Before Tim Cook became Apple's CEO, his job was to make sure that all the moving pieces of the company's massive and complex supply chain functioned smoothly, efficiently, and in the shadows. Apple's supply chain is notoriously opaque, and for good reason; the company thrives on rumors about its next big products, but all that mystique could be taken away if its supply chain was exposed. That's not to say that Apple's suppliers are completely unknown--after Taiwanese manufacturer Foxconn experienced a spate of suicides last year, Apple executives publicly visited the factory to figure out how to prevent more people from killing themselves. It was Cook who led this delegation.
Workers lineup outside of Foxconn Precision Electronics plant for new jobs manufacturing Apple's iPhones and iPads
Despite its progress in the human rights arena, Apple has a very long way to go in improving its suppliers' environmental practices. Even the company's 2011 Supplier Responsibility Report pays little attention to environmental issues. Now that Cook, who is already getting a reputation as being a bit more friendly and open then Steve Jobs (he's already reversed the company's anti-philanthropy stance), has taken over, will the supply chain also get more friendly? Or will Cook's ultra-efficient, ulta-secretive creation keep churning out iPads at the expense of Chinese lives and the environment?
Ma Jun, the Director of China's Institute of Public and Environmental Affairs (IPE), spoke with Co.Exist at BSR's 2011 conference about the trouble with Apple's suppliers, and how the electronics manufacturer is finally gearing up to make changes.
Ma's interest in the IT supply chain stems from the dozens of heavy metal poisonings that have occurred in China since 2009. Mines, leather producers, and the chemical industry are traditionally the kinds of companies blamed for the poisonings, but the IT industry has recently also come under scrutiny.
In 2010, the IPE teamed up with The Green Beagle and the Friends of Nature to release a series of reports about the IT industry's environmental violations. Ma says,
"At the beginning, not many companies responded. After quite a few months of interaction, Apple really stood out. Many others would at least say okay, I received your letter, and most of them would say we need to check on [these violations]. But Apple was totally evasive if not unresponsive."
Secrecy breeds curiosity, however, and many of Apple's suspected suppliers are listed on the IPE's pollution maps, which offers the environmental supervision records of Chinese manufacturers and suppliers as well as data on local levels of water and air pollution. So the organization and a team of partner organizations decided to dig even deeper into Apple's supply chain, first with a report in January 2011, and then with a follow-up in August 2011.The first report details some grim human rights violations, but the second report delves into the environmental practices of Apple suppliers, which have not often scrutinized. Ma says,
"We found violations of wastewater standards and water pollution, air pollution, air emissions problems, and hazardous waste disposal problems. The volume of hazardous waste generated by the supply chain is amazing. In one case, we found that a single factory generated 110,000 tons of hazardous waste a year."
It's an unsustainable practice on many levels, explains Ma, both because Apple (and its supply chain) is growing so fast, and because product life cycles are getting so much shorter--meaning more and more people want the goods that these factories pump out.
Take the city of Kushan, in Jiagsu Province. Kaedar Electronics and Unimicron Electronics, a pair of suppliers, are both based there. Kaedar dumps untreated wastewater into the local community's waterways and releases toxic spray coating emissions, while Unimicron releases acid gas emissions.
Many Chinese manufacturers dispose of their hazardous wastes by dumping them directly into China's streams and rivers where they arenow causing an environmental nightmare
When IPE visited Kunshan, it found locals who complained of a "poisonous gas" emitted by the companies--a smell so strong that they do not dare open their windows for fear of choking in the middle of the night. Residents also complained of chest pain, dizziness, frequent nose bleeds, and "inky black" water in a nearby stream.
The report offers this harrowing anecdote:
"During the investigation, the villagers spontaneously took water from the stream, pouring the water into a plastic bottle. Suffering from gastric cancer, Zhu Guifen, who has already had her stomach removed due to cancer, clutched a plastic bottle; along with more than ten middle-aged villagers they assembled in front of us. At that time, we were astonished by the scene in front of our camera. These 21 ladies, with an average age of 55 suddenly and simultaneously fell to their knees, clutching the bottle of polluted water and pleaded, 'We beg you, help us! Help us ordinary people!'”
21 village ladies from Kunshan simultaneously got on their knees and begged the IPE to stop the hazardous waste pollution by Foxconn Precision Electronics
Ma recalls one factory worker--an 18 year-old girl--who was poisoned while working for an Apple supplier. Ma says,
"After half a year [at work] she couldn't walk properly and fell to the ground. She couldn't pick up a brush or chopsticks. She got better, but the problem is, she is not fully recovered, and her family spent so much of their money [on medical bills]. It was a desperate situation."
