Why Other Electronics Companies Aren't Following Apple's Lead on Factory Audits

Apple's labor solution isn't perfect, but it's more than other tech companies are willing to do to improve factory workers' lives.


The electronics industry copies everything Apple does from its products' features to its marketing's feel. So, more than a month after Apple announced that it would tie-up with the controversial, corporation-friendly Fair Labor Association, it's a little bit surprising that not one other electronics-maker has even tried to sign on with the FLA. What gives? Bloomberg's Adam Satariano and Peter Burrows dug in to see if they could find out.

The answers to their quest should not surprise you. The companies do not want to give any even quasi-independent authority access to their supply chains. For all the real and legitimate criticism of the FLA, the reality is that they are a rock of something in a sea of nothing when it comes to labor protections for overseas workers. And gadget-makers want to maintain their freedom to operate in those open waters.

Some companies' spokespeople claimed that electronics companies didn't need the FLA because they have the Electronic Industry Citizenship Coalition, which carries out some of the duties that the FLA is supposed to. The EICC, however, is not exactly a real regulator. Instead, as Infiniera's CEO Tom Fallon put it, the EICC is "absolutely toothless." Fallon said, "I don't think they do meaningful work," and gave his reason why. There is no record of any manufacturing facility "losing business, permanently or temporarily, for failing to live up to the group's code of conduct."

Other companies say that they do their own internal audits, though nothing they turn up is ever made public and few look further down the supply chain at where the parts for their products come from. Microsoft, Dell, and Samsung all said they had internal procedures to check up on suppliers. HP's internal audits found "excessive working hours" at more than half of the factories the corporate social responsibility team sampled.

The last excuse Bloomberg found for electronics' firms not following Apple's lead was simply that Chinese workers do not want to not be exploited. Some executives claimed that young workers wanted to work extra-long weeks. A former head of Flextronics said that, particularly in the past decade, "Most Chinese workers at that point in time wanted as much overtime as they could get."

As usual, though, only the labor camp could say what is obvious to everyone who looks at the situation. Until the companies are willing to sacrifice a tiny bit of profit margin for better working conditions, nothing is going to happen.

And audits and factory inspections can only go so far. If technology companies are serious about improving conditions, they need to accept lower profit margins and slower production times, Worker Rights Consortium's [Scott] Nova said.

"As long as the company is not willing to demand change from suppliers, and adjust prices and delivery deadlines to implement that change, we're not going to see it," he said.

And right now, only Apple may feel that it has some profit margin to spare.

Image: Reuters. This photograph has been digitally manipulated.