indepedent investigation of apple supplier foxconn highlights
DESCRIPTION
Introduction to the Fair Labor Association report on working conditions at Foxconn, supplier for Apple Computers. Published March 29th 2012.TRANSCRIPT
www.fairlabor.org
Protecting Workers’ Rights Worldwide
1
Independent Investigation of Apple Supplier, Foxconn Report Highlights
I. Introduction!"#$%&'()&*%#$%*"'%&'$+,*%)-%.%/.#&%0.1)&%2$$)3#.*#)4%5/026%#47'('47'4*%#48'$*#9.*#)4%#4*)%2((,':$%$+((,#'&%/);3)44<%="#4.:$%,.&9'$*%(.*'%'>(,)?'&@%/02%#$%.%+4#A+'%3),,.1)&.*#)4%.>)49%3)>(.4#'$<%+4#8'&$#*#'$<%.47%,.1)&%.47%"+>.4%	"*$%3#8#,%$)3#'*?%)&9.4#B.*#)4$%*".*%9)'$%1'?)47%#7'4*#-?#49%,.1)&%(&)1,'>$%1?%+43)8'1%*"'%$)+&3'$%)-%*"'$'%(&)1,'>$<%.47%")C%1'$*%*)%&'$),8'%*"'>@%D)&E#49%7#&'3*,?%C#*"%3)&()&.*#)4$%.,,)C$%-)&%>)&'%
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MARCH 2012
II. Methodology !"'%.$$'$$)&$%>'*")7#3.,,?%.47%3.&'-+,,?%3)47+3*'7%.4%.$$'$$>'4*%+$#49%/02:$%M+$*.#4.1,'%=)>(,#.43'%>'*")7),)9?%5M=N6%.$%C',,%.$%.4%.4)4?>)+$<%&'(&'$'4*.*#8'%C)&E'&%('&3'(*#)4%$+&8'?%)-%>)&'%*".4%OP<GGG%&.47)>,?%$','3*'7%/);3)44%C)&E'&$<%&'-'&&'7%*)%#4%*"#$%&'()&*%.$%*"'%M=QRS%C)&E'&$:%$+&8'?%)4%C)&E-)&3'%('&3'(*#)4%.47%$.*#$-.3*#)4@%!"'$'%$+&8'?$%.$E'7%C)&E'&$%.1)+*%*"'#&%('&3'(*#)4$%
C)&E#49%'48#&)4>'4*<%.47%*"'%.*>)$("'&'%C#*"#4%*"'%-.3*)&?@%!"'%M=N%>'*")7%';.>#4'$%3)>(,#.43'%#$$+'$<%
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*)%(&)8#7'%.%$),#7%-)+47.*#)4%-)&%*"'%.3"#'8'>'4*%.47%>.#4*'4.43'%)-%,'9.,%.47%3)7'%3)>(,#.43'@%!"'%.$$'$$)&$%.4$C'&'7%>)&'%*".4%F<FGG%A+'$*#)4$%)8'&%*"'%3)+&$'%)-%*"'#&%#48'$*#9.*#)4<%3)47+3*'7%"+47&'7$%)-%)4K%.47%)--K$#*'%#4*'&8#'C$<%.47%,)99'7%4'.&,?%O<GGG%$*.--%")+&$%#4$#7'%*"'%-.3*)&#'$@%!"#$%>+,*#K(&)49'7%.((&).3"%(&)7+3'7%.%&.49'%)-%1)*"%A+.4*#*.*#8'%.47%A+.,#*.*#8'%7.*.<%.,,)C#49%/02%*)%7'8',)(%.4%#4K7'(*"%+47'&$*.47#49%)-%C)&E#49%3)47#*#)4$<%(.&*#3+,.&,?%7+1%('.E%(&)7+3*#)4%('&#)7$@%
www.fairlabor.org22
III. Findings and Remedial Measures !"#$%&#$"'(&%$)*%$+"#+,#-+./+""0#-12#+3&(4'(5#*%#6(*&%#
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*"5#<+4?$")#:+94&A#B:(#@+&%#C4(&&$")#C4+36(@&#*4(#
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A) Working Hours E94$")#C(*?#C4+59/%$+"0#%:(#*'(4*)(#"9@3(4#+,#:+94&#
<+4?(5#C(4#<((?#*%#-+./+""#,*/%+4$(&#(./((5(5#3+%:#%:(#
-12#;+5(#&%*"5*45#*"5#;:$"(&(#6()*6#6$@$%&A#B:$&#<*&#
%49(#$"#*66#%:4((#,*/%+4$(&A#-94%:(40#%:(4(#<(4(#C(4$+5&#
594$")#<:$/:#&+@(#(@C6+>((&#<+4?(5#@+4(#%:*"#&('("#
5*>&#$"#*#4+<#<$%:+9%#%:(#4(D9$4(5#@$"$@9@#FGH:+94#
34(*?A#B:(#4++%#/*9&(&#$"/695(#:$):#6*3+4#%94"+'(40#
*"5#/*C*/$%>#C6*""$")A#
Remedial Action:#-+./+""#:*&#*)4((5#%+#*/:$('(#,966#6()*6#/+@C6$*"/(#4()*45$")#<+4?#:+94>#I96>#J0#F8JK0#
<:$6(#C4+%(/%$")#<+4?(4&L#C*>A#M:$6(#4(59/$")#:+94&#
*"5#&%*3$6$N$")#C*>0#-+./+""#<$66#"((5#%+#$"/4(*&(#
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C4+59/%$'$%>#*"5#D9*6$%>A#!"#%:(#"(.%#>(*40#%("&#+,#
%:+9&*"5&#+,#(.%4*#<+4?(4&#<$66#"((5#%+#3(#4(/49$%(50#
%4*$"(5#*"5#*//+@@+5*%(5#*%#%:(#&*@(#%$@(#*&#:+94&#
<+4?(5#*4(#C4+)4(&&$'(6>#4(59/(5#C(4#<+4?(4A#
B) Health and Safety
$"/+"&$&%("%#C+6$/$(&0#C4+/(594(&#*"5#C4*/%$/(&A#B:(#
$"'(&%$)*%$+"#4('(*6(5#%:*%#*#/+"&$5(4*36(#"9@3(4#
+,#<+4?(4&#,(6%#)("(4*66>#$"&(/94(#4()*45$")#%:($4#
:(*6%:#*"5#&*,(%>A#B:(#$&&9(#+,#*69@$"9@#59&%#<*&#+,#
