apple’s suppliers so that Chinese workers and Chinese society benefit in the long run.
A good recap of the debate can be found at the China Digital Times, and also, the New York Times has published a must-read piece that includes some candid observations from former Apple executives discussing the difficulties in pushing for better labour conditions in supplier factories.
At the heart of the dilemma is the tension between pushing for better labour conditions – which necessitates more money paid to suppliers and slower productions speeds – and the company’s desire to meet consumer demand in bringing out new products and keeping new ideas secret from competitors.
It seems to me, the labour movement, and all those who would like to see an improvement in workers’ rights, need to ask a few key questions.
First, how likely is it that Apple will gain the will power to overcome its internal dilemma, and wholeheartedly support an improvement in workers’ rights at the expense of its other interests? Second, even if Apple were to put extreme pressure on suppliers to improve their conditions, would suppliers in turn comply and improve conditions?
The answer to the first question will ultimately come down to whether or not consumers speak out and demand better labour conditions for the workers who make their products. With Apple sales setting tech records, and riots breaking out in China to buy Apple products, demand for Apple products seems almost limitless. Relying on consumer boycotts and consumer education to improve conditions is probably not going to succeed. Moreover, one may also ask, in the history of labour movement, when has a company voluntarily improved wages and conditions for workers? I could be wrong, but I don’t think there are many shining examples.
Does Apple have the power to improve working conditions? Here, there are conflicting opinions, as reported in the New York Times piece. On the one hand, as a former Apple executive noted, if half of the iPhones produced had problems, there is no way that those manufacturing problems would be allowed to endure for so long. But instead of giving suppliers the space and funds needed to improve conditions, according to the NYT piece, suppliers operate on only the thinnest of profit margins, and thus have a strong incentive to cut corners in every way possible in order to increase profits. In this sense, it would seem that sharing profits with suppliers could be one way in which Apple could improve working conditions. But then again, this voluntary step would fly against market dynamics, and there’s no guarantee that suppliers would pass on the benefits to the workers.
One also has to wonder how much leverage Apple has over some suppliers. For example, could an iPhone be produced today without some important large-scale suppliers, such as Foxconn? And if not, what incentive does Foxconn have to improve standards if they know full well that Apple’s entire business model relies upon them? In this sense, putting pressure on Apple to improve conditions at Foxconn may be a bit futile.
So, what is the solution? Admittedly, there are no easy answers. Undoubtedly, watchdog groups, CSR professionals and even Apple’s own compliance team all have important roles to play.
However, there is a danger in relying too much on pressuring Apple as a means to improve conditions. Ultimately, for real changes to be sustainable, they need to be rooted in China’s own laws and practices, and workers need to be involved. Some have argued that since the rule of law and enforcement is often weak in countries like China, extra-legal codes of conduct are actually better mechanisms for rights improvement. However, even though the rule of law is weak, and even though labour law implementation is problematic, it remains a fact that in the past few years workers have been increasingly using arbitration committees and the courts to redress their grievances. Moreover, a nascent workers' movement is starting to develop, grassroots workers rights groups are becoming more numerous, and strikes and collective actions are becoming more organized.
So, on the one hand, we have legally non-binding codes of conduct and voluntary top-down improvements. On the other hand, we have legal actions, collective action, and workers' organization. While these two options are not mutually exclusive, it seems to me that China (and other developing countries) would be better off if improvements in working conditions come about through a process that strengthens the rule of law and the power of workers.
Supporting the Workers’ Movement in China