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Time for Apple and Its Taiwanese suppliers to walk the talk

Foxconn’s Zhengzhou factory in China hit the headlines yet again this week, and for reasons that keep haunting all the stakeholders time and again.

In the first week of September 2020, China Labour Watch, a New York-based organization, is reported to have written to Apple CEO Tim Cook about widespread violations of rights of workers at the company suppliers’ China factories.

The complaints included, among others, not allowing workers to have weekly offs, delaying bonus payments, not allowing student-workers to leave factories, and denying workers the right to resign.

Forced on the backfoot, Apple came out with a suppliers’ code of conduct with a promise to ensure that workers in the company’s supply chain deserve a fair and ethical workplace.

The events at Apple supplier Foxconn’s Zhengzhou factory, also known as Apple city because of the scale of operations there, exposed how hollow suppliers’ code of conduct has proved to be thus far. Revolting workers raised pretty much the same sets of issues two years later.

Through the course of the coronavirus pandemic, workers at the factories were made to work in conditions that resemble anything but a fair and ethical workplace. The rumoured delay in bonus payments, as the workers complained in the course of the ongoing agitation, proved to be the proverbial last nail in the coffin. There are video shots of workers fleeing the factory en masse. And that’s happening at a time when the factory was reportedly short of thousands of workers.

What has been unfolding across China’s Apple suppliers’ units is indicative of the deeply-entrenched malaise. Unless that is addressed in time, suppliers’ units may struggle to operate at optimum levels. And that is a headache Apple can ill afford at a time when the world is staring at a synchronised slowdown caused by monetary tightening on the scale not seen in a long, long time.

90% Of Apple Products Are Made In China
According to reliable estimates, China accounts for nearly a fifth of Apple’s global sales and that is quite sizeable. But factories located in China account for nearly 90% of iPhones, iPads and MacBook laptops productions. And that is over reliance on a single location based on ruthless cost calculations. What it clearly illustrates is that an iPhone isn’t just an iconic product. It carries the stains of human rights abuses on an unprecedented scale.

The abusive ways of Apple’s global supply chains are well known for a long time. Yet the guardians of American democracy looked the other way whenever such reports were brought to their attention. Aren’t they complicit? Hasn’t the democracy brigade profited from ruthless operations at Chinese factories while pouncing on even hints of some irregularities elsewhere?

The recent events at China’s factories have given them a golden chance to redeem themselves. Sensing that over reliance on the unbearable authoritarian Chinese ways is a risky proposition, Apple and many such brands had begun a reluctant diversification programme a while ago. They are looking to add democracy premia in their portfolio which only India can provide on such scale. While Foxconn’s and Wistron’s iPhone plants in India, too, have seen labour unrest in the past, the country offers a robust redressal mechanism.

India’s contribution to Apple ‘s total production was a paltry 3% in 2021. It is set to climb to 6-7% this year.

The events like the ones we witnessed in Foxconn’s Zhengzhou factory should serve as a wake up call. And Apple and its suppliers must expedite the process of relocating out of China. That is the only way to ensure that workers get a “fair and ethical workplace”.

The American duplicity, now getting exposed all too frequently and in places which is quite embarrassing, too needs a course correction. Deriving right lessons out of China events may be the moment to introspect and perhaps an opportunity to give the impression of walking the talk.

At a time when the world order in the post-pandemic situation is in a state of flux, the U.S. can’t afford to ignore its iconic brands like Apple to lose the battle of public perception from the events like the one everyone witnessed at Zhengzhou. BQ Prime

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