In August 2019, Ethical Consumer viewed Apple’s 2019 Supplier Responsibility Report, the most recent available, for information on how the company managed workers' rights in its supply chain.
SUPPLY CHAIN POLICY (Rudimentary)
Apple’s Supplier Code of Conduct, dated January 1st 2019 was viewed. The document contained clauses covering forced labour, child labour, anti-discrimination and freedom of association, which were considered adequate. It also contained clauses relating to working hours and wages, however these were considered inadequate for the following reasons: it did not specify a maximum number of working hours, only stipulating that suppliers conformed to the law; and only required the payment of legal minimum wages, not living wages.
The Code of Conduct stated “This Code applies to Apple suppliers and their subsidiaries, affiliates, and subcontractors”.
Apple’s Supply Chain Policy was considered to be rudimentary.
STAKEHOLDER ENGAGEMENT (Rudimentary)
Apple was a member of the Responsible Business Alliance. However, as an industry-only body (with no membership from NGOs or trade unions), this was not considered to be a multi-stakeholder initiative and therefore the company did not demonstrate adequate stakeholder engagement as it did not appear to be member of any multi-stakeholder initiative focusing on labour standards in its manufacturing.
The report mentioned the use of third-party auditing in relation to the upholding of labour standards, however, it was unclear as to what type of third-party organisation this referred. Apple was therefore considered not to have included systematic input from NGO’s or labour organisations in the verification of its labour standard audits.
The Supplier Responsibility Report stated that Apple requires suppliers provide channels to employees to voice concerns including phone lines and the ability to contact Apple’s Supplier Responsibility team. It was unclear whether the complaints channels themselves were zero cost or provided in employees native languages, however, the report also stated that Apple “interview numerous supplier employees during annual assessments in their local language without their managers present,” to verify that the complaint channels are suitable. On this basis, the company was considered to have an an adequate complaints process.
Overall, Apple was considered to have a rudimentary approach to stakeholder engagement.
AUDITING AND REPORTING (Poor)
Apple’s 2019 Supplier Responsibility Report contained some disclosure of results including the number of ‘Core Violations’ found and several examples of these. However, this was not considered to be adequate reporting, as the results at factory and supplier level were not disclosed.
Neither a clear schedule for audits nor a statement pertaining to the breadth of the supply chain to which auditing applied were found in the documents consulted.
The report did demonstrate a clear strategy for handling instances of non-compliance, for example it stated that suppliers were required to immediately remediate a ‘Core Violation’ [in order] to remain an Apple supplier.
No mention of the costs of audits could be found in the documents consulted. Apple was considered to have a poor approach to auditing and reporting overall.
DIFFICULT ISSUES (Rudimentary)
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 two cases were found in 2017.
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. No mention was found in the reports or associated documents of the difficult issues of purchasing, audit fraud, illegal freedom of association or living wage.
Apple was considered to be addressing some of the difficult issues within its supply chain therefore it was considered to have a rudimentary approach to difficult issues.
Given that Apple's approach to its supply chain policy, stakeholder engagement and addressing difficult issues were considered to be rudimentary, and its approach to auditing and reporting was considered to be poor, Apple received Ethical Consumer’s middle rating for supply chain management overall and lost half a mark in this category.