Apple's inability to monitor standards lets Pegatron pay low wages, NGO says

Thu Feb 12, 2015 3:20am EST
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By Michael Gold

TAIPEI (Reuters) - A labor rights group said Apple Inc is unable to effectively monitor standards along some of its supply chain, allowing companies such as Taiwanese assembler Pegatron Corp to keep base wages below local living expenses.

Low costs helped Pegatron win business from Apple, who moved some orders from Foxconn after an increase in labor costs aimed at addressing a spate of worker suicides in 2010, China Labor Watch (CLW) said in a report released on Thursday.

CLW, which based its findings on 96 pay stubs submitted by an unknown number of employees, said low pay compels workers to put in more hours. Its report came on the same day Apple published its 2015 Supplier Responsibility Progress Report, which showed a decline in compliance related to working hours.

"Apple constantly claims that it is monitoring suppliers' compliance with Apple labor standards," New York-based CLW said. "Apple consistently suppresses labor costs by shifting production to the cheapest manufacturer."

CLW did not provide evidence that Apple chose Pegatron expressly because of lower wages. CLW program coordinator Kevin Slaten also told Reuters the report was not meant to draw comparisons across Apple's entire supply chain.

Pegatron assembles Apple devices at two factories in China, as well as other consumer electronics such as phones and personal computers at plants around the world for an array of global clients.

Apple and Pegatron declined to comment on the report. Foxconn, also known as Hon Hai Precision Industry Co Ltd, said its company policy was not to comment on matters related to current or potential customers, or their products.


A customer is silhouetted while entering the Fifth Avenue Apple store shortly after doors opened for iPhone 6 sales in Manhattan, New York September 19, 2014.  REUTERS/Adrees Latif