C*4%$/96*4#/+"/(4"0#*&#%:$&#<*&#%:(#/*9&(#+,#*"#(.C6+&$+"#
*%#%:(#;:(")59#,*/$6$%>#6*&%#>(*4A#-12#,+9"5#%:*%0#
+"(#>(*4#*,%(4#%:(#;:(")59#(.C6+&$+"0#-+./+""#:*5#
$@C4+'(5#+C(4*%$")#C4+/(594(&0#@(*&94(@("%0#*"5#
5+/9@("%*%$+"#%+#4(59/(#4$&?#4(6*%(5#%+#*69@$"9@#59&%#
<:(4(#2CC6(#C4+59/%&#*4(#@*5(A#
Remedial Action::(*6%:#*"5#&*,(%>0#*"5#$"/4(*&(5#<+4?(4#$"'+6'(@("%#
$"#,+4@96*%$")#*"5#$@C6(@("%$")#:(*6%:#*"5#&*,(%>#
Contents
Report Highlights ............................................................................... 1
Foxconn Investigation Report ....................................................... 4
Process ................................................................................................... 4
A. Compliance Assessments .................................................. 5
B. Worker Satisfaction Survey ............................................... 6
Investigation Results ......................................................................... 6
A. Principal Findings ............................................................. 8
C. Hours of Work .................................................................... 8
D. Compensation ................................................................... 9
E. Interns .................................................................................. 9
F. Industrial Relations ........................................................10
G. Health, Safety & Environment....................................11
FLA Recommended Actions & Remediation Plan.................12
Appendices
1. SCI Findings (Guanlan, Longhua, Chengdu)
2. SCOPE Workforce Perception and Satisfaction Report
3. SCOPE Survey Data
4. Understanding FLA’s Assessment Methodology
www.fairlabor.org33
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C) Industrial Relations and Worker Integration@,9*-+$;2+"/-'0".,8'+)2+'("/=*/-'(*/*'#2/;*#&'2#$*,2+*8:'$,'02%+'"/'$,'!*/%*!+$",:'0/"1'02%+"/$*-7'-20*+&'2,8'
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Remedial Action: 5"6%",,')2-'2;/**8'+"'*,)2,%*'("/=*/-7'!2/+$%$!2+$",'$,'%"11$++**-'2,8'"+)*/'.,$",'-+/.%+./*-3''@,'=**!$,;'($+)'#"%2#'#2(-:'5"6%",,')2-'2;/**8'+"'*,-./*'*#*%+$",-'"0'("/=*/'/*!/*-*,+2+$9*-'($+)".+'12,2;*1*,+'$,+*0*/*,%*3'?##'("/=*/-'($##'/*%*$9*'2'%"!&'"0'+)*'D"##*%+$9*'E2/;2$,$,;'?;/**1*,+'2,8',*('*1!#"&**-'($##'/*%*$9*'$,0"/12+$",'2<".+'.,$",'2%+$9$+$*-'8./$,;'+)*$/'"/$*,+2+$",'!/"%*--3
D) Compensation and Social Security InsuranceF)$#*'5"6%",,'(2;*-'2/*'2<"9*'+)*'D)$,*-*'29*/2;*'2,8'+)*'#*;2#'1$,$1.1:'+)*'2--*--1*,+'0".,8'+)2+'GH'!*/%*,+'"0'+)*'("/=*/-'12&',"+'/*%*$9*'02$/'%"1!*,-2+$",'0"/'.,-%)*8.#*8'"9*/+$1*3''B)*'2--*--"/-'8$-%"9*/*8'+)2+'.,-%)*8.#*8'"9*/+$1*'(2-'",#&'!2$8'$,'IJC1$,.+*'$,%/*1*,+-3'B)$-'1*2,-:'0"/'*621!#*:'+)2+'KL'1$,.+*-'"0'"9*/+$1*'("/='/*-.#+-'$,',"'!2&'2,8'
MN'1$,.+*-'/*-.#+-'$,'",#&'",*'.,$+'"0'"9*/+$1*'!2&3'?%/"--'D)$,2:'2##'("/=*/-'1.-+')29*')*2#+):'2%%$8*,+:'-"%$2#'-*%./$+&:'.,*1!#"&1*,+:'2,8'12+*/,$+&'%"9*/2;*:'<.+'+)*'-&-+*1'$-'-*+'.!'",'2'!/"9$,%$2#'2,8'%$+&'<2-$-3'B)$-'1*2,-'+)2+'("/=*/-'()"'1$;/2+*'0/"1'"+)*/'%$+$*-'"/'!/"9$,%*-'%2,7+'%"##*%+'+)*$/'$,-./2,%*'()*,'+)*&'/*+./,')"1*3'F"/=*/-'2/*'0./+)*/'.,1"+$92+*8'+"'*,/"##'<*%2.-*'"0'2'/*>.$/*8'%"C!2&'$,+"'$,-./2,%*'!/";/21-'
