Supply Chain
Apple Cuts Ties to 18 Suppliers After Sustainability Code Violations

Apple has terminated its relationships with 18 suppliers to date due to sustainability code violations, according to a new report from the technology company.

The Supplier Responsibility 2015 Progress Report says suppliers were put on probation if “core violations”, such as underage or involuntary labor, false documentation, worker intimidation or significant environmental impacts, were discovered by audits. Suppliers with a core violation are placed on probation until successful completion of their next audit. During probation, issues are monitored closely and if Apple believe that the supplier is not truly committed to change, the relationship is terminated.

The report says audits were carried out at 633 facilities in 2014 and there was 85 percent compliance with its prevention of involuntary labor policy, 95 percent compliance with prevention of underage labor and 92 percent compliance with its working hours policy (this is slightly lower than the 95-percent compliance with its working hours policy reported last year). Overall compliance with labor and human rights policies was 81 percent.

There were 12 active cases of underage labor and four further historical cases where the worker was underage when first hired, the report says. Apple-mandated remediation included the suppliers returning the young worker to school, paying for their education and providing income to the workers matching what they received while employed.

Some 24 facilities were found to be discriminating if a woman was pregnant and 20 facilities were conducting medical tests as a pre-condition for employment. The report says all violators were mandated to immediately cease discriminatory practices and implement anti-discrimination management procedures.

The audits resulted in more than $3.96 million being repaid to foreign contract workers for excessive recruitment fees charged by labor brokers, nearly $900,000 was paid to workers for unpaid overtime and the number of smelters verified as conflict-free doubled.

Last year’s report focused on conflict minerals, where Apple said it would reveal the names and certification status of all minerals suppliers in an effort to eliminate the use of conflict minerals. The company said it enforced its strict Supplier Code of Conduct through 451 audits, training and education throughout 2013.

In his pre-show keynote at the 2014 International Consumer Electronics Show (CES) in Las Vegas, Intel CEO Brian Krzanich said Intel had achieved a critical milestone and the minerals used in its microprocessor silicon and packages are "conflict-free" as concluded by third-party audits or direct validation. On the heels of that announcement, Krzanich extended a challenge to the entire electronics industry to join Intel in becoming “conflict-free.”

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