Apple Reveals Suppliers After Audits Reveal Ethics Violations

Apple (NASDAQ:AAPL) released to the public its list of global suppliers on Friday in response to harsh criticism that the company was ignoring poor working conditions at partner factories.

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According to today’s press release, Apple conducted 229 audits of its partners last year, representing an 80 percent increase over 2010. From 2007 to 2010, the company conducted a total of 288 audits.

In conducting the audits, Apple looked at all levels of its supply chain, including final assembly and component suppliers. A number of violations — including breaches in pay, benefits, and environmental practices — were unearthed at plants in China, are are figured prominently throughout the 500-page report.

Other violations detailed in the audit including dumping wastewater onto a neighboring farm, using machines without safeguards, testing workers for pregnancy, and doctoring pay records.

The report found that 67 suppliers had docked worker pay as a disciplinary measure, and asked that they be compensated.

“I would like to make a significant improvement in the overtime area. I would like to totally eliminate every case of underage employment,” said CEO Tim Cook. “We have done that in all of our final assembly. As we go deeper into the supply chain, we found that age verification system isn’t sophisticated enough. This is something we feel very strongly about and we want to eliminate totally.”

All in all, six of Apple’s component current suppliers were found to employ underage labor, while 13 historical cases were discovered. The audit found no underage workers in the employ of Apple’s final assembly suppliers. Apple has already terminated business with one supplier and is working to correct the practices of another. Both are repeat offenders, according to the report.

After a series of suicides at its Foxconn facilities in China, Apple stepped up the number of supplier facilities it audits in an effort to improve and communicate its policies to the many companies involved in all stages of the production of Apple products, and to ensure that they meet the company’s code of conduct.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com