A report issued last week raised serious concerns about the working conditions at the Chinese factories of Apple supplier Foxconn. It followed a long period of campaigning by people and groups alarmed at the apparent conditions.
The investigation, by the Fair Labor Association (FLA), found poor working conditions and abuse of employees, leading Foxconn to pledge to make improvements. It revealed compensation issues, health and safety risks, and other problems that have led to a "sense of unsafe working conditions among workers".
The report, which in places issues a strong condemnation of the Foxconn business, may be seen as a victory for the campaigners and a sign that Apple is prepared to be more transparent about what happens in its supply chain. But experts say that the proof of its effectiveness will be measured by the action taken by Foxconn and Apple to rectify the problems.
Prior to the report's publication, anti-sweatshop campaigners spoke to ComputerworldUK, to express their worry that corporate funding of the FLA meant the exercise could be a whitewash – and would not necessarily result in any change.
Apple's decision to send inspectors to Shenzhen city, a vast complex run by electronics manufacturer Foxconn employing 230,000 workers, came in the wake of a damning New York Times report that contained allegations of mistreatment of workers and fatal industrial accidents.
The exposé had piled pressure on Apple to tackle the poor labour record in its supply chain and followed a spate of 14 suicides in 16 months at factories run by Foxconn, the main manufacturer of iPhones and iPads. The phenomenon was brought to light by the grimly surreal pictures of suspended nets designed to catch people jumping off buildings.
This prompted Apple to become the first technology company to sign up to the FLA, a US-based not-for-profit, labour standards monitoring body. This meant allowing an independent assessment of its supply chain and followed the disclosure in January of all of its 156 suppliers.
But Apple's decision to engage the FLA prompted campaigners and labour organisations to question the 'independence' of the organisation, because of its financial relationship with the companies it monitors.
Founded in 1999 on the back of an anti-sweatshop initiative, the FLA describes its mission as promoting and protecting workers' rights and improving working conditions globally. It boasts a broad coalition of supporters including 'socially responsible companies', universities and civil society organisations and claims to have helped improve the lives of millions of workers.
Participating companies, which include global brands such as Adidas, H&M, Nestle, Nike and Puma, voluntarily adhere to the FLA's code of conduct, which is based on international labour norms. This includes a commitment to implement monitoring systems and to remedy violations. Around 4,500 facilities fall under the FLA's supervision worldwide and it conducts 150 unannounced visits each year.
The FLA's supporters argue that it is a progressive response that holds major corporations to account and that can get them to drive change – rather than have it imposed from above. Getting larger companies to act, the argument goes, leads to raised standards across the board.
Critics are not convinced. They paint the FLA as corporate front whose operations often masks the real state of affairs.
The crux of their claim is that Apple and other participating companies are the FLA's principle donors, and that this creates a conflict of interest. This came to the fore through US TV station ABC which in February reported that in addition to the $250,000 it already pays to the FLA, Apple will fork out a "six figure" sum for the inspections, while others claim that Apple is likely to be the FLA's largest funder.
When contacted before the report's publication, Apple declined to comment on its alleged funding of the FLA, although it is now stating it will take action. Spokesperson Tanya Ridd said that the company had made strides, pointing out that it had increased its own internal supply chain audits by 80 per cent. She said: "As the first technology company to be admitted to the Fair Labor Association, Apple is setting a new standard in transparency and oversight".
The FLA said before the report's publication that the investigation would be 'fair, thorough and independent', but refused to be drawn on the nature of its financial relationship with Apple.
But the FLA's charter shows that participating companies are liable to pay fees, stating that "the long-term economic viability of the Association shall depend on funding from Participating Companies". This is corroborated by its tax returns for 2010, which show that 95 per cent of its $4.35m income was generated by 'program service revenues' – translating as fees for audits.
Could this system of payments endanger its impartiality? Roger Blanpain, professor of labour law and industrial relations at the Catholic University of Leuven in Belgium, is categorical: "If they are on the payroll, they are not independent".
