As head of operations and Jobs’s second-in-command at the time, Cook had been in a tricky position. While he and his senior team wanted decent factory working conditions, they also needed to keep putting pressure on suppliers. Even before the problems came up, Cook told his managers, “Be as relentless as you can without crossing an ethical line.”
Keeping that balance was difficult. In meetings where production schedules were on the agenda, Cook himself often made it clear that he didn’t really care how the suppliers made their deadlines and delivered the projected quotas.
“They aren’t working on Sunday,” he’d say. “Why aren’t they working on Sunday?”
The scandal threatened to taint the aura of benevolent cool that Apple had so carefully cultivated. They were supposed to be the good guys. Not the evil empire.
Cook launched an investigation into the charges. An audit team of members from the human resources, legal, and operations groups inspected Foxconn’s Shenzhen factory and interviewed one hundred workers—randomly selected line workers, supervisors, executives, security guards, and custodians. The team reviewed thousands of personnel files, payroll data, time cards, and security logs. A report issued several weeks later said the auditors collectively spent more than twelve hundred man hours and covered more than one million square feet of facilities.
To Apple’s relief, the situation was not as awful as had been reported in the Daily Mail. The audit team found that Foxconn’s employees worked longer hours than the sixty-hour work week permitted in Apple’s code of conduct. Sometimes they also worked more than six consecutive days, breaking Apple’s rule that they must have at least one day off each week. Two buildings that had been converted into dormitories during a period of rapid growth contained too many beds and lockers in one open space. In interviews, two employees told the team that Foxconn supervisors had disciplined them by making the employees stand at attention. But the team had found no evidence of forced labor. Most of Foxconn’s dormitories, the team concluded, provided adequate living conditions.
The truth was likely somewhere in between the appalling accounts in the Daily Mail and the more optimistic report from Apple’s team. The company had probably done what it could to ensure the accuracy of its investigation. Working hours and overtime reported in interviews were corroborated with line shift reports, badge-reader logs, and payroll records. But the team couldn’t have been fully briefed on the situation by the workers. Part of the problem was that the employees would have had a much lower expectation about the working conditions than Westerners were accustomed to. Many of the line workers were unaware of their rights.
Chinese culture also didn’t permit the level of frankness found in the United States. To Foxconn’s employees, Apple officials were authority figures, important customers, and outsiders. Even if they promised no recriminations from Foxconn managers, Apple’s best intentions were short of a guarantee. The more senior interviewees would have felt an ingrained responsibility to the organization to put on their best face. Employees may have aired some dissatisfaction, but they would not have been completely open.
For a while, Apple tried its best. It vowed to ensure compliance with its code of conduct and audit all of its final assembly suppliers by the end of the year. The company also retained an auditing and research organization and created a small internal team to manage supplier responsibility. That team took apart the code of conduct and rewrote it with more than a hundred specific requirements, including maximum occupancy for dorm rooms and the square footage of personal space each worker should have. Suppliers not only had to comply; they also had to prove they weren’t in violation and show evidence that they had a management process in place to stay compliant. Where there were violations, Apple helped suppliers fix them.
The work required patience. Some suppliers, who threatened to raise prices to cover the extra costs associated with making improvements, had to be reminded about the code of conduct they had signed.
Initially, the team reported directly to the operations number two, Jeff Williams, and met weekly with Cook. But as their priorities conflicted with the grail of production schedules, enforcement appeared to have lapsed.
During this period, the company did make one significant improvement in labor conditions—it put a stop to steep broker fees that many workers paid middlemen to get jobs at Foxconn. In a modern form of indentured servitude, people had been paying up to two years’ salary plus transportation costs if they were traveling from afar. Apple ended the practice by imposing a hefty fine on suppliers who permitted this practice.
The public soon forgot about the factory workers. As far as most of them were concerned, iPods materialized magically in stores and on their doorsteps. Apple had long encouraged this perception by excluding details about the assembly process from its product narratives.
Still, in mid-2008, the world was reminded of the hands that built their treasured phones when photos of a young factory girl on an iPhone assembly line most likely in Shenzhen surfaced on an iPhone 3G purchased in England. Wearing a pink-and-white uniform and a cap tucked behind her ears, she could be seen bending close to the device and faintly smiling. Her gloved hands made the peace sign. The girl, who came to be called “iPhone Girl,” became an overnight sensation when the photos were posted anonymously on Apple fan site MacRumors.
“It would appear that someone on the production line was having a bit of fun,” wrote the person who had bought the phone and shared the images. “Has anyone else found this?”
The posting immediately drew more than 360 comments as readers speculated on the girl’s age, circumstances, and working conditions. “That’s nice that at least they have some fun in the drab of assembling technology,” wrote one reader. “She looks about 12/13 to me! I don’t think Stevo is going to be impressed at all. . . . It looks a little bit too much like child labour,” another said. Some wondered whether she would get fired. The Chinese press called her “China’s prettiest factory girl.” Apple declined to comment, but a Foxconn spokeswoman told a reporter that workers testing the device had probably forgotten to delete the photos. According to an official, iPhone Girl had not been fired.