It's not that Apple is so much worse than its competitors. The company is just becoming so large that everything it does has an outsized impact. Ma says,
"Apple is simply growing from a niche market product manufacturer into a major manufacturer, and the volume is getting a lot bigger. The sheer scale of that means that its impact is growing."
According to Ma, after the IPE and its partners published the second Apple report.
"The company expressed its willingness to set up a platform to communicate. We had a candid discussion about issues that we identified. They explained their take, and both sides agreed that we should try to work together."
Apple still refuses to disclose its suppliers, of course, but that doesn't really matter. The IPE largely knows who Apple's suppliers are (from talking to locals and monitoring media reports), so if Apple makes changes, it will be apparent to all concerned.
The IPE has now had multiple meetings with Apple. This past month, Ma went to Apple's Cupertino headquarters along with colleagues from the National Resource Defense Council for a five-hour meeting.
"They're hiring experts to check up on their suppliers, on the cases we raised. They're going to update us about this."
Ma believes that pressure on suppliers from Apple is already making a difference. He says,
"Suppliers have come to us--and local NGOs where they're based--telling us what went wrong and how they've tried to fix their problems. And some of them give us a timeline. For example, Foxconn told us they would finish their corrective actions on October 27."
In this case, the "corrective actions" include installing better emissions control equipment in workshops near local residences.
Ma also recently received a call from a factory manager at 2:30 a.m.; his factory had been discharging copper into a local waterway. The supplier urgently wanted to meet Ma and figure out a way to dredge the lake, insisting that it was because of his environmental consciousness. Ma says,
"I want to give some credit to Apple."
Apple's overtures toward the IPE have sparked hope that the company will continue to more closely regulate its supply chain. Ma cites Siemens, which has software that compares its 10,000 suppliers with the IPE's 90,000-plus pollution records, as a company to emulate. When Siemens discovers a problem, the company sends a letter in the name of the CEO and COO requesting corrective action to be taken within a certain deadline. May says,
"It's important for Apple to move from being passive to being proactive. I'd hope they could set up their own screening system to identify problems before, in a proactive way, instead of waiting for us."
COMMENTARY: Apple has established Supplier Responsibility requirements for its worldwide suppliers. Below is a highlight of the opening exerpt from Apple's Supplier Responsibility requirements:
"Supplier Responsibility at Apple
Apple is committed to ensuring the highest standards of social responsibility wherever our products are made. We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes.
Apple’s program is based on our comprehensive Supplier Code of Conduct, which outlines our expectations for the companies we do business with. We evaluate compliance through a rigorous auditing program and work proactively with our suppliers to drive change."
The specific language in Apple's Supplier Responsibility requirements which drew my attention is a line in the first paragraph that says, "..and use environmentally responsible manufacturing processes."
Apple also cites its Supplier Code of Conduct as the key source for what the company expects from its suppliers.
I have reproduced below the section titled "Environmental Impact" on pages 4 and 5 of the Supplier Code of Conduct which which outlines Apple supplier requirements that pertain to protecting the environment.
"Environmental Impact
At Apple, environmental considerations are an integral part of our business practices. Suppliers shall commit to reducing the environmental impact of their designs, manufacturing processes, and waste emissions.
Hazardous Substance Management and Restrictions
Suppliers shall comply with the most recent version of Apple’s Regulated Substances Specification, 069-0135 and with any applicable laws and regulations prohibiting or restricting the use or handling of specific substances. To ensure safe handling, movement, storage, recycling, reuse, and disposal, Suppliers shall identify and manage substances that pose a hazard if released to the environment and comply with applicable labeling laws and regulations for recycling and disposal.
Solid Waste Management
Suppliers shall manage and dispose of non-hazardous solid waste generated from operations as required by applicable laws and regulations.
Wastewater and Stormwater Management
Suppliers shall monitor, control, and treat wastewater generated from operations before discharge as required by applicable laws and regulations. Supplier shall take appropriate precautions to prevent contamination of stormwater runoff from its facilities.
Air Emissions Management
Supplier shall characterize, monitor, control and treat air emissions of volatile organic chemicals, aerosols, corrosives, particulates, ozone depleting chemicals, and combustion byproducts generated from operations, as required by applicable laws and regulations, before discharge.
Environmental Permits and Reporting
Suppliers must obtain, maintain, and keep current all required environmental permits (e.g. discharge monitoring) and registrations and follow the operational and reporting requirements of such permits.
Pollution Prevention and Resource Reduction
Suppliers must endeavor to reduce or eliminate solid waste, wastewater and air emissions, including energy-related indirect air emissions, by implementing appropriate conservation measures in their production, maintenance and facilities processes, and by recycling, re-using, or substituting materials."
