Supply Chain

Apple Finds 44 Core Violations at Suppliers

The company's expanded audit finds the number of serious violations of its code of conduct doubled in 2017 but overall compliance is improving.
Matthew HellerMarch 8, 2018

Overall compliance with Apple’s code of conduct for suppliers is improving but the number of serious violations of its policies doubled in 2017, the company reported.

For its latest Supplier Responsibility Progress Report, Apple audited 756 suppliers spanning 30 different countries, 197 of them for the first time.

The audits found that the number of under-performing suppliers, who scored less than 59 points on Apple’s 100-point scale, dropped to just 1% in 2017, a significant improvement from 14% in 2014. Exceptional or high performers scoring 90 points or more accounted for 59%, up from 47% in 2016.

“Apple’s efforts to raise standards are having a dramatic impact,” the company said in a news release.

But on the debit side, Apple uncovered 44 “core violations” — double the 2016 total — with issues ranging from falsifying working hours to harmful environmental practices.

In three different cases, employees were forced to give up large portions of their pay to keep their jobs. Workers in the Philippines were charged a total of $1 million at a contractor facility. Apple has since ordered the money be paid back to employees.

Compliance with Apple’s 60-hour work week fell to 94% of suppliers from 98% in 2016. The company said it uncovered 38 cases of falsification of working hours data in 2017, up from nine cases the year before.

Apple has been conducting the supplier audits for 12 years. Those with violations are given a probation notice and, if corrections are not made, Apple will consider cutting ties with the non-compliant contractor.

The company said the increase in serious violations reflects the addition of number of new suppliers in 2017 and the fact that it started tracking the working hours data of 1.3 million supplier employees, 30% more than in previous years.

“We’re committed to raising the bar every year across our supply chain,” Chief Operating Officer Jeff Williams said.

Apple also said its efforts to create a greener supply chain “resulted in significant progress in 2017. All iPhone final assembly sites around the world have now been certified as zero waste to landfill.”