Remedial Action:'5"6%",,')2-'2;/**8'+)2+'+)*'!"#$%&'2,8'!/2%+$%*'/*#2+$,;'+"'-.%)'-$+.2+$",-'(2//2,+-'$1!/"9*1*,+O'("/=*/-'($##'<*'!2$8'02$/#&'0"/'2##'"9*/+$1*'2,8'("/=C/*#2+*8'1**+$,;-'+)2+'"%%./'".+-$8*'/*;.#2/'("/=$,;')"./-3'?0+*/'*6+*,-$9*'8$-%.--$",-:'5"6%",,'($##'"00*/'2'+("C+/2%='/*1*8$2#'-+/2+*;&P'+"'$,9*-+$;2+*'2#+*/,2+$9*'!/$92+*'"!+$",-'+"'!/"9$8*'.,*1!#"&1*,+'$,-./2,%*'+"'1$;/2,+'("/=*/-:'2,8'("/='($+)';"9*/,1*,+'2;*,%$*-'+"'*6!*8$+*'+)*'
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IV. Conclusion
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www.fairlabor.org4
Foxconn Investigation Report
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Foxconn Facility Guanlan (Feb 14–17)
Longhua (Mar 5–8)
Chengdu (Mar 6–9)
# OF ASSESSORS
# OF ASSESSORS
# OF ASSESSORS
Lead Assessor 1 1 1
Co-Auditor 3 3 2
Worker Interviewer 3 1 2
TOTAL 7 5 5
Worker Count 73,004 66,680 38,393
Workers Interviewed Onsite 230 353 558
Workers Interviewed O!site 21 66 96
Management Interviews 20 30 58
Assessment Duration 3.5 Days (308 hrs)
4 Days (220 hrs)
4 Days (212 hrs)
FLA Sta! Participation 2 2 2
FLA Accredited Monitoring Org. Openview Openview SCSA
Payroll and Time Records Review 12 Months 12 Months 12 Months
Box 1: SCI Assessment Logistics
www.fairlabor.org5
Sustainable Compliance Assessments!"#$%&'()*+),-#$./01-*)+2#$3''#''0#+('$4#5#$2/+6&2(#6$&'*+7$("#$%&'()*+),-#$./01-*)+2#$8%.9:$0#("/6/-/7;$6#<#-/1#6$,;$("#$=>3?$@&2"$0/5#$(")+$)$2/01-*)+2#$)&6*(A$%.9$#<)-&)(#'$("#$B&+2(*/+*+7$/B$("#$#01-/;0#+($5#-)(*/+'"*1$("5/&7"$("#$#+(*5#$4/5C#5$-*B#$2;2-#$D$B5/0$"*5*+7$(/$(#50*+)(*/+?$!"#$-*B#$2;2-#$*'$6*<*6#6$*+(/$+*+#$#01-/;0#+($
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
)+)-;'*'$(/$*6#+(*B;$)--$("#$B)2(/5'$(")($2/+(5*,&(#6$(/$(")($*''&#$*+$("#$'&11-;$2")*+$/5$)($("#$#+(#515*'#$-#<#-?$$!"#$%.9$0#("/6/-/7;$#+2/01)''#'$2/01-*)+2#$*''&#'$,&($/BB#5'$)$0/5#$6#()*-#6$)''#''0#+($/B$("#$#+(*5#$#01-/;0#+($5#-)(*/+'"*1A$(/$15/<*6#$)$'/-*6$B/&+6)(*/+$B/5$("#$)2"*#<#0#+($)+6$0)*+(#+)+2#$/B$-#7)-$)+6$2/6#$2/01-*)+2#?$!"#$)''#''/5'$)+'4#5#6$0/5#$(")+$JAJKK$L&#'(*/+'$*+$("#$2/&5'#$/B$("#*5$5#1/5(*+7$/+$#)2"$B)2*-*(;?$!"#$%&'()*+),-#$./01-*)+2#$3''#''0#+('$4#5#$
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
'#<#5)-$'/&52#'A$*+2-&6*+7$6/2&0#+($5#<*#4A$1";'*2)-$/,'#5<)(*/+A$0)+)7#0#+($*+(#5<*#4'A$)+6$/+\$)+6$/BB'*(#$*+(#5<*#4'$4*("$4/5C#5'?$$3$'&00)5;$/B$("#$-#<#-$/B$#BB/5($)''/2*)(#6$4*("$("#$%.9$)''#''0#+('$*'$
15/<*6#6$*+$O/F$Q?$$3($("#$(*0#$/B$("#$%.9$)''#''0#+('A$("#$+&0,#5$/B$4/5C#5'$)($("#$("5##$,&'*+#''$75/&1'$4)'$)'$B/--/4'^
@/5#$6#()*-#6$*+B/50)(*/+$/+$("#$6#0/75)1"*2'$/B$("#$4/5CB/52#$/B$#)2"$/B$,&'*+#''$75/&1$'&,H#2($(/$%.9$)''#''0#+($*'$7*<#+$*+$!),-#$Q?$
GUANLANiDPBG1
LONGHUAiDSBG1
CHENGDUSHZBG2
Total number of workers 73,237 66,680 38,393
Gender
% male 67% 63.11% 64.01%
% female 33% 36.89% 35.99%
Average age (years) 23.1 23.1 23.4
Employment by occupation
Operators (%) 90.7% 91.12% 82.31%
Managers (%) 0.1% 0.07% 0.08%
Line/floor supervisors (%) 6.4% 4.91% 6.63%
Engineers/engineers (%) 2.8% 3.9% 10.98%
Employment by status
Permanent/regular (%) 96.9% 99.81% 100%
Interns (%) 0.1% 0.19%
Other (%) 3%
Young workers (16 to <18 years) (%) 3.6% 4.91% 5.51%
Migrant workers3 (%) 99% 99.17% 14.22%
Living in the dormitories (%) 29.3% 37.52% 69.61%