Apple's Supplier Code of Conduct also requires suppliers to maintain certain Documentation and Records:
"Documentation and Records
Supplier shall have processes to identify, monitor, and understand applicable laws and regulations and the additional requirements imposed by this Code. Supplier shall obtain, maintain and keep current a valid business license as required by applicable laws and regulations. Creation of documents and records to ensure regulatory compliance and conformity to this Code, with appropriate confidentiality measures to protect privacy."
Furthermore, to insure compliance with Apple's Supplier Code of Conduct, Apple has developed an Auditing for Complaince section which stipulates in the first two paragraphs:
"We execute an aggressive compliance monitoring program that includes factory audits, corrective action plans, and verification measures.
Each year, Apple audits more suppliers across our supply base. We select facilities based on risk factors so that we focus our efforts where they can have the greatest impact."
Apple's Auditing for Compliance requires that Apple auditors and a local third-party auditor conduct a comprehensive audit of supplier's to insure compliance with Apple's Supplier Code of Conduct and and stipulates that those supplier's violating Apple's Supplier Code of Conduct will take correction action to insure that they are in compliance.
It certaintly appears that if Apple had performed proper compliance auditing and monitoring, that it would've discovered that Foxconn Precision Electronics, one of their major contract suppliers bar none, was not in compliance with the Environmental Impact section of Apple's Supplier Code of Conduct, or knew there were environmental violations, and either ignored them or did not monitor Foxconn adequately to insure that the supplier had taken adequate corrective actions to correct the violations and cleanup the environmental hazards.
We are not talking about minor violations of Apple's Supplier Code of Conduct, but the section dealing with Environment Impact. According to China's IPE, when they discovered the extent of the environmental damage caused by Apple's Chinese supplier's, in particular Foxconn,
"Apple was totally evasive if not unresponsive."
According to China's IPE report of August 31, 2011 titled, "The Other Side of Apple II -- Pollution Spreads Through Apple's Supply Chain," faced with an ever evasive Apple, a group of Chinese NGOs decided to dig deeper and carry out further investigations into the environmental problems that exist within Apple’s supply chain. In the reportt, the IPE holds nothing back, accusing Apple of ignoring its investigations and queries. Here's what they had to say in the Executive Summary:
"Through five months of research and field investigations we have found that the pollution discharge from this $300 billon dollar company has been expanding and spreading throughout its supply chain, and has been seriously encroaching on local communities and their surrounding environments.
China's IPE List of Suspected Apple Suppliers of August 31, 2011
"Through our investigations, we discovered that the pollution from some of Apple’s suppliers had already caused severe damage to the environment. Amongst these companies is the Meiko Electronics’ plant in Guangzhou, a suspected PCB supplier to Apple Inc. This company had previously schemed to conceal their environmental violations. However, this plan was foiled by the Environmental Protection Department. Within just a few months, this company was penalized for more than ten violations.
Furthermore, the amount discharged from the Meiko Electronics PCB plant, in Wuhan, is even more than that at the plant in Guangzhou. The neighboring lake, named Nantaizi (or Southern Prince), is seriously contaminated. Through third party monitoring the water in the discharge channel to the side of the company’s premises was found to contain heavy metals, including copper and nickel, which are standard pollutants from PCB plants. The copper content in the sediment sample, taken from the Nantaizi Lake and the discharge channel intersect reached as high as 4270 mg/kg, which is 56 to 1931times the amount found in the sediment in the major lakes in the middle reaches of the Yangtze River.
The large volume of discharge in Apple’s supply chain greatly endangers the public’s health and safety. Through the process of our investigations, we discovered several suspected suppliers to Apple that have been the target of numerous complaints from local communities. Located in Kunshan, the two companies Kaedar Electronics and Unimicron Electronics have been subject to repeated complaints from local residents due to their emissions discharge. The residents of this community worry that the health of their children will be severely damaged. More seriously, a village in the vicinity of the company has experienced a phenomenal rise in cases of cancer.
Foxconn Electronics, located in Taiyuan, Shanxi Province, has a huge production capacity and is involved in serious pollution resulting from its metal surface processing. In recent years the local residents have repeatedly filed complaints with local agencies against the Foxconn factory’s irritant gases. These gases often leave the nearby residents with irritated nasal passageways, watering eyes and they sometimes make it hard for residents to open their windows, due to pollution being so intense. The local government has called on the company to control its pollutant discharge many times, but the pollution that severely affects the quality of life for the residents has yet to be resolved.
