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Pegatron caught off-guard by Apple audit news

updated 12:00 am EST, Tue February 14, 2012

Fair Labor Association will inspect facilities

Pegatron, a Taiwan-based manufacturer that helps makes Apple's iPhones as well as numerous electronics for other companies, said it had not been informed of any pending inspections of factory work conditions prior to announcements from Apple and the Fair Labor Association (FLA) that it would audit Pegatron and Quanta Computer this spring. The statement by Apple also confirmed that FLA inspections have already begun for its principle supplier Foxconn.

Bloomberg reports that the company is aware of Apple's supplier responsibility policies, according to Pegatron CFO Charles Lin, who was reached by telephone. Apple joined the Fair Labor Association about a month ago, becoming the first technology company to do so despite the fact that every major name in the technology and electronics market largely relies on the same suppliers and manufacturers that make Apple products. Quanta, also based in Taiwan and a supplier of iPod and notebook components, declined to comment on news of the FLA audits.

The inspections, which are voluntary, have so far met with no resistance from Apple suppliers, the group says. Pegatron recently suffered an explosion relating to aluminum dust buildup at one of its polishing facilities, similar to another incident involving the same material at a Foxconn factory. Apple has reportedly asked Pegatron to disassociate itself from MacBook Air clones called Zenbooks being produced by ASUS, which it has reportedly done.

When the New York Times reprinted an article in Chinese media critical of Apple's pace in improving worker conditions at Foxconn's factoriesa, the newspaper received an unexpected backlash from workers in China who pointed out that while Foxconn conditions may seem harsh by Western standards, they are in fact one of the best manufacturing employers in the country. Conditions in rural China -- and at many of the other component and technology manufacturing companies in China and Taiwan -- are actually worse, they said.

Apple has reported slow but steady progress on improving conditions at its suppliers' facilities, and is often the original source of problem reports such as catching underage workers. Despite the publicity about worker suicides at Foxconn facilities (which suffered a rash of incidents in 2010), the suicide rate at Foxconn is dramatically lower than that of the general population by comparison. Foxconn workers also suffer fewer workplace accidents than even US manufacturing workers, and average nearly 25 percent more than the median wage in China.

Apple and specifically CEO Tim Cook have said that the company cares about all the workers associated with its products but has difficulty affecting reforms in China without government enforcement. China sees cheap manufacturing as a way out of chronic poverty and is disinclined to overly regulate job-creating businesses or raise living standards beyond what it can support, fearful that if the cost of manufacturing rises too quickly the Western companies will just go elsewhere for labor. [Graphic via John Chow]

By Electronista Staff
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