Do you want the good news or the bad news first?
The bad news is that Apple discovered some of its iPhones and iPods were being built by workers who were under their country's minimum employment ages. The good news is that it was Apple's own auditing process that discovered the problem.
As it turns out, some workers employed by factories of Apple suppliers were 15 in countries with minimum age laws of 16 years old. While this wouldn't have been big news in the early 1900s, we are a fully century later and this kind of discovery can mean a lot of bad press for a company with a profile as high as Apple's.
So what exactly does this news mean, and what kind of effect will it have on Apple's reputation? Whether you're an investor or simply an Apple fan, you'll want to keep reading to find out.
Apple's Employment Laws
Apple actually has a set of its own laws, or restrictions, on employment, as noted by redOrbit:
- Employees can work a maximum of 60 hours per week
- At least one day of rest every seven days
- Apple also asked for suppliers to stop wage deductions as a way of punishing employees
Like any good company, Apple is looking to take care of its employees and make sure that it's compliant with the laws that regulate its labor force.
So how did something like this happen?
Apple's Audit Process
It actually wasn't Apple who was doing it, but factories that supply Apple. Apple, Inc., conducts a regular auditing process that includes conducting an onsite audit of some 102 factories. These factories are located in countries including China, Taiwan, Thailand, Singapore, and Malaysia. During one of these audits, Apple discovered that some employees under the minimum age of local labor laws had been working in supplier factories.
As it turned out, Apple's auditing process found out that these employees had been working on iPhones and iPods (and even iPads, as the Post Chronicle notes), but weren't employed anymore. Apple did not disclose the location of the factory(ies) in question.
Underage workers weren't the only violations sniffed out by Apple's auditors. Other violations included non-certified employees disposing of waste improperly as well as illegal recruitment fees being handed out. As it turns out, other factories broke Apple's rule of employees working a maximum of 60 hours per week.
The Good News
While it's always disturbing to hear about underage children working in factories, there is a lot of good news for Apple in this case:
- It was Apple's own auditing process that sniffed out the iPod/iPhone/iPad employment problems, and the fact that Apple worked to discover these problems shows that it takes its own rules to heart.
- The bad publicity that results from these discoveries at least allows Apple to "nip the problem in the bud" by taking them head-on, in their own report (pdf).
- Many people still feel comfortable buying products from a company that has these kinds of standards and audits taking place.
The Bad News
Of course, a story like this can't be all glass-is-half-full. There are some significant problems Apple faces going forward, particularly the treatment of the factories that violated its code of ethics. Since Apple hasn't cut contact or ended contracts with the factories in question, there might be some issues about accountability in the future.
Should you keep buying Apple products? That's for you to decide, but it's important to keep in mind all of the angles of the issue and understand the wrongdoings that took place.