The FLA's track record has come under fire in recent years, with labour organisations accusing it both of ineffectiveness and towing the line of employers.
A case in point is the Jerzees de Honduras textile factory in Honduras, which activists say was illegally closed in an anti-union manoeuvre by Russell Athletic in 2009. In its report, the FLA noted violations of the right to organise and made recommendations including the rehiring of workers at a new planned factory and providing assistance to those made redundant.
For employees' representatives this was too little too late. They say the FLA not only defended the company's actions - by saying the closure was justified on business grounds - but that it also actively undermined the role of the trade union in defending its members' interests. They allege the FLA 'made fun of' the union's collective bargaining proposal and revealed to the employer the identities of workers who had agreed to give confidential testimony as part of the inspection.
Moises Elisas Montoya, union president at the plant, said: "The FLA did not defend the rights of [workers at the factory] ... to the contrary, their position caused great damage. We cannot express how disheartening the FLA's actions were for our [members]".
On a broader level the FLA's latest inspections fit into a "well-established auditing industry in China", says Geoff Crothall of the China Labour Bulletin, a workers' advocacy group.
He explains that many companies provide inspection services to multinationals wishing to assess supplier factory compliance but he doubts whether they give a truly transparent evaluation.
"None of these organisations are particularly credible," he says. "Supplier factories are well versed in dealing with inspections and make sure they put on a good show whenever the auditors are in town. Exactly the same thing happened when the FLA went to Foxconn in Shenzhen. All the workers knew a week in advance and were told to tidy up their dorms and be on their best behavior."
Richard Parker, MD of technology PR agency, EML Wildfire, is cautiously positive though:
"Apple has been really smart with this - it has used a soft touch and actually addressed it more directly than it tends to with topics.
While the image makeover has worked, he agrees, the proof of the pudding will be in the eating.
"Between the Supplier Responsibility section of its site and (Apple CEO) Tim Cook's explicit comments on the issue, there's just enough out there to give the impression of transparency and a commitment to solving the problem. Now the hard bit comes in addressing the true challenge and ensuring the results speak for themselves."
It is clear the debate is far from over. Scott Nova, executive director of Workers Rights Consortium, a not-for-profit labour-rights monitoring organisation, casts doubts on Apple's motives, writing that the move displays a "public relations overdrive, frantic to protect its once pristine corporate image".
FLA's Chief Executive Auret van Heerdan fuelled cynicism with comments before the completion of the FLA investigation that facilities in the Foxconn facilities are "first-class" and "way above the average". This is contradicted other accounts and seems to fly in the face of the spate of suicides at Foxconn..
Hong Kong advocacy group Students and Scholars Against Corporate Misbehaviour, in a 2011 investigation revealed "sham internships" whereby tens of thousands of Chinese students are allegedly forced to work in Foxconn plants. They slammed the practice as "involuntary labour" which has no relevance to their studies.
Whether the FLA is simply a corporate-funded pressure valve, as activists claim, will now be put to the test. The organisation has forced a commitment out of Foxconn to end violations of their 60-hour working week limit. In turn the FLA is to conduct a cost of living study to 'assist Foxconn in determining whether worker salaries meet basic needs'.
However on this point, labour rights campaigners are adamant that a fair pay settlement can only be achieved through negotiation with an independent workers organizations at the plants – which the FLA admits does not exist. If the waves of industrial unrest in China over the last year are anything to go by, then the economic aspirations of a people who see the fruits of development kept outside their grasp are not going to be easily extinguished. With the world now looking in, the FLA will be under intense pressure to deliver pay proposals that satisfy the workers.
The reaction of Apple - and the other IT hardware giants - that use Foxconn manufacturing facilities, will be important. If the IT industry cannot provide its manufacturing workforce with safe work conditions, then Apple and others are likely to face both disruption in their supply chains and possibly the sort of bad, though not permanently damaging publicity faced by Nike, for example, over its use of child labour.