If the US-China trade war is supposed to be in a ceasefire phase following last week’s main news that trade talks will resume in October, Beijing may not have gotten the memo, because late on Sunday futures slipped and Treasury futures jumped after a Bloomberg report that Apple, and its Taiwanese manufacturing partner, Foxconn, had violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory; the Chinese report also alleged – wait for it – harsh working conditions.
For all those whose heads are shaking, stunning if what they read is true, let us help you – yes, China – that global paragon of equitable labor laws – is accusing the US and Taiwan of substandard labor practices. The claims came from China Labor Watch, which picked a great time to issued its report: just ahead of Apple’s upcoming iPhone reveal slated for Tuesday. The non-profit advocacy group investigates conditions in Chinese factories, and says it has uncovered other alleged labor rights violations by Apple partners in the past.
“Our recent findings on working conditions at Zhengzhou Foxconn highlights several issues which are in violation of Apple’s own code of conduct,” CLW wrote in its report. “Apple has the responsibility and capacity to make fundamental improvements to the working conditions along its supply chain, however, Apple is now transferring costs from the trade war through their suppliers to workers and profiting from the exploitation of Chinese workers.”
CLW said undercover investigators worked in Foxconn’s Zhengzhou plant in China, including one who was employed there for four years. One of the main findings: Temporary staff, known as dispatch workers, made up about 50% the workforce in August. Chinese labor law stipulates a maximum of 10%, CLW noted according to Bloomberg.
The biggest surprise, however, is that China appears to be right. When contacted by Bloomberg, Apple said that, after conducting an investigation, it found the “percentage of dispatch workers exceeded our standards” and that it is “working closely with Foxconn to resolve this issue.” It added that when it finds issues, it works with suppliers to “take immediate corrective action.” Foxconn Technology Group also confirmed the dispatch worker violation following an operational review.
To be sure, this isn’t the first time Apple’s supply chain has faced criticism over poor labor standards for years.