Note: Information as of March 5, 2012. At the time of the FLA SCI assessment at Guanlan (mid-February 2012), employment was 73,004.1 Assembly2 Components & Assembly3 A migrant worker is de!ned in FLA’s Workplace Code of Conduct as a person who migrates or who has migrated from one country to another or in some cases between regions or provinces of a country with a speci!c purpose of exercising an economic activity from which they will receive a wage. The above reference is to internal migrants.
SOURCE: STATISTICS PROVIDED BY FOXCONN.
Characteristics of the Workforce at Three Foxconn Facilities, March 2012
TABLE 1
www.fairlabor.org6
Worker Satisfaction Survey!"#$%&'()$*+,-.$/012#1)($*314#5)$61#$)7689619:;#9<$=3687:767:4#$=3#)7:0886:1#)$7"67$61#$>0?@A#7#9$68085?03)A5$B5$6$16890?A5$)#A#>7#9<$1#@1#)#8767:4#$)6?@A#$0C$D012#1)E$!"#$*+,-.$F0B$*67:)C6>7:08$*314#5$
G0B$)67:)C6>7:08<$)3>"$6)$D012:8H$"031)<$D6H#)$689$
689$7"#$67?0)@"#1#$D:7":8$7"#$C6>7015<$)3@#14:)01)($689$?686H#?#87()$677:739#$689$>0??38:>67:08<$@10C#)):086A$9#4#A0@?#87$689$69468>#?#87$0@@01738:7:#)<$@#1>#@7:08$0C$D012$@#1C01?68>#<$689$@"5):>6A$:?@6>7$0C$D012:8H$67$7"#$C6>7015E$I8$699:7:08$70$7"#$/012#1)($*314#5)<$C0>3)$H103@$9:)>3)):08)$D:7"$D012#1)$689$:8J9#@7"$:87#14:#D)$D:7"$D012#1)$689$)3@#14:)01)$0B76:8#9$=36A:767:4#$9676$70$>0?@A#?#87$7"#$=3687:767:4#$1#)3A7)E'8$%&'J6>>1#9:7#9$:89#@#89#87$)#14:>#$@104:9#1<$
IK%'+!<$69?:8:)7#1#9$7"#$*+,-.$F0B$*67:)C6>7:08$*314#5$70$6$1#@1#)#8767:4#$)6?@A#$0C$D012#1)$67$7"#$7"1##$C6>701:#)E$/012#1)$67$):L$B3):8#))$38:7)<$7D0$67$#6>"$0C$7"#$A0>67:08)<$D#1#$)314#5#9E$!"#$7076A$83?B#1$0C$D012#1)$67$7"#$):L$B3):8#))$38:7)$D6)$MNN<NOOE$
>0893>7#9$B6)#9$08$7"#$>"616>7#1:)7:>)$0C$7"#$D012C01>#$67$7"#$7"1##$A0>67:08)E$!"#$)314#5$D6)$:?@A#?#87#9$:8$6AA$7"1##$A0>67:08)$):?3A768#03)A5$04#1$7"#$@#1:09$C10?$%#B13615$PQ$70$R61>"$Q<$MOPME$$!"#$83?B#1$0C$46A:9$)314#5)$C10?$6AA$7"1##$C6>701:#)$D6)$QS<PTT<$689$
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!"#$)314#5$D6)$69?:8:)7#1#9$:8$716:8:8H$>A6))100?)$67$#6>"$0C$7"#$D012@A6>#)<$D:7"$MOO$70$MVO$D012#1)$@617:>:@67:8H$67$6$7:?#E$/012#1)$>0?@A#7#9$7"#$=3#)7:0886:1#$#:7"#1$08$6$>0?@37#1$01$68$:-69E$$'7$#6>"$A0>67:08<$7"#$D012#1)$"69$)@6>#$C01$@1:46>5$D":A#$>0?@A#7:8H$7"#$=3#)7:0886:1#$689$7D0$:87#14:#D#1)$D#1#$6)):H8#9$70$#6>"$100?$70$@104:9#$6)):)768>#$689$
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
08A5$B#$>0893>7#9$08J):7#$689$D:7"$7"#$>00@#167:08$0C$?686H#?#87E$!0$#8)31#$7"67$D012#1)$C##A$C1##$70$68)D#1$=3#)7:08)$>689:9A5<$D#$#L@A:>:7A5$9:)>3))$031$808J1#76A:67:08$@0A:>5$D:7"$?686H#?#87$689$:87#14:#D##)$689$@104:9#$D012#1)$D:7"$6$@"08#$83?B#1$7"#5$>68$>6AA$:C$7"#5$"64#$6857":8H$#A)#$7"#5$D03A9$A:2#$70$7#AA$3)$01$:C$7"#5$B#A:#4#$7"#5$"64#$B##8$)3BG#>7$70$1#>1:?:867:08E
ResultsI8$7"#$*+I$?#7"090A0H5<$]%:89:8H)^$":H"A:H"7$H6@)$B#7D##8$9#):1#9$689$6>736A$@#1C01?68>#$08$9:CC#1#87$.?@A05?#87$%38>7:08)<$)3>"$6)$_:1:8H$689$+0?@#8)67:08E$'A7"03H"$)0?#$%:89:8H)$?:H"7$1#A67#$70$>A#61$808J>0?@A:68>#$D:7"$7"#$%&'$+09#$689$+0?@A:68>#$\#8?612)$01$D:7"$
H6@)$01$)"017>0?:8H)$7"67<$A#C7$386991#))#9<$?65$A#69$70$808J>0?@A:68>#$D:7"$6$>09#$01$A#H6A$)7689619E$!"#$@31@0)#$0C$?62:8H$7"#$%:89:8H$:)$70$:9#87:C5$61#6)$D"#1#$:?@104#?#87)$D:AA$6>":#4#$A08HJ7#1?$689$)3)76:8#9$>0?@A:68>#E$')$)3>"$]%:89:8H)^$61#$H#8#16AA5$)3@@017#9$B5$6$1007$>63)#$686A5):)$7"67$6AA0D)$7"#$>0?@685$70$:87#14#8#$
