Apple, Foxconn, and Corporate Social Responsibility in China

Introduction to Corporate Social Responsibility

Corporate Social Responsibility (CSR) is a concept and a movement that many companies worldwide are embracing. It relates to positive actions that go above and beyond the legal and financial duties of a company. CSR pertains to the social and environmental concerns of the community in which a given company operates, as well as the communities linked to that company. Moreover, when a company reaches out to the community and involves its workers in the betterment of that community — through volunteerism and other acts of generosity — CSR becomes a winning idea for the company's stakeholders, including customers, employees, board members, and shareholders.

According to the European Union's definition of Corporate Social Responsibility, one of the key goals is to "identify, prevent and mitigate possible adverse impacts which enterprises may have on society" (europa.eu). This paper focuses on the seriously adverse impacts related to the Foxconn company, which manufactures technology products for Apple in China. It takes the position that the terrible track record Foxconn has demonstrated cannot be sustained, and that Apple should sever its relationship with Foxconn and bring its manufacturing operations back to the United States.

Foxconn, Apple, and Chinese Employees

Because the internationally accepted values of CSR have been so widely accepted and, in many cases, practiced, it was something of a shock when news stories began to emerge pointing out serious and troubling problems with Foxconn's operations in China. Americans and other technology consumers around the world have been presented with a positive image of Apple products, and Apple was recently named the wealthiest technology corporation in the world — larger than IBM and other major corporations. However, an article in The Guardian (Chamberlain, 2011) reports that a "spate of suicides" occurred at the Foxconn plant in Shenzhen, China. In May 2010, seven young Chinese workers who were building Apple iPads for consumers worldwide took their own lives.

What caused the serious emotional and psychological distress that drove these workers to suicide? And how could a technology giant like Apple allow a subcontractor to treat employees so inhumanely? If these allegations are true, they are unconscionable and outrageous. The article mentions an investigation conducted by two non-governmental organizations (NGOs), which reported that workers at the Foxconn plant were being "exploited" and were living "a dismal life" (Chamberlain, p. 1). In addition, Chamberlain reports that nine Chinese sociologists sent an "open letter to the media" calling for an end to "regimented and restrictive work practices." According to the letter, "fundamental human dignity" was being "sacrificed" for the production of Apple technologies such as iPhones and iPads.

Working Conditions and Worker Suicides at Foxconn

Workers' frustrations at Foxconn were so severe, and the deaths of the young employees so shocking, that anti-suicide measures were installed at the workers' dormitories in Shenzhen. Strong netting was attached to the high-rise apartment buildings to prevent workers from jumping to their deaths (Chamberlain, p. 1).

The Foxconn plants at Shenzhen and Chengdu together employ 500,000 workers, who were instrumental in Apple earning a net profit of approximately $6 billion in the first quarter of 2011. Yet there is a "dark side" to the making of that money. Interviews with Foxconn workers at Apple's production sites reveal how far conditions had deteriorated from any reasonable standard of CSR. "Sometimes my roommates cry when they arrive in the dormitory after a long day," explained a 19-year-old female Foxconn worker in an interview conducted by the Centre for Research on Multinational Corporations (Chamberlain, p. 2).

"It's difficult to adapt to this work and hard to be away from your family," she said. Apple's "code of conduct" states that employees in its supply chain should be treated with "respect and dignity," but the young woman — identified as "Li," not her real name — claimed that she worked "illegally long hours," faced "draconian rules," and earned around $7.00 an hour (Chamberlain, p. 2). Workers at Foxconn are only able to return home once a year. In the crowded dormitories where most workers — the majority between 18 and 20 years old — up to 24 people share a single room, and rules are strict: no hair dryers or kettles are permitted, for example. One young man who broke the rules was "forced to write a confession letter" stating he was wrong and would never repeat the offense (Chamberlain, p. 2). This kind of treatment is a throwback to the worst industrial-era labor practices.

Workers in many cases logged more overtime than Chinese law permits. Chinese law allows a maximum of 36 hours of overtime per month, but investigators found that workers often put in between 60 and 80 overtime hours (Chamberlain). Because the iPad was in enormous demand worldwide and Apple could not produce enough units to keep pace, workers in China began their shifts at 8:30 a.m. and finished at 8:30 p.m. One employee reported that workers went thirteen consecutive days without a day off.

In a second article on conditions at Foxconn (Chamberlain, 2011), the journalist reported that when a worker underperforms, he or she is made to stand up and be "publicly humiliated in front of colleagues." The Foxconn plants projected they would be able to produce approximately 100 million iPads per year by 2012. Foxconn manager Louis Woo admitted that workers did exceed the legal overtime limit but claimed that "all the extra hours are voluntary" (Chamberlain, p. 2). Workers interviewed, however, said that if they refused overtime, they could earn only around $200 a month for a 48-hour workweek — a sum that made refusal effectively impossible.

Conclusion: The Case for Ending the Apple–Foxconn Relationship

Now that there have been a total of 12 suicides at Foxconn plants in China, it is time for Apple to break off its business relations with Foxconn. All investigations conducted thus far reveal very poor — and in many respects cruel and inhumane — workplace policies. Furthermore, since President Barack Obama had pledged tax incentives for companies that returned outsourced manufacturing to the United States, the moment was ideal for Apple to begin ending its association with Foxconn. Yes, hiring American manufacturing workers would cost Apple more, but the public relations value it would gain by demonstrating genuine Corporate Social Responsibility on American soil would far outweigh any modest reduction in profits for its stakeholders.