Tech giant Apple has reportedly suspended new business with Taiwanese iPhone assembler Pegatron Corp. following the discovery of labor violations in a “student workers’ program.”
Bloomberg reports that tech giant Apple has temporarily suspended new business with its iPhone assembler Pegatron after discovering labor violations at a student workers’ program. Apple is reportedly taking a strong stance on the issue and working to clean up a Chinese-based production chain that has long been accused of worker abuse.
Apple claimed that several weeks ago it discovered that the Taiwanese manufacturer misclassified student workers and allowed some to work nights and overtime which violates Apple’s Supplier Code of Conduct. Employees reportedly “went to extraordinary lengths” to cover up the violations. Pegatron has since been placed on probation by Apple until corrective action is completed.
Pegatron is just o be of a handful of partners that Apple relies on to assemble its high tech products including the iPhone. The Taiwanese company is an integral part of Apple’s global supply chain alongside larger plants such as Foxconn or Hon Hai Precision Industry Co. Apple’s supply chain has long been criticized by labor activists for poor working conditions, likely leading to the company swift action over student workers being misclassified.
In a statement, Apple said:
Pegatron misclassified the student workers in their program and falsified paperwork to disguise violations of our Code, including allowing students to work nights and/or overtime and in some cases to perform work unrelated to their major.
The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms.
GF Securities analyst Jeff Pu commented on the situation stating: “Pegatron’s current iPhone business should not be affected. However, it is likely that Pegatron will lose some orders for Apple’s new handsets next year to Luxshare, which is poised to become a new iPhone assembler in 2021.”
A Pegatron spokesperson stated on Monday: “We are working on the corrective actions and are confident that we will complete it soon.” Pegatron commented on their efforts to remedy the situation stating: “Upon discovery of this non-compliant activity, we immediately took the student workers off production lines and worked with our customer and third-party experts to make appropriate arrangements for them to return to their homes or schools with proper compensation alongside all necessary support and care.”