www.fairlabor.org7
!"#"$%#&'($"#)%*%)#"+#%,,%-"#-$!.(%/#011&%22'.(#%!-$#+,#"$%#3'.1'.(2#'2#)'4%)5#"+#'.-&%!2%#"$%#-$!.-%2#+,#262"!'.!7)%#'89&+*%8%."#+,#:+&4'.(#-+.1'"'+.2/#
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Immediate Action Required:#@$'2#-!"%(+&5#!99)'%2#"+#1'2-+*%&'%2#+'.1'.(2#!"#"$%#:+&49)!-%#"$!"#.%%1#'88%1'!"%#!-"'+.#7%-!62%#"$%5#-+.2"'"6"%#!.#'88'.%."#1!.(%&A#&'24#"$%#:+&4%&2B#7!2'-#&'($"2A#"$&%!"%.#"$%'!,%"5#!.1#:%))C7%'.(#+	+2%#!#-)%!&#$!>!&1#"+#"$%#%.*'&+.8%."A#!.1#7%-!62%#"$%5#!&%#-)%!&)5#.+"#'.#-+89)'!.-%#:'"$#"$%#3D0#E+&49)!-%#<+1%#+,#<+.16-"#!.1#)+-!)#)!:2Sustainable Remediation Required:#@$'2#-!"%(+&5#!99)'%2#"+#3'.1'.(2#"$!"#&%F6'&%#!-"'+.2#"!-4)'.(#"$%#6.1%&)5'.(#&++"#-!62%2#'.#!#)+.(C"%&8#!.1#252"%8!"'-#8!..%&
3'.1'.(2#,&+8#"$%#;<=#022%228%."2#+,#"$%#"$&%%#3+G-+..#,!-"+&'%2#!99%!&#'.#,6))#!2#!99%.1'-%2/#3+&#%!-$#3'.1'.(A#"$%&%#'2#!#&%,%&%.-%#"+#"$%#H89)+58%."#36.-"'+.#'.*+)*%1A#"$%#"59%#+,#3'.1'.(#I'88%1'!"%#!-"'+.#+Ć"!'.!7)%#&%8%1'!"'+.JA#!.#%G9)!.!"'+.#+,#
"$%#3'.1'.(#!.1#"$%#)+-!)#)!:#+D0#K%.-$8!&42#"$!"#!&%#'.*+)*%1/#H!-$#3'.1'.(#!)2+#'.-)61%2#!.#!.!)52'2#+,#"$%#&++"#-!62%2#!.1#&%-+88%.1!"'+.2#,+&#'88%1'!"%#!-"'+.#+Ć"!'.!7)%#'89&+*%8%."A#1%9%.1'.(#+.#"$%#"59%#+,#3'.1'.(/#
Employment Functions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
2-+&%1#$'($%2"#:'"$#&%29%-"#"+#"$%#-+89%.2!"'+.#!.1#%.*'&+.8%."!)#9&+"%-"'+.#H32A#!.1#)+:%2"#:'"$#&%(!&1#"+#'.162"&'!)#&%)!"'+.2#!.1#"%&8'.!"'+.#!.1#&%"&%.-$8%."/##
0
20
40
60
80
100%
72%
Average Score
Factory Structure
Recruitment, Hiring and Personnel
Development
Compensation Hours of Work
Terminationand
Retrenchment
IndustrialRelations
GrievanceSystem
WorkplaceConduct
and Discipline
Health and Safety
EnvironmentalProtection
Fu Tai Hua Industrial (Shenzhen) CO. LTD, Guanlan
Fu Tai Hua Industrial (Shenzhen) CO. LTD, Longhua
Hong Fu Jin Precision Electronical Technology (Chengdu) Co., Ltd., Chengdu
93%85%
67%72%72%
79%85%
89%
77% 80% 77%
57%64%
68%
58%53%53%
71%73%79%
72%68%
75% 73%
87%86%
74%
87%92%
Score by Employment FunctionTABLE 2
Employment Function Scores
www.fairlabor.org8
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Principal Findings
@+A*+..%.''8%#+%-88&'((?%3+,'%+0%#$+('%>'&'%".(#-.*'(%+0%.+.B*+,)5"-.*'2%(+,'%>'&'%/-)(%#$-#%&')&'('.#%-%&"(C%+0%.+.B*+,)5"-.*'2%(+,'%>'&'%(",)5=%-&'-(%+0%>'-CB.'((%".%.''8%+0%(#&'./#$'."./?%D%8'#-"5'8%&'E"'>%+0%-55%
&')+&#(?%%D5(+%-##-*$'8%"(%#$'%!+&C0+&*'%F'&*')#"+.%-.8%3-#"(0-*#"+.%G')+%>$"*$%)&'('.#(%#$'%,'#$+8+5+/=%-.8%('5'*#'8%&'(15#(%0&+,%#$'%>+&C'&%)'&*')#"+.%(1&E'=(?H.%>$-#%0+55+>(2%>'%(1,,-&"4'%(+,'%+0%#$'%C'=2%
-5(+%+.%#$'%&'(15#(%+0%#$'%>+&C'&%)'&*')#"+.%(1&E'=(%-(%-))&+)&"-#'?%%I$"(%"(%.+#%-.%'A$-1(#"E'%&'E"'>%+0%#$'%
$+1&(%>+&C'82%)-&#"*15-&5=%+E'&#",'%-.8%&'(#%8-=(J%#$'%
,"/&-.#%>+&C'&(:J%#$'%',)5+=,'.#%+0%".#'&.(2%=+1./%>+&C'&(%6KLBKM%='-&(%+0%-/':%-.8%($+&#B#'&,%>+&C'&(J%#$'%(=(#',%+0%>+&C'&%)-&#"*")-#"+.%-.8%&')&'('.#-#"+.J%-.8%
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Hours of Work
There are two issues here – the FLA Code Standard of 60 hours per week in total (regular plus overtime) and the Chinese legal limits of 40 hours per week and a maximum of 36 hours overtime per month (e!ectively nine hours per week). All three factories exceeded the FLA Code Standard and the requirements of the Chinese labor law at some point in the last 12 months.
