The good news is that Apple is finally feeling the heat from its customers about how its contract manufacturer, Foxconn, treats the people who make the iPads and iPhones you love so much. The bad news is that those workers will see little, if any, benefit from visits by auditors from the Fair Labor Association, which Apple has asked to inspect the factories where these employees work.
The reason that the employees are unlikely to benefit is that Apple doesn’t really have any enforcement mechanism in place, so even if there are violations of Apple’s agreement with Foxconn, Apple can’t really do anything about them. Once the inspection results are posted on the Fair Labor Association Website, Foxconn will revert to business as usual.
In addition to having little in the way of enforcement, the very real fact is that foreign auditors’ visits are unlikely to find anything significant in the way of violations. The reasons are simple, as I’ve learned over many years as an inspecting officer during my time in the U.S. Navy. The reason is that during the visit by the inspectors, the factory managers will clean up their respective acts, and will follow specified safety and workplace rules.
During the inspections and audits, workers will follow the rules in regards to workplace safetyfor example, exposure to dangerous materials will be limited, managers will enforce age requirements and work-hour requirements, and they will coach the employees on exactly what to say when they’re interviewed by the inspectors, and where possible, managers will be present when the interviews take place. Workers will comply with the coaching because they don’t want to lose their jobs.
When the report comes out, it will show a number of minor violations, and Foxconn will promise to fix those. The inspectors will find those minor violations because Foxconn’s managers will make sure they do. They’re smart enough to know that the inspectors will keep looking until they find something, so Foxconn’s managers will make sure it’s something minor. If you think I’m being cynical, be aware that I’ve performed a lot of inspections over the years, and unless you’re willing to divert from the normal inspection process, this is how inspections proceed.
There Are Better Ways to Conduct Inspections
There are two fairly good ways to actually find problems during inspections. The first is to hold a massive inspection as a total surprise. Considering the close relationship between the Chinese government and companies such as Foxconn, this is probably impossible. The inspectors have to get visas, and they have to enter the country. Once those events happen, all it takes is a phone call to Foxconn to warn that the inspectors are on the way.
The second method is to station a representative on-site permanently. By this, I mean Apple needs to assign a compliance manager to work in place at Foxconn, and make accommodation for the compliance manager as part of the contract for manufacturing. Once in place, the compliance manager needs to have sufficient authority to force changes when violations of the supplier-responsibility agreement are found, and this should also be part of the contract.
The idea of an on-site representative from the company doing the contracting isn’t new. The practice is very common in government contracting and in the aerospace industry, and it’s not all that unusual in other industries. But to make it work, Apple can’t treat this as business as usual.
Perhaps most important, the Apple representative must be someone who is actually a senior Apple employee. That Apple employee should have been part of Apple in Cupertino, Calif., and should be familiar with Apple’s employee practices and with the company’s manufacturing practices. This is not the time to hire a former Foxconn manager so that you can avoid paying someone to live in China.
Once in place in an office in each of the Foxconn factories, the Apple compliance manager must be given free rein to move about the factory at will. This is the only way to make sure that the contractor is really following the rules. Scheduled visits or visits in which the contractor’s managers escort the compliance manager simply don’t work. The Apple representative won’t be able to talk freely with employees, see conditions themselves, or to observe compliance as it actually is, rather than how the managers want Apple to think it is.
And finally, there needs to be a contractual arrangement that gives the Apple compliance manager the authority to enforce company standards in the workplace. This could include imposing substantial financial penalties on the contractor when violations are found if the contractor doesn’t take immediate remedial action, and perhaps even a stop-work order when really egregious problems are discovered.
Unfortunately, the inspections currently being done by Apple are little more than PR to remove some of the heat from Apple. If Tim Cook and Apple really care about the conditions at Foxconn and other contract manufacturers, then they need to take the steps to enforce the rules and stop looking the other way.