Apple supplier Pegatron caught illegal student labor in China | GeekComparison

Workers line up for a driving interview before their shift begins at a Pegatron Corp. plant on Friday, April 15, 2016.  in Shanghai, China.
Enlarge / Workers line up for a driving interview before their shift begins at a Pegatron Corp. plant on Friday, April 15, 2016. in Shanghai, China.

Apple has reprimanded one of its largest manufacturers after a Financial Times investigation found thousands of student interns had been working overtime to assemble iPhones in violation of Chinese law.

After contacting the FT, Apple said it had stopped giving “new customers” to Pegatron, the second largest iPhone assembler after Foxconn. However, workers there said the factory was still making new products ahead of the holiday season.

Apple is rushing to make up for production delays caused by the pandemic earlier this year. The latest revelations of supply chain abuse will embarrass the company during its busiest new product launch season in years. The latest iPhone 12 models go on sale on Friday, two months later than usual. At an event on Tuesday, Apple is also expected to unveil new Mac computers.

Pegatron, which is headquartered in Taiwan but has operations in China, is one of Apple’s largest manufacturers and has been producing iPhones, Macs, iPads, and other components for several years. It has also faced recurring allegations about labor conditions from campaign groups such as China Labor Watch.

“Pegatron is not like other factories. They will force you to work overtime: 12 hours a day,” said a former employee, adding that this was to make up for rush orders or layoffs of staff.

Until last month, thousands of student interns had been assembling iPhones at the Pegatron factory in Kunshan and illegally working overtime and night shifts, according to former interns and workers at the factory. Chinese government rules prohibit students from doing internships in factories if the work is not related to their studies.

The alleged forced use of students during the plant’s peak production periods echoes abuses previously found by the FT at Foxconn. Schools and local governments often work together to ensure labor supply for large companies in China.

The latest revelations follow the death last month of a worker in his mid-30s after falling unconscious in a Pegatron dormitory.

“Apple has put Pegatron on probation and Pegatron will not receive any new business from Apple until they take all required corrective actions,” Apple said.

Apple has not explained how it defined “new business” nor what the material impact of the “probationary period” would be on Pegatron. The iPhone maker attempted to place the blame for the abuse directly on its manufacturing partner, saying, “The individuals at Pegatron responsible for the violations have gone to extraordinary lengths to circumvent our oversight mechanisms. Pegatron has now fired the director who directly oversees the program.”

Despite saying it discovered the violations of its supplier guidelines “a few weeks ago”, it only released a statement on the matter after being presented with new evidence by the FT.

Students told the FT they were forced by their school to intern at the Pegatron factory to graduate with degrees that had little relevance to factory work, such as graphic design and computer science.

“We have a rigorous review and approval process for each working student program that ensures the intern’s work is related to their major and prohibits overtime or night shifts. Pegatron misclassified the student workers in their program and falsified paperwork to cover up violations,” Apple said.

Pegatron said, “During [a] recent monitoring program conducted by our client, some student workers at Pegatron Shanghai and Kunshan campus were identified working night shifts, overtime hours and in positions unrelated to their majors, which were inconsistent with local rules and regulations.

Foxconn, Apple’s main iPhone supplier, has historically been associated with labor abuse, following a string of factory worker suicides in 2010. But alleged abuses at Pegatron have also surfaced on the Chinese internet in recent months.

In September, the company apologized after a video went viral on social media of managers at the Kunshan factory throwing employee ID cards on the floor during a routine roll call, forcing workers to bend down to pick them up. Chinese state media also reported on the incident.

The following month, the relatives of Fu Jie, an army veteran in his 30s who worked at the Kunshan factory, protested at the factory gate after his sudden death. In the absence of a public statement from the factory, word of the death spread through word of mouth and social media. Some employees formed a mutual support group on China’s social media app WeChat for those of “the internet’s notorious black factory, Pegatron”.

“Once you enter the workplace, you can’t stop working until lunchtime. Sometimes you get assignments that you can’t complete – 600 to 1,000 [iPhones] per hour — and then they won’t let you have lunch,” the former employee said. Pegatron did not immediately respond to the FT regarding the employee’s claims.

Apple’s annual new product launch is the busiest period for its suppliers in China, who are scrambling to ramp up staff and hours to meet a sudden surge in orders.

The Pegatron factory in Kunshan ordered students to stop working on Oct. 23, according to a message sent to one of the students. He said his class of about 1,000 students was transferred by their teachers to another electronics factory in Chuzhou city.

After being interviewed by the FT via WeChat, a factory worker was alerted by his manager. The incident suggested cooperation between Pegatron and local government agencies with powers to monitor citizens’ communications. Pegatron declined to comment on the oversight issue.

Additional reporting by Qianer Liu in Kunshan and Tim Bradshaw in London

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