Supply Chain Management
Best ECRA rating for supply chain policy
The Apple Inc website (www.apple.com), contained a section entitled Supplier Responsibility, when viewed in March 2013. The company's supply chain policy was rudimentary, based on the Electronic Industry Citizenship Coalition (EICC) Code. This included clauses on discrimination, working week, child labour and forced labour. It did not include a committment to paying a living wage nor to allow collective bargaining, only as respected by local law. The working week clause stated "Our Supplier Code of Conduct limits working weeks to 60 hours except in unusual circumstances, and all overtime must be voluntary." Apple found working weeks of over 60 hours were standard so it now tracks working hours weekly for over one million employees, publishing the data every month. As a result of this effort, its suppliers have achieved an average of 92 per cent compliance across all working weeks, and the average hours worked per week was under 50.
The company's Supplier Responsibility 2013 Progress Report included some evidence of stakeholder engagement; it joined the Fair Labor Association (FLA) in 2012, "We’ve invited the Institute of Public and Environmental Affairs (IPE) and other environmental groups to work with us on specialised audits. We’re also continuing our work with Verité, a non-governmental organisation (NGO) focused on ensuring fair working conditions, to develop new strategies for worker-management communication. We participate in the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) to promote the use of conflict-free minerals." It was involved in two complaints initiatives, exploring a range of solutions for encouraging more open communication, including hotlines and committees in which worker representatives address concerns with managers. Apple was judged to have good stakeholder engagement.
The company's Supplier Responsibility 2013 Progress Report provided the results of its 2012 audits. It disclosed the results of its audits, in terms of % of compliances. It stated that it audited all final assembly manufacturers annually, and selected component and nonproduction suppliers for audits based on risk factors, such as the prevailing conditions in the country where a supplier facility is located and the supplier’s past audit performance. Repeat audits were performed where on-compliances were found. It listed cases of non-compliance and the remediation plans for these facilities. Apple itself conducted the audits "supported by local third-party auditors who are experts in their fields". Apple was judged to have good Auditing and Reporting policy.
The Supplier Responsibility section of the company's website discussed one difficult issue in its supply chain - workers having been asked to pay extortionate fees by employment agencies were helped by the company who ordered the monies to be paid back. In terms of audit fraud - "In addition to regularly scheduled audits, we conduct a number of surprise audits, during which our team visit a supplier unannounced and insists on inspecting the facility within an hour of arrival. We conducted 28 of these surprise audits in 2012. During our regular audits, we may also ask a supplier to immediately show us portions of a facility that are not scheduled for review." Apple was judged to have a reasonable policy on Difficult Issues.
Apple Inc Corporate Communications:http://www.apple.com/supplierresponsibility/ (12 January 2011)