Apple, Foxconn: We overly relied on temporary workers in China

Above, a recruitment point of Foxconn — an Apple manufacturing partner — in Shenzhen, south China’s Guangdong province in this February 22, 2013 file photo. (AFP)
Updated 09 September 2019

Apple, Foxconn: We overly relied on temporary workers in China

  • Apple said it investigated the percentage of temporary workers among the overall workforce and found it ‘exceeded our standards’
  • Earllier media reports said Apple was considering moving some operations out of China to avoid new US tariffs

SHANGHAI: Apple and manufacturing partner Foxconn Technology on Monday rebutted allegations of lapses in people management levelled by a non-profit monitor of worker rights, though confirmed they employed too many temporary workers.
The response comes after China Labor Watch on Monday issued a lengthy report accusing the two companies of breaching numerous Chinese labor laws, including one barring temporary staff from exceeding 10 percent of the total workforce.
US tech firm Apple relies heavily on Taiwan’s Foxconn and its Chinese manufacturing facilities to produce devices such as the iPhone, the next line of which will be unveiled on Tuesday.
In a statement, Apple said it investigated the percentage of temporary workers among the overall workforce and found it “exceeded our standards.” It said it was working with Foxconn to “immediately resolve the issue.”
Apple did not state whether the excess amounted to a breach of Chinese law. It declined to comment when asked directly by Reuters.
China’s Ministry of Human Resources and Security did not respond to a Reuters fax seeking comment. Reuters could not immediately determine any penalty for temporary employees exceeding 10 percent of the workforce.
Apple also said it discovered interns at a supplier facility had worked overtime at night, violating company policy, and that “this issue has been corrected.” It said the interns worked overtime voluntarily and were properly compensated.
Foxconn separately confirmed over-reliance on temporary workers, known internally dispatch workers.
“We did find evidence that the use of dispatch workers and the number of hours of overtime work carried out by employees, which we have confirmed was always voluntary, was not consistent with company guidelines,” Foxconn said.
It said it “immediately began a detailed process to ensure that all issues were addressed.”
The labor report comes at a time of trade tension between the United States and China that has threatened to upend supply chains across the technology industry with tit-for-tat import tariffs.
Earlier this year, media reports said Apple was considering moving some operations out of China to avoid new US tariffs, with Japan’s Nikkei Asian Review in June putting the figure at 15 percent to 30 percent of production.
In an earnings call in July, Apple Chief Executive Tim Cook downplayed such speculation, stating the vast majority of Apple’s products “are kind of made everywhere.”
“There’s a significant level of content from the United States and a lot from Japan to Korea to China, and the European Union also contributes a fair amount. And so, that’s the nature of a global supply chain. Largely, I think that will carry the day in the future as well.”


Oil prices surge after attacks hit Saudi output

Updated 5 min 29 sec ago

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.