Around the same time, activists learned that dangerous metals from electronics manufacturing plants were polluting China’s rivers and poisoning its people.
Given that half of the world’s computers, cell phones, and cameras were made in that country, the damage was devastating. Wastewater containing copper, nickel, and chromium from plants making printed computer circuit boards was eating at people’s bodies. The manufacture of batteries and other power supplies also emitted lead, causing lead poisoning and high blood pressure among people who lived nearby. The heavy-metal levels in some places were so high that sewage treatment plants couldn’t treat the water adequately before it was used again. In Guangdong Province, where Shenzhen lay, the government had found that its rivers had discharged more than twelve thousand tons of heavy metals and arsenic into the sea in 2008.
The offenders were Chinese, but they were making products for the rest of the world. The companies working with them needed to be held responsible. After two years of research, a coalition formed by the well-respected Beijing environmental activist, Ma Jun, sent a letter in spring 2010 to the chief executives of twenty-nine companies. The notice informed them of the environmental and safety violations. The recipients included almost every top brand, from Japanese companies like Panasonic and Sony to Europe’s Nokia, Siemens, and Philips, to U.S. companies like Intel, Motorola, Cisco, and Apple. No one got a pass. Not even Chinese companies like Haier, Lenovo, and BYD.
After a few months, all of the other companies except for one responded in varying degrees to the coalition’s entreaties. Apple answered with a stony silence. The company refused to engage in any discussions even when Ma provided details about hazardous waste violations and toxic waste poisoning at a factory associated with iPhone touchscreen supplier Wintek. Apple’s reasoning: Its long-term policy was
to not disclose the supply chain. Though the company later acknowledged the case in an annual sustainability report, it told NGOs at the time that they could not find a link between Apple and the accused supplier.
This evasiveness drew Ma’s attention.
“I could not accept that argument,” he recalled. “If their operations—either manufacturing or sourcing—have affected other people’s interests, no one should be allowed to say, ‘I made a policy not to talk and you should leave me alone.’ ”
Ma took a closer look at the situation and found appalling environmental abuses among companies Ma called “suspected Apple suppliers.” Particularly egregious was the use of a toxic substance called n-hexane. Suppliers were using the chemical because it did a better job than alcohol of cleaning parts such as touch screens, but n-hexane damaged the nerves, led to numb limbs, and dulled the sense of touch. One account, purportedly by a nineteen-year-old worker at a sub-subcontractor, was particularly heartbreaking.
“Around October 2009, it was a busy time for our factory, except that the hands of all of the workers felt numb when they washed them or put them in water,” she wrote on a blog that Ma mentioned in a report. “December came and my coworkers were starting to shake when they walked, and I couldn’t believe why this all was happening so suddenly. What’s more, one after another of my coworkers would ask for leave and each time they left, it was for a long time. In January 2010, it happened to my own body, and by the time I realized it was already too late.”
The writer, Xiao Zhan, described how she lost her strength and her ability to run. She was finally admitted to a hospital, where she had daily IV treatments, injections, and physiotherapy. When she was released nearly a year later, she was out of a job and still in need of treatment. She had already spent all the money she had saved from working overtime to make Apple’s products. Instead of sending money to her family, she had become dependent on them.
At the Wintek-affiliated factory, workers who had gotten sick were encouraged to leave for a one-time payment of $12,000–$14,000 if they signed a form absolving the company of any responsibility for their welfare.
In early 2011, Ma’s group released his detailed findings to the public. Titled “The Other Side of Apple,” the report was accompanied by a shocking video that showed some of the sick workers discussing their symptoms in between clips of Steve Jobs touting the magnificence of Apple’s products. Altogether Ma described eleven cases of supplier negligence at suspected Apple suppliers. They mentioned the suicides at Foxconn as well as a practice at another company, where female workers had to undo their belts and submit to a body inspection by a male guard before leaving the factory, to make sure they hadn’t taken anything with them. The practice had come to light after a worker posted about it anonymously online:
“Watching a younger girl stand on the inspection platform with her pants suddenly falling down and run away as everyone laughed at her, my eyes filled with tears.”
Apple may not have been directly responsible for these violations, but they were as culpable as the suppliers who created these conditions. “How has a company with such a poor record for such a long time been able to successfully maintain its near perfect, corporate, socially responsible image?” Ma’s report asked, accusing Apple of hiding the true state of its supply chain behind its veil of secrecy. If true, the hypocrisy was particularly egregious considering that Apple’s board member Al Gore championed environmental causes and had won a Nobel Peace Prize for his climate protection efforts.
Ma’s group wasn’t the first to address occupational safety issues and labor conditions, but his reports were particularly powerful because they were backed up by solid data. Ma himself was a former investigative journalist, whom Time magazine had named one of the top one hundred influential people in 2006. He was not only respected; he also knew how to present his story to make the biggest impact on the world.
Apple maintained its code of silence.
