Smartphones Assembly

Apple Puts Pegatron on Probation Over China Labour Abuse

Pegatron misclassified student workers and had them working night shifts and over-time in violation of Apple's rules

Apple has suspended future business with iPhone assembler Pegatron pending corrective actions, after the Taiwanese company was found to have concealed violations of labour rules for students employed at its factories in China.

For years, Apple has worked, and at times struggled, to uphold labour standards across its vast electronics supply chain in China. The company said it had made the decision because the Taiwanese company, Pegatron, had violated its code of conduct by allowing student labourers to work night shifts and overtime and do work unrelated to their fields of study, and had then falsified documents to cover it up.

“The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms,” Apple said in a statement.

To meet grueling deadlines, factories in China sometimes recruit labour from local technical schools. Strict guidelines are supposed to limit how long and when such employees can work, but in practice, rules are often ignored and other abuses are common. In some cases, students have said they were forced to do monotonous assembly work rather than the more technical tasks they were studying.

Pegatron, a major assembler of the iPhone that has factories across China, has been accused of a number of labour and environmental abuses over the years. Apple said it would not give the contractor any new business until it took corrective measures, and noted that a Pegatron executive in charge of the student employment program had already been fired.

The rebuke, rare for such a high-profile supplier, underscored a challenge facing Apple as it seeks to address abuses in its supply chain, which sprawls across hundreds of factories across China and increasingly the world. While Apple can make or break the smaller companies that make the innards of its iPhones and put them together, few have the scale to assemble large numbers of phones quickly, leaving Apple reliant on assemblers like Pegatron and its larger Taiwanese rival, Foxconn.

In a statement, a Pegatron spokeswoman said:

“upon discovering the violations, the company immediately removed the student workers from production lines and worked to “make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care.”

She added that the company was undertaking an audit to ensure its labour standards were upheld.

The suspension for Pegatron, while probably temporary, could further open the door for Luxshare, a smaller Chinese manufacturer that has been working to expand its role in the Apple supply chain. This year,

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