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Report Examines Labor Violations at Apple Supplier's Malaysian Plant

In a lengthy piece detailing the hardships that workers in Apple's supply chain can face, Bloomberg follows the story of a factory worker at Flextronics International, a contract manufacturer based in Singapore and Kuala Lumpur that produced camera parts for the iPhone 5.

Ahead of the launch of the iPhone 5, Flextronics had to significantly ramp up production, hiring a 1,500 new employees via brokers and recruiters in Nepal, Malaysia, and surrounding areas. Because factory jobs are highly desired, many families pay upfront fees to brokers to acquire the positions, resulting in loans that can take "imported" workers years to pay off, with factory managers controlling when workers are able to leave.

Inside a Flextronics factory in Fort Worth, Texas. Courtesy of The Wall Street Journal
For the iPhone 5 rollout, a recruiter working for Flextronics contacted four brokers in Kathmandu, Nepal's capital, in late August and early September, urgently seeking 1,500 men to make cameras, according to three of the four brokers. The pressure to move so many men so quickly was unprecedented. "The recruitment agency was telling me, 'We need these workers, you have to send them by today,'" says Rajan Shrestha, managing director of a small company called Sharp Human Resources.
The frenzy to hire workers was how one Nepalese man, Bibek Dhong, found himself paying $250 and handing over his passport to a recruiter who promised him a good job. Dhong was forced to pay another $500 to a broker (6 months of his wages from his former job as a dairy farmer) and sign a debt agreement stating he would pay $400 more. Dhong was told to keep his broker fees secret, as Apple has a policy that prevents excessive charges by recruiters.

Last year [Apple's] audits turned up $6.4 million in fees paid by workers beyond the company's prescribed limit—compared with $6.7 million in the previous four years combined. And Apple audited fewer plants last year than it did in 2011. The company orders its suppliers to refund workers charged beyond its limit.
The Flextronics plant where Dhong was inspecting cameras experienced high failure rates before slowing and shutting down production. Because Flextronics retained Dhong's visa, he was unable to leave, stuck in a hostel in Malaysia with no food. After two months, he was permitted to return home, where he had to sell off much of his land to pay his debts and take a low paying job to continue to pay off the rest of the money for the factory job he didn't get to keep.

According to an Apple spokesman, Apple aggressively investigates claims of bonded labor where Apple products are made, and has mandated reimbursement to employees charged excessive recruitment fees.
"We aggressively investigate any claims of bonded labor where Apple products are made, and our team is continuously auditing deeper into the supply chain. We recently updated our code of conduct to require our suppliers to directly interview workers who are hired through labor brokers, as another way of eliminating unethical practices. Although Flextronics's Bukit Raja facility is no longer in Apple's supply chain, we take these allegations extremely seriously."
Apple has frequently been in the spotlight over the conditions at the factories where its products are made and the company has low tolerance for factories that violate its rules. For example, in January, Apple dropped one supplier for using underage workers. It is, however, an ongoing battle for Apple, as many factories are aiming to produce high volumes of products at low costs, often defying labor rules to keep profits high.

Earlier this year, Apple formed a Supplier Responsibility Academic Advisory board to work on providing "safe and ethical working conditions" wherever Apple products are made. The company also maintains an annual Apple Supplier Responsibility report [PDF] tracking its efforts to improve working conditions for factory employees.

Flextronics remains an Apple partner, and will run an Austin plant that will be responsible for the production of Apple's upcoming Mac Pro.

Top Rated Comments

(View all)

12 months ago
Funny how all these labor violation stories always single out Apple even though the facilities produce products for other top end electronics companies. Then there are companies that produce in other facilities and never called out. And finally, all these facilities are in countries that are U.N. members and supposedly pledged to the U.N's Universal Declaration of Human Rights, yet its condemnation is as loud as a sugar ant. Makes you think it's more about trying to knock Apple down than actually help abused workers.
Rating: 19 Votes
12 months ago
Ya, Apple is the only one using these plants to build products. :rolleyes: :rolleyes: :rolleyes:

It's all Apple's fault. HP, Samsung, Acer, Moto, etc., etc., all use air conditioned plants in the US where emplyees work from the comfort of a Lazy Boy reclinder for $60 an hour working just three 7 hour days a week but get paid for 40 hours.
Rating: 17 Votes
12 months ago
Good. For what I pay for my products they damn well better be made with sweat shop labor and children's tears.
Rating: 13 Votes
12 months ago

Funny how all these labor violation stories always single out Apple even though the facilities produce products for other top end electronics companies. Then there are companies that produce in other facilities and never called out. And finally, all these facilities are in countries that are U.N. members and supposedly pledged to the U.N's Universal Declaration of Human Rights, yet its condemnation is as loud as a sugar ant. Makes you think it's more about trying to knock Apple down than actually help abused workers.


Put "Apple" in the headline: more attention, more hits, more $$$.

Put "Asus" in the headline: who?
Rating: 12 Votes
12 months ago

Ya, Apple is the only one using these plants to build products. :rolleyes: :rolleyes: :rolleyes:

It's all Apple's fault.


As the industry leader, which they happily celebrate, they should be setting an example for everyone else. Not to mention their CEO is happy to support liberal ideas and individuals when it suits him.
Rating: 10 Votes
12 months ago

how does tim sleep at night ? besides on his million dollar bed sheets


How about all the people who complain about this yet continue to purchase Apple products. Put your money where your mouth is if it bothers you so.
Rating: 10 Votes
12 months ago

That's disgusting. Apparently Apple's inspections aren't digging deep enough. Poor working conditions and bad pay, in the US too.


WTF are you talking about? Inspections can't prevent problems, they detect problems and fix them. In this case, the situation is quite clear: As soon as Apple finds out, the supplier has the choice of refunding this money to the worker, or losing its contract with Apple. If you read Apple's reports, there have been several million dollars refunded to workers.
Rating: 9 Votes
12 months ago

And we are suppose to care because DHONG was doing something crooked to get the job and got burned?


Yes, actually. Because he didn't do anything crooked. The recruiter did something crooked by exploiting people who can't get a job unless they go through a recruiter who rips them off.

Of course _you_ don't need to care. Apple does and has fixed that kind of problem in the past. Repeatedly.

Apple could put and end to this tomorrow if they cared to. They need to write their contract such that the payments will be reduced if certain labor conditions are not met.

For examples, the company (Foxcon) is required to pay loads to brokers out of profits. The practice would stop overnight with conditions like that.


Guess what Apple has in their contracts. Guess why the recruiter told the workers to tell nobody about this. Because he knows that when Apple finds out, they will point to company to the terms in their contracts which force them to refund the money, which will make the company very angry with the recruiter (and if they are not totally stupid, they will have the same terms in their contract with the recruiter).

As the industry leader, which they happily celebrate, they should be setting an example for everyone else. Not to mention their CEO is happy to support liberal ideas and individuals when it suits him.


If you could be bothered to read the article, there's a link to Apple's document that describes exactly what Apple is doing and how they are indeed setting an example. They can't prevent **** from happening, but they sure do their best to fix it.
Rating: 8 Votes
12 months ago
More and more I’m coming the realise that the world is god-awful place. We should destroy it now and get Apple to build us a better one - 20% smaller and having much longer life with minimal charge.

If they can hire the staff to build it, that is.
Rating: 7 Votes
12 months ago
I am amazed that people on Apple forums are so quick to point the finger at Apple. Why not point the finger at the companies who hire these people? Why not point the finger at the Malaysian government? Or why not point the finger at the person that extorted the money without Apple, Flextronics, or the Malaysian government knowing about it?

If you are making millions upon millions of units of stuff, there are going to be thousands upon thousands of people involved. Just how do you propose that Apple fix this?

People are claiming Apple could stop this by bringing these jobs back to America. So, how does that help this man or the other people working in these factories? It puts them back on farms where they make almost nothing. Some help that is.

So, please don't tell me how much you care about Malaysian workers and then say bring the jobs back to the US, because that is straight up BS. Or maybe you are just knee jerk responding without thinking about just how complicated it is to run a company that makes the volume of stuff that Apple makes.
Rating: 5 Votes

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