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The company found worker rights violations in Pegatron. In particular, a number of working students were forced to work overtime and overtime, in violation of Apple’s code of conduct. Employees “made an extraordinary effort” to hide problems. Pegatron has been under surveillance ever since until the corrective action was completed, the US company said in a statement. This means that Pegratron will no longer receive new contracts.
Pegatron is one of the few partners Apple relies on around the world to assemble branded products like the iPhone. Like its biggest rival Foxconn or Hon Hai Precision Industry Co., the Taiwanese company is an integral part of Apple’s global supply chain, which has come under criticism from activists over the years.
Apple said it found no evidence of forced labor in the Pegatron case, but found that the vendor had falsified documents to conceal code of conduct violations. Pegatron fired the manager who oversaw the student work schedule.
“Pegatron misclassified student workers and falsified documents to disguise violations of our Code, including the ability to allow students to work nights and / or work overtime and, in some cases, to perform work unrelated to their specialty. The people in charge of Pegatron have made extraordinary efforts to evade our surveillance mechanisms, “the company statement reads.
Pegatron said the irregularities occurred on its campuses in Shanghai and Kunshan in eastern China and that it has taken “quick steps” to strengthen its procedures and would add compliance with the code of conduct to the values used to evaluate senior management.
“Upon discovering this non-compliant activity, we immediately removed the student workers from the production lines and worked with our customers and third-party experts to make appropriate arrangements for them to return to their homes or schools, with appropriate compensation, along with all the support you need, ”Pegatron said in a statement.
The most valuable company in the world is producing four new iPhone 5G models and has partnered with Pegatron to expand iPhone assembly outside of China.
These efforts are unlikely to be affected by the suspension, which was first reported by local The Paper, as it only covers new activities.
However, Apple’s move offers an opening to rival Luxshare Precision Industry Co.
“Pegatron’s current iPhone business shouldn’t be affected. However, Pegatron risks losing some orders for new Apple phones next year in the Luxshare range, which is set to become a new iPhone assembler in 2021,” said Jeff. Pu, analyst at GF Securities.
Apple has been battling several manufacturers for several years after a suicide bombing at its main partner Foxconn in 2010 sparked outrage over the harsh work environment in which luxury gadgets are made. Soon after, Apple tightened standards and began auditing hundreds of companies that make components for its devices, threatening to close deals with those who defy labor laws.
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