During peak production periods, the average number of hours worked per week exceeded the FLA Code Standard of 60 hours. Also, there were periods in which some workers did not get one day o! in seven days. This is con"rmed by the worker survey: the sample of workers surveyed indicated average weekly working hours of 56 hours, average maximum weekly working hours of 61 hours, and occasional long periods without a rest day; nearly half of the employees
indicated that had been periods when they worked 11 or more consecutive days.
The monthly legal limit on overtime hours (36 hours) was exceeded in Chengdu by about half the workforce in July 2011 and January 2012. In Guanlan almost 80% of the total workforce exceeded the legal limit on overtime hours between September 2011 and January 2012. In Longhua, most of the workers (77.1%) worked overtime beyond the legal limit between March 2011 and February 2012.
The root causes include high labor turnover, which undermines e#ciency, and gaps in production and capacity planning. A majority of the workers worked fewer than 60 hours per week (regular hours plus overtime) in early 2011, but in November and December 2011, 34% and 46% of the workforce respectively worked up to 70 hours per week and 37% did not receive the required 24 consecutive hours of rest in a seven-day period during the peak season (November 2011- January 2012).
When asked in the survey how they feel about working hours, 48% thought that their working hours were reasonable, and another 33.8% stated that they would like to work more hours and make more money. 17.7% of the respondents felt that they worked too much. Correlating the views of employees on hours of work and contentment levels from the survey suggests that after a certain number of hours, employees are not more content if they work additional hours. The diagram below groups workers: (1) working fewer than 52 hours per week; (2) working between 52 and 59 hours per week; and (3) working 60 or more hours per week, and compares them with respect to contentment, loyalty and attachment to the factory, and working relationships. Employees who worked 52 hours or less weekly were slightly more content, more loyal and had better relationships at work. The relationship above was con"rmed when participants shared views at the focus groups on working hours, breaks and shift arrangements. While employees remain concerned about long working hours, they welcome them because of the boost to their pay. In all focus group discussions about working hours, employees raised concerns that stricter working hour regulations would lower their income.
www.fairlabor.org9
Compensation
The SCI assessors found that wages are paid on time and are above the applicable legal rates. The legal minimum wage in Shenzhen is RMB1500, while the starting wage at Foxconn is RMB1800. After the probation period, wages go up to about RMB2200. Sick leave payments are higher than the local law requirement, with workers compensated 70% as opposed to the minimum law requirement of 60%. Overtime hours were also paid at the appropriate premiums.
