Factory inspections at one of Apple Inc’s major suppliers in China can be viewed as a positive move in the long term, after a series of accidents at the assembly plants, Bank of America Merrill Lynch said.
At Apple’s request, experts from the Fair Labor Association (FLA) began on Feb. 13 to investigate the working environment at the Shenzhen and Chengdu factories of Foxconn Technology Group (富士康集團) — the trading name of the Hon Hai Group (鴻海集團) — that produces iPhones and iPads for Apple.
As part of its independent assessment, the FLA will interview thousands of employees about conditions, covering health and safety, compensation, work hours and communication with management, according to an Apple statement.
“After a series of accidents in Hon Hai’s plants in 2009 to 2010 and concern over toxic manufacturing processes for Apple products, Apple is more cautious on the working environment for employees at its suppliers,” Merrill Lynch said in a recent research note.
“In the near term, it could cause some noise for suppliers, but it is positive in the longer term as the Chinese government is also paying a lot of attention to labor rights and this could decrease the potential penalty, protest and plant suspension issues in China,” the bank said.
Apple disclosed its supplier list for the first time last month, along with a number of upcoming procedures, which Merrill Lynch also interpreted as an effort by Apple to improve the overall working environment of companies in its supply chain.
Hon Hai Precision Industry Co (鴻海精密) declined 1.77 percent to NT$99.7, amid the inspections after the FLA said the company has “tons of issues” that need to be addressed.
Findings and recommendations from the FLA’s initial assessments will be posted on its Web site early next month and similar inspections will be conducted at Quanta Computer Inc (廣達) and Pegatron Corp (和碩) facilities later this spring.
However, the New York Times cited many labor advocates as saying that the FLA has barely made a dent in improving working conditions in more than 1,300 factories in Asia and Latin America that it has inspected.
Taiwanese labor rights advocates have also referred to the current inspections as simply “paint jobs,” saying that the association favors businesses.
The FLA was founded in 1999 by universities, nonprofit groups and American apparel companies.