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Apple is a global corporation which is well known for its practices in sustainability and ethical behavior. However, this reputation was not built easily. Apple had to invent and re-invent their supplier conduct and sustainability practices over the years to gain this reputation.
Today, Apple’s Supplier Code of Conduct ensures that all suppliers create working conditions which are safe, respect workers and care for the environment (Apple, 2016). Their strict practices ensure that suppliers obey the rules, even if it is above local laws.
Apple has a Supplier Responsibility Standards code that all suppliers have to meet. The document gives details of code of conduct and standards that suppliers have to abide by, despite their local laws, own policies, cultural issues or unique business procedures.
Many of the supplier conduct issues have come to haunt Apple in the recent past. For example, Foxconn – one of its suppliers was known to utilize services of underage workers, forced labor practices, resulting in suicides.
Although Apple has very robust auditing procedures, suppliers have been facing such challenges for a long time. One of the methods used by Apple is the training of its suppliers and employees.
Millions of employees of suppliers have undergone this training conducted by Apple. For instance in 2013, Apple conducted more than 450 audits and in 2015, 650 audits covering 16 million workers across 25 countries. Apple tracks the violations in the areas of discrimination (any kind), protection of juveniles, high work hours and environmentally harmful practices.
Apple forces its suppliers to abide by company rules and comes down heavily on suppliers who practice underage hiring. For example, Apple found in 2014 that some suppliers had violated the code.
They made immediate changes to the Supplier Responsibility Standards code. Since there were around 20 cases of underage labor practices, Apple forced the suppliers to take the young workers back to school, pay for their education and also give them an income as if they had been employed by the supplier.
Apple’s practices on underage workers have yielded results (Keller, 2016). The total number of supplier facilities which was seen as violating the code fell to 1. Apple’s futuristic training and awareness building of the supplier code and its punitive measures have created a good impact to control violations pertaining to underage workers.
Apple uses education, training and awareness building to engage with suppliers and employees to highlight issues pertaining to supplier responsibility. The 2015 report states that many suppliers were made to go on probation in cases where they had violated the code pertaining to underage labor.
In case a supplier is found guilty, the probation period is when Apple monitors progress at the supplier’s workplace. In case, the supplier continues to default and violate the code, Apple terminates the relationship.
After the incorporation of this code, Apple has terminated contracts with 18 suppliers (Green, 2015). Due to its changes to the policy on a continual basis, Apple has seen good results in its audit reports.
Out of 633 facilities in 2014, the results showed 85% compliance rate pertaining to involuntary labor policy, 95% on underage hiring and 92% compliance on fair hours. This clearly reflects the success that Apple has had with regard to their policy on underage workers. Another area where Apple has a core focus is with the environment and workplace conditions. Since 2010, Apple has been improving its supply chain, primarily to eradicate the use of minerals from conflict zones.
Today, all of Apple’s 242 units manufacturing tin, tantalum, tungsten and gold are audited by third parties for environmental damage. In the most recent report (Clover, 2016), Apple reported that all the smelters of the metal tantalum were conflict-free. Apple is also taking steps to ensure that all other suppliers who make tin, tungsten and gold also become conflict-free.
In order to show its commitment to the environment, Apple, in the 2016 report has given the list of smelters and refiners so anyone can verify the data. This ensures not only transparency but forces accountability on the suppliers.
Apple is also pushing its suppliers to desist using hazardous metals and also provide renewable energy for its facilities and data centers. Apple mentions in its 2016 report that it forced all its smelter and refiners suppliers to undertake the third party audit to ensure that the minerals are conflict-free.
In this process, more than 35 supplier contracts were terminated since they would not adhere to the code. Even in a country like Indonesia, Apple has managed to improve the conditions of workers in tin mines (Clover, 2016).
Working with the Indonesian government, Apple carried out research in 2015 and formulated a five year strategy on best practices in mining of tin. Apple is also documenting and working on a standards document which will help other buyers to buy tin from safe sources, globally. Apple has forced the Indonesian government to rethink its policies on the mining of tin and the environmental impact.
Compared to the year 2014, Apple has managed to reduce carbon emissions by 13,800 metric tons and also safely processed 73,700 metric tons of waste. Apple has also been involved in a Clean Water Program since 2013 which has helped save more than 3.8 billion gallons of water.
Apple realizes that supplier facilities are key to limit environmental damage. With its strict environmental guidelines and policies, it works closely with suppliers to reduce greenhouse gas emissions and pollution. Reducing their suppliers’ carbon footprint is a key initiative at Apple (Apple, 2016).
As a process, old and inefficient heaters and other systems are replaced. Waste heat is redirected for use as per the energy efficiency program. Apple has recorded significant improvements in reduction of carbon emissions, as detailed earlier, in around 13 manufacturing sites (Apple, 2016).
Apple also works on cleaner and renewable sources of energy. The Clean Energy Program launched in 2015 helps reduce carbon emissions close to 3/4th of the total. Apple is working in China to manufacture 2 gigawatts of clean energy. One of the suppliers – Foxconn is slated to create 400 MW of solar energy by the year 2018. This power will be sufficient to take care of the production of iPhone at the Zhengzhou facility (Apple, 2016).
Apple also launched a waste diversion initiative in 2015. This is operational in all its 22 factories and assembly units. It forces suppliers to reduce, reuse and recycle materials. Guanlan has managed to become a 100% waste diversion facility in January 2016. Due to its efforts in Supplier Responsibility, in 2015, Apple won the top manufacturer/brand, awarded by the Institute of Public and Environmental Affairs (IPE), as a testament to its success in Supplier Conduct Policies (Apple, 2016).
References
Apple. (2016). Supplier Responsibility – 2016 Progress Report. Apple.com.
Retrieved from: http://images.apple.com/supplier-responsibility/pdf/Apple_SR_2016_Progress_Report.pdf.
Clover. J. (2016). Apple’s 2016 Supplier Responsibility Report Outlines Milestone on Eliminating Conflict Minerals. SupplyChain247. Retrieved from:
http://www.supplychain247.com/article/apples_2016_supplier_responsibility_report_outlines_eliminating_minerals.
Green. W. (2015). 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/.
Keller. J. (2016). Apple's 2016 supplier report focuses on workers' rights and the environment.
iMore.com. Retrieved from: http://www.imore.com/apples-2016-supplier-report-focuses-
workers-rights-and-environment.