With respect to satisfaction with wages, 64.3% of workers thought that their salary was not su!cient to cover their basic needs. The discontent with salaries was more pronounced in Chengdu where the legal minimum wage is lower; 72% of workers at Chengdu said their salaries did not cover basic needs. (According to the survey respondents, the average monthly salary in Chengdu was 2,257 RMB, compared to 2,687 RMB in Longhua and 2,872 RMB at Guanlan.)
The system used to measure overtime has an issue in that it uses a unit of 30 minutes for unscheduled overtime (for 14% of workforce) and does not pay workers for fractions of a unit they may have worked. In other words, a worker who puts in an extra 29 minutes may not get paid for that time, and a worker who puts in 59 minutes may only be paid for 30. This does not apply to overtime that is scheduled in advance. A similar issue regarding payment arises with respect to team meetings that take place before or after work and training that takes place outside working hours. These generally last about 10 minutes and management did
not see these as work and accordingly did not pay for them.
China’s Social Insurance Law, adopted on October 28, 2010 (e"ective July 1, 2011), requires that #ve types of social insurance cover all workers: work-related injury, health, social security, unemployment and maternity. Unfortunately, the system is still patchy and presents signi#cant structural obstacles to providing e"ective coverage. The main problem faced by many employers and workers is that of transportability of bene#ts between provinces. Social security, medical and unemployment insurance require contributions from both the employer and the employee. However, migrant workers may not be able to claim those bene#ts in their hometown if they retire or become unemployed. It all depends on whether the two provinces in question (where they work and where they have residence) have established the institutional mechanisms to transfer the relevant funds. Government is slowly patching the holes in the national social insurance safety net but they still a"ect a large number of migrant workers in China.
At the Shenzhen facilities only 1% of the workforce are local, while the migrant workers are not enrolled in the unemployment and maternity insurance systems. The reason for this is that all migrant workers in Shenzhen are unable to claim these bene#ts because they do not have Shenzhen residence cards. At the Chengdu facility, the problem does not present itself because most of the workers are from in-province; therefore, all those workers are fully covered.
The problem is not so acute in the case of maternity, because the Shenzhen authorities allow women to register and claim bene#ts when they become pregnant, even if they had not paid into the system previously. Therefore, the major problem is that there are no transfer mechanisms in place between most provinces in China for unemployment insurance.
Interns
The issue of work by interns has been the source of much controversy in China in recent years and represents a major concern for external stakeholders. We therefore made a special e"ort to understand and assess the risks of the internship system at Foxconn.
Internship agreements for vocational school students are three-party agreements involving the
3.8
3.6
3
3.2
3.4Group Working Fewer Than 52 Hours/Week
Group Working Between 52 to 59 Hours/Week
Group Working 60 Hours or More/Week
ContentmentRelationshipat Work
Attachment to Factory & Loyalty
Working Hours and Loyalty, Contentment and Relationship at Work
Comparison between groups with di"erent working hours
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school, Foxconn, and the intern. For college students, the agreement is signed directly between Foxconn and the intern. Internships are for three to six months and a teacher accompanies the interns. In 2011, 2.7% of the workforce of Foxconn Group consisted of interns, an average of 27,000 interns per month. Their average tenure was 3.5 months.
The intern labor force is seasonal, peaking in the summer months when most students seek internships (5.7% of the workforce consisted of interns in August 2011). At the time of our March 2012 assessment, 519 interns worked in the three factories assessed, including 126 at the Longhua facility and 58 in Guanlan. The working hours of interns should not exceed eight hours per day, !ve days per week, and interns should never work seven days straight. Our assessors found that interns worked both overtime and night shifts, violations of the regulations governing internships.
Foxconn provides interns with work-related injury and health insurance, and personal accident and liability insurance is provided by their schools. Under Chinese labor law, interns are not de!ned as employees and legally, no employment relationship exists between the factory and the interns. This means that the general protections of the labor law do not apply to interns, including the social security bene!ts that normal workers receive. While regulations applying to interns exist in Guangdong Province and the Ministry of Education has issued policy regarding interns, their employment status remains vague and represents a major risk.
Industrial Relations
The FLA assessment methodologies examine not only whether policies and procedures exist, but also whether they are being implemented. In assessing the degree of implementation, we consider whether the line sta" have received proper training to carry out the policies and procedures, whether they follow them in practice, and most important, whether the policies and procedures are communicated to all concerned. Communication is a two-way process, and we assess to what degree workers are integrated into the processes that govern the workplace. The more workers participate in those processes, the more they are accepted, trusted and e"ective. Our surveys regularly show that workers’ integration correlates positively with increased loyalty, lower turnover and greater job satisfaction.
We measure the degree of communication, consultation and negotiation, and combine the scores under the heading of Worker Integration. A low score for worker integration typically means that workers were not consulted when policies and procedures that directly a"ect them were designed. Or, if they joined at a later date, the workers were not made fully aware of those policies and procedures. A low score would also indicate that workers are not participating in, or engaging with, committees and processes regulating conditions of work such as health and safety committees, grievance processes and union activities.
