Introduction
Apple’s annual “Supplier Responsibility Progress Report” outlines supplier standards in four key areas. Those key areas include accountability, labor and human rights, empowering workers, and environment, health and safety (Apple Supplier Responsibility 2016 Progress Report). According to Apple’s 2016 Supplier Responsibility Progress Report, the standards outlined in each of the categories are designed to ensure working conditions are safe, employees are treated equitably, suppliers are following environmental laws, and practices that do not fall outside legal requirements. Each year, Apple conducts an audit of supplier facilities to identify areas for improvement.
The changes that Apple has made to its code of conduct include a labor hour limit of sixty hours per week, with a required day off after seven days of continuous work. In terms of environment, health and safety, Apple created a program initiative to improve the amount of carbon emissions amongst its suppliers. The aim of the program is to implement at least two gigawatts of clean energy by the year 2018 (Apple Supplier Responsibility 2016 Progress Report). For the accountability category, Apple has increased its standards on dispatch labor, enforcing China’s soon to be implemented law that dispatch labor cannot make up more than ten percent of a supplier’s workforce. In terms of empowering workers, Apple implemented an educational partnership with Dell, Stanford University and the Chinese government to help student interns working with the supplier chain to increase their skill sets. The educational partnership results in official credentials for those interns that participate (Apple Supplier Responsibility 2016 Progress Report). Some analysts criticize Apple for not being able to enforce its code of conduct standards as strictly as the company reports. Others stand by the notion that Apple’s code of conduct is responsible for creating better working conditions and improving the environment.
Within its labor and human rights category, Apple has set the limit of weekly hours suppliers’ employees can work to sixty. In addition, employees that are scheduled to work seven days in a row must then receive at least one day off before being scheduled for a subsequent day. Apple’s stipulations do not indicate whether employees must receive additional time off if they are consistently scheduled for seven days in a row over a longer period. In prior years, Apple has come under additional scrutiny for poor working conditions within its supplier network. One of the factors that has led to those poor working conditions was excessive labor hours (Moren, 2014). Although sixty hours may not meet the definition of “excessive” by some, a sixty-hour work week is still above the average American work week of forty to fifty hours. Some analysts have further criticized Apple for this code of conduct stipulation since Chinese labor laws cap the work week at forty-nine hours (Nova & Shapiro, 2014). Give this fact, it would appear that Apple’s code of conduct stipulations are likely making provisions for suppliers that fall outside the rule of Chinese labor laws. The problem is with potential misinterpretations by suppliers that are uncertain of which stipulation to follow – that of Chinese labor laws or that of Apple’s code of conduct.
In light of this fact, Apple’s code of conduct language can do a better job of explaining its work week labor hours stipulation to suppliers. First, the code of conduct should begin with a statement indicating that local labor hours are to take precedence over Apple’s weekly labor hour limit. Second, the code of conduct should explain that barring any conflicts with local labor laws, suppliers should not schedule their employees more than sixty hours per week. In addition, employees should not be scheduled more than seven consecutive days.
For the environment, health and safety category, Apple’s code of conduct does a fairly decent job of indicating the company is in the process of working with suppliers to reduce carbon emissions. Apple’s statements also indicate when the company hopes to reach its goal and gives a good overview of the program’s objectives. Yet, Apple has had recent problems with suppliers that have violated its environmental code of conduct stipulations. In 2015, the company had to terminate relationships with eighteen suppliers for these types of violations (Green, 2015). While eighteen may not seem like a large number, termination activity can end up having a significant impact on Apple’s supply chain operations. Disruption in the availability of parts, assembly and production can have a negative effect on consumer perception of Apple. A disruption in the supply chain will also negatively impact Apple’s retail locations, including third-party retail locations.
Consequently, more detail needs to be added to this section of Apple’s code of conduct. In addition to providing suppliers with an overview of the environmental initiative’s goals, the code of conduct needs to detail how the initiative will impact suppliers. In other words, what are suppliers required to change at the facilities level? Does equipment need to be upgraded or changed out completely? What type of equipment will need to be upgraded and changed out, and will this have an effect on other equipment and labor processes? The details should also include expected timelines for each geographic area and indicate what (if any) financial contributions Apple will be giving to suppliers to make these changes.
Within the accountability category, Apple has increased its enforcement of limiting dispatch labor to ten percent of the workforce. This is in response to upcoming changes in Chinese labor laws, which Apple spells out in its code of conduct. This could potentially confuse suppliers that do not operate within China. All suppliers need to know how this change directly impacts operations. The code of conduct should indicate which suppliers need to adhere to this stipulation, a timeline for implementation, and what dispatch labor entails. Apple’s code of conduct does state that dispatch labor is defined as those workers who are contractors and are not considered direct employees of the supplier. Apple’s code of contact should state how the company will be auditing this and whether suppliers are allowed to phase out contractors if the supplier’s percentage is too high.
In the empowering employees category, Apple’s code of conduct mentions that the company has implemented an educational partnership for interns. Yet, the details given within the document do not spell out whether this program is required or optional. Furthermore, the code of conduct does not provide details on how the program works. In other words, if a supplier is interested in participating there is no recourse as to developing an action plan. The code of conduct should state how suppliers can hire interns from the program, whether the interns are restricted to specific working hours, the rate of pay (if any) for the interns, and whether existing employees can participate in the educational program. In addition, Apple’s code of conduct does not mention any associated costs with the program, which would be helpful to state.
Conclusion
Apple’s code of conduct for suppliers covers four broad categories consisting of the environmental impacts suppliers have, the impact suppliers have on working conditions, employee engagement/empowerment, and accountability. While Apple’s code of conduct does an adequate job of spelling out the big picture for suppliers, the company’s documentation is lacking in terms of details and implementation requirements. The company should also consider unclear or conflicting messages, and provide additional detail to avoid any confusion.
References
Apple Supplier Responsibility 2016 Progress Report (2016). Retrieved from
http://images.apple.com/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf
Green, Will (2015, February 14). Apple ‘terminated relationships’ with 18 suppliers due to
sustainability code violations. Supply Management. Retrieved from http://www.cips.org/supply-management/news/2015/february/apple-terminated-relationships-with-18-suppliers-due-to-sustainability-code-violations/
Moren, Dan (2014, February 13). Apple’s 2014 supplier report: Better working conditions, fewer
conflict minerals. Macworld. Retrieved from http://www.macworld.com/article/2097723/apples-2014-supplier-report-better-working-conditions-fewer-conflict-minerals.html
Nova, Scott, & Shapiro, Issac (2014, March 25). Assessing the reforms portrayed by Apple’s
supplier responsibility report. Economic Policy Institute. Retrieved from http://www.epi.org/publication/assessing-reforms-portrayed-apples-supplier/
