Consumer electronics leader Apple has released its 2014 Supplier Responsibility Report with declarations of better working conditions and tougher standards for those suppliers fortunate to be a part of Apple’s value-chain and supply eco-system. This year’s report is the eighth since annual reporting was initiated by Apple, and by our lens, continues to provide industry leadership and transparency in areas that require continuous industry attention.

Noted highlights of the 2014 report include:

  • Increased efforts directed at social responsibility practices by publically releasing for the first time, more than 100 pages of declared Social Responsibility Standards.
  • The education and training of 1.5 million people on their worker rights, and the weekly tracking of hours worked for over one million workers. Apple indicates that its suppliers have achieved 95 percent compliance with adherence to a standard maximum of no more than a 60-hour work week and with workers voluntarily agreeing to work such hours.
  • A 51 percent increase in supplier audits at all levels of the supply chain amounting to 451 audits in 2013, averaging more than one per day.
  • Continuing to seek out abuses of migrant workers by conducted 33 specific audits requiring certain suppliers to reimburse foreign workers $3.9 million in excessive fees paid to labor brokers.
  • Enrolling 240 supplier participants in an Environmental Health and Safety (EHS) Academy covering 270,000 workers across China and other geographic regions.
  • A declaration that as of January 2014, all active, identified tantalum material smelters in the Apple supply chain were verified as utilizing conflict-free materials.

In numerous previous Supply Chain Matters commentaries, we have both praised and taken Apple to task for certain social responsibility practices across its supply chain.  The latest was the introduction of newest contract manufacturer Pegatron and the unexplained deaths of alleged underage workers.

We all know that Apple has experienced its share of incidents and unsavory practices among its supplier base.  Being chosen or remaining to be a supplier to Apple comes with significant rewards in terms of volume scale and revenue potential. Apple extracts performance and scale capabilities that can tax suppliers and provide motivations to turn a blind eye to certain responsible labor practices.

However, we continue to praise the company for its continued efforts in openly sharing its declared Supplier Responsibity Standards along with taking a visible industry lead in providing education, support programs and enforced supplier accountability. Not all consumer electronics manufacturers follow such standards and that is not good. We were especially impressed with Apple’s approach to Environmental Health and Safety efforts across China, namely identifying a critical shortage of people trained to understand global standards, and establishing a formal 18 month training program to help increase qualified experts in EHS within the region, a program upon which the entire industry benefits.

High tech and consumer electronics manufacturers know all too well about the challenges and pitfalls of low-cost, high volume manufacturing environments that exist across China and other lower-cost regions. While industry associations and collaborations exist on paper, they do not seem to have the open leadership and teeth that Apple continues to demonstrate. If they do, we certainly want to be educated.

More progress is will obviously be required and other high tech and consumer electronics providers need to step-up and demonstrate their open and transparent efforts directed at social responsibility practices.

Bob Ferrari