Apple Inc - Supply Chain Management

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Middle Ethical Consumer rating for supply chain management

In August 2016 Ethical Consumer sent Apple a questionnaire requesting details of its supply chain management. No response was received and the company's website was searched. Supply chain policy (reasonable) The company's Supplier Code of Conduct was viewed dated 1 January 2016. The Code stated that it applied to "Apple suppliers and their subsidiaries, afliates, and subcontractors (each a “Supplier”) providing goods or services to Apple, or for use in or with Apple products." It included adequate clauses on child labour, working hours, forced labour, freedom of association, and discrimination. It did not guarantee payment of a living wage. Apple was considered to have reasonable supply chain policy. Stakeholder engagement (rudimentary) Apple's Progress Report 2016 was viewed which stated that the company was working with a multi-stakeholder initiative to improve its tin supply chain, however it did not appear that it was working with organisations on labour standards in its manufacturing. Apple mentionned anonymous complaint systems that encourage workers to report workplace violations and retaliations . Overall Apple received a rudimentary rating for stakeholder engagement. Auditing and reporting (poor) While it was clear from Apple's Progress Report 2016 that Apple was monitoring its supply chain, there was no disclosure of audit results at factory or supplier level - although there was detailed discussion about overall audit findings and the company did publish a list of its top 200 suppliers, representing at least 97 percent of procurement expenditures for materials, manufacturing, and assembly worldwide. It said that in 2015 it had conducted 640 audits across its global supply chain, prioritised based on geographic and manufacturing process risks, prior audit scores, ability to correct previous issues, and concerns raised. There was no clear schedule of audits, nor a statement it would audit its whole supply chain, nor mention of the costs of audits. The remediation strategy included a Corrective Action Plan, and checking in at 30-, 60- and 90-day intervals, and one or two third-party verification audits. Overall Apple was considered to have a poor approach to auditing and reporting. Difficult issues (reasonable) Apple's Progress Report 2016 stated that it had carried out 21 unannounced audits in 2015. A difficult issue within the electronics industry is child labour, Apple detailed how it required suppliers - if they were found to be using child labour - to commit to a remediation strategy of returning the child back to their home and supporting them. Only one case was found in 2015. Another difficult issue it was addressing was the use of third-party recruiters to secure contract workers. Apple required suppliers to reimburse fees back to the workers. Apple was considered to be addressing some of the difficult issues within its supply chain therefore it was considered to have a reasonable approach to difficult issues. Overall, Apple received a middle rating for Supply Chain Management.

Apple Inc Corporate Communications:Supplier Responsibility 2016 Progress Report (7 September 2016)