Apple Approves Foxconn Investigation: Why Tim Cook Deserves Credit

on February 13 2012 12:24 PM
Apple announced on Monday that the Fair Labor Association has begun its independent audit of Foxconn's factories. It was a necessary move, but it would never have happened without CEO Tim Cook at the helm.
Apple announced on Monday that the Fair Labor Association has begun its independent audit of Foxconn's factories. It was a necessary move, but it would never have happened without CEO Tim Cook at the helm. Reuters

Apple issued a press release on Monday announcing that the Fair Labor Association (FLA) has begun inspecting factories owned by Foxconn -- one of Apple's major supply chain partners -- upon Apple's request. The Cupertino, Calif.-based company said that Auret van Heerden, the president of the FLA, is leading a group of labor rights experts in the first round of inspections at the sprawling plant in Shenzhen, China, more informally known as Foxconn City.

We believe that workers everywhere have the right to a safe and fair work environment, which is why we've asked the FLA to independently assess the performance of our largest suppliers, said Tim Cook, Apple's CEO. The inspections now underway are unprecedented in the electronics industry, both in scale and scope, and we appreciate the FLA agreeing to take the unusual step of identifying the factories in their reports.

The FLA's independent assessment -- completely supplementary to Apple's own auditing practices -- will involve interviewing thousands out of the 230,000 Foxconn employees about the working and living conditions, including working hours, compensation, managerial issues, and health and safety conditions.

In recent months, more disgruntled Foxconn workers have stepped forward, offering media outlets like The New York Times and CNN insight into Foxconn's questionable practices. Workers contend they are paid less than $17 a day and often work more than 12 hours a day, six days a week. Despite being provided air conditioning, heating, cafeterias and sleeping facilities, workers complain about the military-like culture, which is one of surveillance, obedience and not challenging authority.

Foxconn has pledged full cooperation with the FLA, and will reportedly allow unrestricted access to all of their operations. The investigative team will report their findings in early March on the FLA website. Apple's other suppliers, including Quanta and Pegatron, will be inspected later this spring. By the time summer rolls around the FLA hopes to have covered 90 percent of facilities where Apple products are built and assembled.

We are focused on educating workers about their rights, so they are empowered to speak up when they see unsafe conditions or unfair treatment, Cook said in an e-mail to Apple employees. As you know, more than a million people have been trained by our program. We will continue to dig deeper, and we will undoubtedly find more issues. What we will not do - and never have done - is stand still or turn a blind eye to problems in our supply chain. On this you have my word.

Cook noted in his e-mail that Apple was the first company admitted to the FLA, and Apple took that step without hesitation. He told employees that they, along with the general public, could follow Apple's progress at apple.com/supplierresponsibility.

No one has been more up front about the challenges we face, he said. We are attacking problems aggressively with the help of the world's foremost authorities on safety, the environment, and fair labor. It would be easy to look for problems in fewer places and report prettier results, but those would not be the actions of a leader.

In contrast to various lengthy statements from Apple, Foxconn released a short, singular statement to CNN.

Foxconn takes our responsibility to our employees very seriously and we work hard to give our 1.2 million employees in China a safe and positive working environment and compensation and benefits that are competitive with all of our industry peers in that location, said Foxconn in an e-mail.

Apple released its annual supplier responsibility report in January, which revealed a total of 229 audits conducted throughout 2011, an 80 percent increase from the year prior. Apple also reported fewer cases of underage labor at its overseas factories and zero intentional underage hirings.

While Apple has largely improved its hiring practices, Chinese environmentalist groups still claim as many as 22 of the company's foreign factories continue to release toxic gasses, heavy metal sludge and other pollutants into the environment. In November 2011, Apple admitted that 15 of the 22 mentioned facilities were indeed product parts suppliers, which was the first time that Apple conceded any wrongdoing in relation to environmental pollution from any of its Chinese supply chains.

Apple said it will hire a third-party auditing firm to investigate its Chinese suppliers, and met with five different Chinese environmental groups to openly discuss its findings.

This is exactly why Apple needs these audits. While the company can visit its supply chain facilities all they want, Apple has absolutely zero incentive to report any negative findings. The company earned a record $46.3 billion in sales last quarter, and with sleek new products on the horizon, Apple looks to kick its foreign supply chains into overdrive, building and shipping more products than ever before.

Yet, an independent assessment of Apple's practices is exactly what the doctor ordered. Mirroring one of Steve Jobs's best and most unsettling attributes, Apple has an uncanny ability to distort reality, spinning negative news into positive news and positive news into extraordinary news. The move to join the Fair Labor Association probably would not have happened if Jobs were still in charge: Jobs was a control freak, and delegating responsibility to other companies was never his style.

That's why Apple, and all Apple users, should thank Tim Cook. While the fresh CEO is still focused on creating insanely great products, Cook is much more level-headed than Jobs was, and is fully aware that his company could not come clean if it didn't look for outside help, especially in this sensitive case.

In Walter Isaacson's biography of Steve Jobs, the author noted how Cook was the first person in the company to address issues from within Apple's foreign supply chains.

At a meeting early in his tenure, Cook was told of a problem with one of Apple's Chinese suppliers. 'This is really bad,' he said. ' Someone should be in China driving this.' Thirty minutes later he looked at an operations executive sitting at the table and unemotionally asked, 'Why are you still here?' The executive stood up, drove directly to the San Francisco airport, and bought a ticket to China. He became one of Cook's top deputies.

With Tim Cook at the helm, Apple is finally addressing the work issues in China, which should have been done a long time ago. Hopefully, Cook will push this massive clean-up effort even higher to the top of Apple's priority list.