Apple Inc - Supply Chain Management

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Middle Ethical Consumer rating for supply chain management

In January 2016 Ethical Consumer viewed Apple Inc's website for information on its supply chain management. 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 2015 was viewed which stated that the company was working with a number of organisations to verify labour standards within its minerals supply chain however there was no evidence that it was working with organisations on labour standards in its manufacturing. Apple did not appear to be a member of a multi-stakeholder initiative. Apple did state that in the factories it audited workers' were given telephone numbers to call regarding violations of its code. Overall Apple had a rudimentary rating for stakeholder engagement. Auditing and reporting (poor) Apple's Progress Report 2015 while it was clear that Apple was monitoring its supply chain, there was no disclosure of audit results at factory or supplier level - although there was detailed discussions about its audit findings and the company did publish a list of its top 200 suppliers. It said that in 2014 it had 633 audits in 19 countries some of which were 2nd or 3rd audits for suppliers. However there was no clear transparant schedule of audits based on risk. Nor was there a statement stating it would audit its whole supply chain or mention of the costs of audits. There was a remediation strategy which included a Corrective Action Plan and that the company worked with suppliers to address any issues arising from its audit. Overall Apple was considered to have a poor approach to auditing and reporting. Difficult issues Apple's Progress Report 2015 stated that it carried out pre-scheduled audits as well as unannounced audits. It said "These surprise audits help ensure that our suppliers continue to meet our standards at all times — not just during scheduled visits. Apple conducted 40 surprise audits in 2014, where our team visited suppliers on the spot and inspected the facility within hours." 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. It said in 2014 it uncovered 16 cases of underage labour were discovered at six facilities — "and all were successfully remediated. This means that underage labour now accounts for 0.001 per cent of the total work population audited in our supply chain." Another difficult issue it was addressing was the use of third-party recruiters to secure contract workers. Apple said "These third parties may charge excessive recruitment fees to foreign contract workers in exchange for jobs. Doing so creates an unjust system that places contract workers in debt before they even begin their jobs." Apple required it suppliers to reimburse fees back to the workers. In October 2014, Apple informed its suppliers that, starting in 2015, no worker employed on an Apple line could be charged any recruitment fees. 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.

Apple Inc Corporate Communications:Apple Progress Report 2015 (28 January 2016)