Apple Inc. (AAPL): Another Labor Review of Foxconn Revealed

Apple Inc. (NASDAQ:AAPL) does not have direct control of its suppliers, certainly, but it know full well that it is the outward face of the brand and the manufacturers of the pieces that go into making the iPhones, iPads and MacBooks that are in the market. As if you have been following us here at Insider Monkey for a few months, you know that we like to learn about Apple and the supply chain, especially since Apple has had issues with China labor laws at one of its main manufacturing partners, Foxconn (also known as Hon Hai Precision).

Periodically, the Fair Labor Association, a labor watchdog group, conducts audits on several companies to check on their labor practices and make recommendations for improving working conditions – and in the case of Foxconn, to ensure the company’s compliance with a country’s labor laws. In an evaluation last year, Apple Inc. (NASDAQ:AAPL) was alerted to many issues at Foxconn plants, especially those that were dedicated to manufacturing Apple devices. Apple CEO Tim Cook vowed to correct some of the issues by this summer, and a recent evaluation came to light this week that seems to indicatesignificant progress but still a few lingering issues.

The last evaluation in 2012 resulted in a whopping 360 recommendations and action items to improve working conditions for workers at Foxconn facilities. These various items  ran the gamut to how interns were handled, having an appropriate number of fire escapes and toilets as well as how to protect workers from heat. The recent assessment noted that Apple Inc. (NASDAQ:AAPL) and Foxconn had completed more than 98 percent of the action items, and Foxconn had met 70 of 76 recommendations that were slated to be in place by the middle of last year. One sticking point, however, has been working hours.

Apple Inc. (NASDA:QAAPL) instituted a policy with suppliers limiting workers to a maximum of 60 hours of work per week, though China labor law mandates a 40-hour week with no more than 36 hours of overtime allowed in a single month. The audit found that in two specific factories, workers were regularly in the 50 to 60 hour range, with a couple of weeks bumped up to 70 hours around the time of the launch of the iPhone 5 last fall. On the bright side, Foxconn employees being unionized jumped from 20 percent of the workforce to nearly 40 percent.

What are your thoughts about the labor situation at Foxconn, and do you think Apple Inc. (NASDAQ:AAPL) should do more? What additional steps do you think the company should take to make more progress with working conditions among its supply chain? We’d love your thoughts in the comments section below.

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