We have found from this investigation that the volume of hazardous waste produced by suspected Apple Inc. suppliers was especially large and some had failed to properly dispose of their hazardous waste. Each day, Ibiden Electronics Beijing Company produces several dozen tons of hazardous wastecontaining heavy metals copper, nickel and cyanide. However, during further checks the environmental agency discovered that even though there are strict national regulations for the hazardous waste transport manifests to be filled out; in this case they were all left blank. After checks, the agency also discovered that the exact whereabouts of the heavy metals sludge was not clear. Moreover, the Shenzhen Municipal Hazardous Waste Treatment Station who are responsible for the treatment of hazardous waste from the electronics industry, including Foxconn’s, was also found to have discharged pollutants against the authorized standards.
Hazardous waste is not only directly toxic to humans and animals, it may also pollute the streams, rivers, lakes and seas and may infiltrate and contaminate soil and ground water through rain and snow, causing long-term impacts that are extremely difficult to remedy and clean up. Apple’s rejection tofulfill its responsibility to disclose environmental information will likely cause an immense amount of hazardous waste released into the environment from its supply chain, which could ultimately lead to hidden long-term environmental and public health dangers."
This is what the IPE said about their two investigations into Apple's hazardous waste pollutions and their opinion of Apple's "seemingly rigorous audits" of their supply chain.
"From these two investigations, the coalition has discovered more than 27 suspected suppliers to Apple that have had environmental problems. However, in the ‘2011 Supplier Responsibility Report’ published by Apple Inc., where core violations were discovered from the 36 audits, not a single violation was based on environmental pollution. The public has no way of knowing if Apple is even aware of these problems. Again, the public has no way of knowing if Apple has pushed their suppliers to resolve these issues.
Therefore, despite Apple’s seemingly rigorous audits, pollution is still expanding and spreading along with the supply chain. Meanwhile, on May 20th, 2011, a disastrous incident involving an explosion took place at a production line responsible for iPad2s at the polishing workshop at Foxconn Chengdu, causing the deaths of three workers and injuring 15 more. After this incident, it was discovered that the first phase of this enormous plant, was expected to be the largest iPad2s supplier globally, taking only 76 days to construct. A media investigation revealed that in order to expedite construction, the polishing workshop machinery was installed at the same time as that production was taking place; meanwhile, the second batch of workers, after having only two or three days training, were sent to their posts to begin work.
For this kind of company to have passed an audit led by Apple’s Vice-President and then go on to win the main contracts for Apple’s global iPad market, it must surely leave one to question Apple’s auditing process. However, there has been no way to confirm any of these queries with Apple Inc., as the company will not actively disclose any information, nor will it even passively respond to questions regarding their suppliers. Under the cover of Apple’s annual auditing report, the company continues to issue contracts to polluting companies for its OEM production, so as to pursue blood stained profits at the cost of the environment and communities.
During the past year and four months, a group of NGOs made attempts to push Apple along with 28 other IT brands to face these problems and the methods with which they may be resolved. Of these 29 brands, many recognised the seriousness of the pollution problem within the IT industry, with Siemens, Vodafone, Alcatel, Philips and Nokia being amongst the first batch of brands to start utilizing the publicly available information. These companies then began to overcome the spread of pollution created by global production and sourcing, and thus turn their sourcing power into a driving force for China’s pollution control.
However, Apple has become a special case. Even when faced with specific allegations regarding its suppliers, the company refuses to provide answers and continues to state that “it is our long-term policy not to disclose supplier information.” A large number of IT supplier violation records have already been publicized; however, Apple chooses not to face such information and continues to use these companies as suppliers. This can only be seen as a deliberate refusal of responsibility.
Apple has already made a choice; to stand on the wrong side, to take advantage of the loopholes in developing countries’ environmental management systems, and to be closely associated with polluting factories so that it can continue to grab their own super profits, at the expense of the environment andcommunities; becoming a barrier in China’s path towards pollution reduction.
Consumers also need to make a choice. We believe Apple’s consumers would not accept the poisoning of the environment, the harm to communities and the sacrifice of employee rights in exchange for their trendy electronic products. For the sake of the health of the public, the protection of the environment, the basic rights of workers in Apple’s production lines, and in order to give our children a safe and clean place to live; we call upon consumers to express their concerns to Apple, so that Apple can hear the voice of the public."
The text of the report is seething in its condemnation of Apple, provides all the gory details, leaving nothing to the imagination, and lays the entire blame for the widespread hazardous waste pollution catastrophe now occuring throughout China due to Apple's supply chain. Figure 13 on page 13 lists the names of Chinese nationals from a community located in Kunshan City, Jiangsu Provice, who contracted cancer due to exposure to hazardous wastes of Kaedar and Unimicron, two of Apple's major suppliers (see above).
As far as I could find, Apple has not publicly responded directly to the findings of IPE's report of August 31, 2011 and the matter still remains open and unresolved.
Courtesy of an article dated November 7, 2011 appearing in Fast Company and an article dated February 15, 2011 appearing in The Los Angeles Times
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