On May 20, 2011, not long after Ma’s group released its damaging report, a polishing workshop at a new Foxconn factory in southwest China exploded when a buildup of aluminum dust in the air ducts ignited. Workers in a cafeteria nearby saw black smoke pouring out the shattered windows. Three workers died, and fifteen more were injured. The 250-acre facility had been expected to be the largest supplier of the iPad 2s. Built in just seventy-six days, the plant had begun operating before it was ready. Some of the workers were polishing the assembled devices in the cleaning stage at the end of the production process without adequate training. Wearing masks and earplugs, they worked feverishly without realizing the dangers of the aluminum dust that found its way into their hair and faces. When Wall Street analysts learned about the accident, their main concern was not the deaths of the three workers, or the possible poisoning of the others. What the analysts wanted to know was whether the explosion would delay iPad 2 production.
Ma continued to turn up the heat on Apple. Five months of investigations led to “The Other Side of Apple II.” The forty-eight-page report detailed ten case studies of environmental violations at suspected Apple suppliers. In another video, Ma took a subtle swipe at consumers’ ignorance about the conditions under which their products were made.
“Perhaps you love Apple. Perhaps you use Apple’s products. Perhaps you long to own an Apple product. Are you aware of the story behind Apple?” it asked before showing viewers a milky-white channel of a river and copper- and nickel-infested waters near a suspected Apple supplier. Near another plant, a small boy complained of noxious odors, chest pains, and dizziness. Villagers knelt in front of the camera and clasped their hands as one woman, who already had her stomach removed due to cancer, clutched a plastic bottle with water from a nearby stream.
“We beg you, help us!” they pleaded. “Help us ordinary people!”
Finally Apple broke its silence. The company sent an email to Ma that acknowledged his report, pointed out a few errors where he had incorrectly identified a company as an Apple supplier, and asked for a phone call with the activist. Apple was up in arms over the report tarnishing the company’s image. Cook’s deputy, Jeff Williams, wanted to fly to Beijing immediately to talk to Ma to try to rein him in.
“Who is this person?” he wanted to know. Apple ultimately decided they needed to build a relationship with Ma rather than try to control him.
So began delicate conversations between Ma and Apple. Progress was slow, but at least they were talking. Apple demonstrated an interest in understanding Ma’s group and its method of research. “Those meetings were candid meetings,” said Ma. “Sometimes it was not easy. It was not always very comfortable.” It was unclear how much of Apple’s sluggishness had been affected by the leadership vacuum while Jobs was sick, but a few weeks after the former CEO’s death, there was a breakthrough. By then, Ma had enlisted the help of the Natural Resources Defense Council, a prominent Washington, D.C.–based nonprofit group that works with corporations to protect the environment. In late October, Bill Frederick, an Apple operations executive, got in touch with NRDC’s Linda Greer, an environmental toxicologist who ran the supply chain project. Frederick was a former IBM executive and a logistics expert. He had a reputation for being slightly more laid-back than Cook, but when he confronted a problem, he was just as single-minded.
Frederick admitted that environmental safety had been less of a focus but he told NRDC that the executives were starting to brainstorm some methods on how to keep better tabs on their suppliers. When Frederick asked for a meeting with NRDC, the organization agreed on the condition that Ma also be invited.
At the meeting, Ma, who spoke English fluently, did most of the talking, but Greer provided context. “I was the English-to-English translator,” she joked. The meeting lasted for five hours. Some of the executives were defensive at times, and Apple continued to withhold details such as the discrepancies that they found between their audit and Ma’s investigation. But they also acknowledged that they needed to be more transparent. At th
e end, the company agreed to do its own research to confirm Ma’s findings and then to address whatever problems they found.
In Greer’s assessment, Apple was working harder than most to rectify the situation. “They’re in the top percentile,” she said. “They’re still not on top of the game, but none of them are.” She hoped that Apple would become a role model for other companies. Ma also felt that the company was changing for the better.
That December, just as the negotiations between the company and the activists were starting, another explosion ripped through a factory operated by one of Apple’s contract manufacturers.
The circumstances were eerily similar to the tragedy that had killed the Foxconn workers less than a year before. The explosion occurred inside another brand-new factory owned by a subsidiary called Pegatron that was gearing up for mass production of back-panel parts for the iPad 2. Just as in the earlier incident, aluminum dust had ignited in a section of the building where workers polished iPad cases. The explosion had been triggered during a test run, held on a weekend afternoon that December. Eager to win more of the corporate giant’s business, Pegatron had been pushing hard to get the new production lines moving. The accident injured sixty-one workers, putting twenty-three of them in the hospital. Once again, the explosion demonstrated the complexity of the situation and the costs of Apple’s relentless pressure on its overseas suppliers.
Finally the Western media began paying closer attention.
In early January 2012, a few weeks after the second explosion, public radio’s This American Life aired an hour-long program about the abysmal working conditions of Apple’s global supply chain. A long segment was reported and narrated by Mike Daisey, a performer best known for his one-man stage show, The Agony and the Ecstasy of Steve Jobs. In the public radio piece, titled Mr. Daisey and the Apple Factory, Daisey recounted his experiences touring Foxconn’s factory in Shenzhen and speaking to underage and injured workers. His anecdotes were heartbreaking, especially when juxtaposed with Apple’s rampant profits. In one scene, Daisey told the story of showing his iPad to a man whose hand had been mangled making the device.
Haunted Empire: Apple After Steve Jobs Page 14