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UPDATED: March 30, 2011 NO. 10 MARCH 10, 2011
A Poisonous Apple
While Apple Inc. is enjoying hot worldwide sales of its fashionable electronics, its health and environmental responsibilities through foreign subcontracts have come under fire

They said Apple tried to push away its portion of responsibility in recent scandals involving suppliers, mentioning the suicides at Foxconn and the poisoning scandal at Wintek, both of which represent the company on the Chinese mainland.

According to Ma, in the Suzhou factory of Wintek, only workers who produce parts for Apple were victimized. Some workers said Apple asked the firm to cover a workbench with plastic to ensure a dust proof environment for its screens, which left employees in a closed environment.

Compared with other IT giants like Hewlett-Packard Co. and General Electric Co., Apple's management of suppliers' social responsibility lags behind and does not correspond to its rising position in the IT field, according to a joint report released by 36 Chinese environmental NGOs on January 20.

The report, called "The Other Side of Apple," claimed to have proved a link between the IT giant's neglect of workers' safety and 137 workers becoming sick at United Win Technology.

The NGOs conducted a nine-month study on working conditions at seven of Apple's subcontractors in Suzhou and in Dongguan in south China's Guangdong Province.

"We found Apple did not fulfill its commitment to ensuring its supply chain's work safety and environmental standards, and treating workers with respect and dignity," said Ma, the lead author of the report.

The criticism came amid Apple's rising popularity and firmer foothold in the Chinese market, as the opening of more stores on the mainland bears witness.

The company recently announced sales revenues from the Chinese mainland, Hong Kong and Taiwan totaled $2.6 billion in the first quarter of the 2011 fiscal year, about 10 percent of its total revenues.

However, it is accused of aggressive pricing and being secretive about the management of its supply chain in Chinese factories, which have assembled most of Apple's products to date.

Apple's emphasis on price and quality has somehow driven suppliers in the global chain to win their contracts at all costs, sidelining issues about the environment and social responsibility, Ma said.

In its Supplier Responsibility Progress Report 2011, Apple admitted it had also encountered many other problems, such as underage workers and involuntary or debt-bonded labor, in China. Despite requests from Chinese NGOs, Apple declined to list its suppliers.

"If Apple does not disclose the information of its suppliers, nor responds actively to any query about its suppliers' bad behavior, then it is impossible to have any public supervision over its supply chain," Ma said.


Apple's chain scandal is not an isolated case in China, according to Ma.

In 2009, the Shanghang Huaqiang Battery Factory was linked to the lead poisoning of 121 children in southeast China's Fujian Province. Local authorities found that sludge and industrial wastewater were discharged directly into sewers.

The company was a key equipment manufacturer for Narada Power Source Co. Ltd, a global leader in stored energy solutions for industrial applications, starting in 2007. On its website, Narada identified itself as a supplier for Vodafone Group Plc., British Telecom Group Plc. and other mobile telecom brands.

On July 5, 2010, Vodafone responded to a British media inquiry about issues raised by Chinese NGOs.

In a statement, Vodafone recognized the seriousness of the pollution incident associated with Huaqiang Battery, which was never a direct supplier, but supplied product parts to Narada.

Narada ended its relationship with Huaqiang Battery in September 2009.

Legal responsibility in cases like this falls on the local supplier, not the international company that contracted the work, said Wang Canfa, a professor at China University of Political Science and Law in Beijing who offers free legal aid to victims of pollution.

"It's more of an issue of corporate social responsibility rather than legal responsibility for multinational corporations," Wang said.

Zhu Xiao, a law professor at Beijing-based Renmin University of China, said when violations occur, victims are hard pressed to collect evidence to prove international corporations were directly involved.

Many international corporations, as standard procedure, require a third-party audit showing their suppliers have certain credentials for quality control and worker safety. "However, many suppliers lack the capacity, skills and incentives to improve working conditions and protect the environment," said Ma.

Chinese NGOs had started to use information to improve environment, Ma said. IPE provides a public, online database of air and water violations by factories throughout China.

From 2006 to September 2010, the database had compiled a blacklist of more than 69,000 environmental violation records of companies. Of those, 340 companies have communicated with IPE, explaining the violations. Fifty multinational corporations and manufacturers took corrective action and accepted IPE-supervised environmental audits.

Ma said IPE had submitted proposals to the National People's Congress, China's top legislature, to require corporations to disclose information about toxic chemical releases and waste management activities.

Such a move would help industry, government and NGOs make informed decisions about industrial and environmental safety, Ma said.

Wang said the government should play a bigger part inspecting factories, taking preemptive measures to prevent accidents rather than just punishing those that violate safety or environmental regulations.

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