Apple has placed supplier Wistron on probation, saying on Saturday it would not award the Taiwanese contract manufacturer new business until it addressed the way workers were treated at its southern India plant.
Early findings of an Apple audit in the wake of violence at the Wistron plant in India's Karnataka state showed violations of its 'Supplier Code of Conduct', the California-based tech giant said in a statement.
Contract workers angry over unpaid wages destroyed property, gear and iPhones on December 12, causing millions of dollars in losses to Wistron and forcing it to shut the plant.
Apple said Wistron had failed to implement proper working hour management processes, which "led to payment delays for some workers in October and November".
Wistron on Saturday admitted some workers at the plant in Karnataka's Narasapura had not been paid properly or on time, and it was removing a top executive overseeing its India business.
Apple said it will continue to monitor Wistron's progress on corrective action.
"Our main objective is to make sure all the workers are treated with dignity and respect, and fully compensated promptly," Apple said, adding that it continued to investigate issues at the plant, which is located some 50km outside of the southern tech hub of Bengaluru and assembles one iPhone model.
"This is a new facility and we recognise that we made mistakes as we expanded," Wistron said in a statement. "Some of the processes we put in place to manage labor agencies and payments need to be strengthened and upgraded."
Wistron said it is restructuring its teams and setting up 24-hour hotlines for employees to make anonymous complaints.
"Apple has sent a strong message to its suppliers, telling them unequivocally that they need to adhere to its standards," Neil Shah of Hong Kong-based tech research company Counterpoint said.
"In the long run, it should make suppliers more cautious and likely create fewer such public relations headaches for Apple."
The Apple probation will delay Wistron's smartphone production and hurt its manufacturing push in India where it had committed to invest some 13 billion rupees ($177 million) over the next five years as part of New Delhi's production-linked incentive plan for smartphone manufacturing.
Wistron had plans to make another iPhone model at the Narasapura plant and was planning to hire up to 20,000 workers in a year's time, a source told Reuters previously.
But it could not cope with the rapid scaling up of manpower and breached several laws, Karnataka state officials found after an inspection of the plant following the violence.
The number of workers rose to 10,500 from the permitted 5,000 in a short span of time, the Karnataka factories department said in a report seen by Reuters.
"The HR department has not been adequately set up with personnel of sound knowledge of labour laws," the report of the inspection, which was conducted on December 13, concluded.
Other violations highlighted in the report included underpayment of wages to contract workers and housekeeping staff, and making female staff work overtime without legal authorisation.
The Wistron probation will likely also dent Apple's plans to scale up in India, a market it has bet on to expand its manufacturing base beyond China.
Apple began the assembly of its first iPhone model in India via Wistron in 2017. It has since ramped up assembly operations, with Foxconn in southern India and another supplier Pegatron also set to begin local operations.
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Date of launch: 2014
Founder: Jon Richards, founder and chief executive; Samer Chebab, co-founder and chief operating officer, and Jonathan Rawlings, co-founder and chief financial officer
Based: Media City, Dubai
Sector: Financial services
Size: 120 employees
Investors: 2014: $500,000 in a seed round led by Mulverhill Associates; 2015: $3m in Series A funding led by STC Ventures (managed by Iris Capital), Wamda and Dubai Silicon Oasis Authority; 2019: $8m in Series B funding with the same investors as Series A along with Precinct Partners, Saned and Argo Ventures (the VC arm of multinational insurer Argo Group)
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The more serious side of specialty coffee
While the taste of beans and freshness of roast is paramount to the specialty coffee scene, so is sustainability and workers’ rights.
The bulk of genuine specialty coffee companies aim to improve on these elements in every stage of production via direct relationships with farmers. For instance, Mokha 1450 on Al Wasl Road strives to work predominantly with women-owned and -operated coffee organisations, including female farmers in the Sabree mountains of Yemen.
Because, as the boutique’s owner, Garfield Kerr, points out: “women represent over 90 per cent of the coffee value chain, but are woefully underrepresented in less than 10 per cent of ownership and management throughout the global coffee industry.”
One of the UAE’s largest suppliers of green (meaning not-yet-roasted) beans, Raw Coffee, is a founding member of the Partnership of Gender Equity, which aims to empower female coffee farmers and harvesters.
Also, globally, many companies have found the perfect way to recycle old coffee grounds: they create the perfect fertile soil in which to grow mushrooms.
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Founders: Maaz Sheikh, Danny Bates
Based: Dubai, UAE
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