China Risks Apple’s Reputation by Letting Factories Flout Law

[Joanne98]

July 14 (Bloomberg) -- Jiang Bo says he drove a cement truck for China’s Shenzhen Antuoshan Investment & Development Co. 12 hours every day for seven years without overtime pay.

A national labor contract law implemented Jan. 1, 2008, was supposed to limit work hours and ensure severance pay. A week later, the concrete company asked Jiang to sign a contract setting his base salary at 810 yuan ($119) a month, 45 percent less than he usually earned, to avoid additional overtime costs, he says. Jiang refused and was let go without compensation.

“China’s law is supposed to protect migrant workers and the weak, but this is not the case,” said Jiang, an Anhui province native who was awarded 19,620 yuan by an arbitration panel and settled after a second court appeal got him 2,000 yuan more. “The broth is changed; the medicine isn’t.”

Employers ignoring a law designed to mute labor discontent prompted Chinese workers to file double the number of claims last year with courts and arbiters, the government says. The trend leaves international manufacturers open to potential consumer backlash that may stem from any abuses. U.S. companies such as Wal-Mart Stores Inc. and Nike Inc., which makes about one in every three of its shoes in China, said they’re training suppliers on the rules and inspecting them for compliance.

Beaverton, Oregon-based Nike held workshops with contract factories after the law took effect to ensure they understood its ramifications and Nike’s expectations, said Kate Meyers, a spokeswoman for the sportswear company.

Apple Suppliers

Apple Inc., which relies on Chinese manufacturers for its iPhones and iPod music players, found 45 of the 83 factories it audited last year didn’t pay proper overtime and 23 provided less than minimum wage, according to its 2009 progress report on supplier responsibility. The Cupertino, California-based company required them to adjust practices to ensure correct payments, it said in the report.

Apple has been auditing how its suppliers treat their workforce since 2007, spokesman Steve Dowling said. It has taken steps to improve the situation for migrant and contract workers, he said.

Companies such as Dell Inc. and Hewlett-Packard Co. buy computer keyboards and other components from the Meitai Plastics & Electronics factory in Dongguan city. The plant made employees work 81-hour weeks and also failed to pay overtime, a February report by the Pittsburgh-based National Labor Committee said.

“Conditions are sliding backward because of the worldwide recession,” said Charles Kernaghan, NLC director.
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