Workers had very limited knowledge of the structure, function and activities of the worker participation bodies within Foxconn. When we investigated the industrial relations system at Foxconn we found that even though a union exists, a large majority of workers seemed unaware of its activities and of the collective bargaining agreement. Only 32.7% of the respondents in our perceptions survey stated that workers elect worker representatives, while 20% believe that management elects them. Another 42.3% do not know how the committees are formed. Workers are equally divided on the question of whether worker representatives participate in the factory’s decision-making processes: 12.8% said they don’t; 17% said that they do; and a large majority (70%) did not know. This low level of awareness may be explained, in part, by the turnover rate of workers. Yet the bottom line is that too many workers are not aware
www.fairlabor.org11
of the system of worker representation, which reduces the potential for workers’ integration.
A majority of the members of union committees are drawn from the ranks of management. There are 188 representatives on the main union committee, of which 54 are operators and multi-skilled workers, 29 are line leaders/supervisors and the remaining 105 are engineer or sta! level. This committee sits at the top of a four-tier pyramid of thousands of subsidiary bodies that stretch all the way down to 15,810 action teams at production line level at the Shenzhen facilities (9,447 of them on Apple production lines). There are another 3,258 action teams in Chengdu. Although the Foxconn union holds elections, the candidates are often supervisors or managers nominated by management. While this is a common situation in Chinese factories where unions are present, it does not meet the standards of the relevant ILO Conventions or of the Trade Union Law of China and the Regulations on Collective Bargaining.
The Shenzhen Municipal Implementing Regulations for the Trade Union Law of the People’s Republic of China specify that the Chair, Deputy Chair and committee members should be nominated and elected by union members without interference from management. They also state that the legal representative, managing director, deputy director, personnel department director or any of their relatives should not hold o"ce as trade union chair, deputy chair, standing committee member, committee member or member of the trade union fund audit committee. The intent of these provisions is clearly to avoid the con#icts of interest that might arise when managers represent workers on union committees and to ensure that unions more e!ectively re#ect and represent workers’ needs and interests. Although the Foxconn managers sitting on union committees may not hold the exact positions mentioned in the Implementing Regulations, they are nevertheless members of the management team and not workers.
The Implementing Regulations also instruct local unions to organize and hold workers’ assemblies or congress meetings; ensure that the resolutions adopted are carried out; conduct collective bargaining and oversee the performance of collective contracts; represent union members in consultations with the employer on all matters that a!ect the interests of
workers; and assist in mediation and labor disputes. In addition, the law requires that the union ensures
that workers are made aware of labor laws and regulations. The Foxconn union does publish booklets explaining its role and activities, but our survey data show that these have not raised workers’ awareness or participation rates.
Health, Safety and Environment
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FLA Recommended Actions & Remediation Plan
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Hours of Work
Foxconn has agreed to move beyond compliance with the FLA 60-hour/week standard to achieve full compliance with Chinese law regarding hours of work (limit of 36 hours of overtime per month) by July 1, 2013. This means reducing overtime hours from 80 per month to 36 while protecting worker pay. Foxconn will have to hire and train a signi!cant number of extra workers, build accomodation for them, and develop a compensation package that addresses the income lost through reduced hours.
Compensation
Foxconn has accepted that the policy and practice relating to unscheduled overtime and work-related meetings outside of regular working hours need to be changed. In the future, workers will be paid for overtime in units of 15 minutes and for work-related meetings outside regular hours will be compensated.
Given the concerns expressed by workers about whether wages cover their basic needs, the FLA recommends a follow-up study to document spending patterns and the actual costs of the components of a basic needs wage.
We discussed the issue of unemployment insurance for migrant workers extensively with Apple and Foxconn, and they have agreed to a two-track remedial strategy. The companies will investigate alternative private options to provide unemployment insurance to migrant workers and work with government agencies to expedite the transportability of bene!ts.
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Interns
Foxconn has proposed to adapt its system to ensure that interns enjoy the protections necessary for a productive, healthy and safe educational experience. Given that students !nd internships valuable and that Foxconn is in a position to o"er a signi!cant number of internships at above-market conditions a set of recommendations have been endorsed by both Foxconn and Apple and those can be found in an annex to this document.
Industrial RelationsFoxconn has agreed to develop an action plan to align union activities with the provisions of the Shenzhen Municipal Implementing Regulations for the Trade Union Law, to enhance workers participation in committees and other union structures, to ensure that nominations and elections take place without management involvement and to engage committees in decision making processes. Workers will all receive a copy of the Collective Bargaining Agreement and new workers will receive information about the union and union activities during their orientation process.
Health, Safety and EnvironmentThe key to improved performance in this area is to enhance workers’ engagement in the health and safety committees and to make those more active in the formulation and implementation of policies and procedures. The turnover of workers makes it necessary to refresh the training of workers frequently.
We will continue to make periodic checks on the implementation and review of the standard operating procedures by Foxconn in order to ensure that the workers involved have the appropriate training and personal protective equipment, that the dust concentrations are measured at the appropriate times and remain within safe levels, and that the correct documentation is maintained.
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