Friday Rant: Giving Apple a Sustainability Break
For example, it would be easy to quibble with what appears to be a brute-force auditing effort of largely upper tier suppliers, rather than one more thoroughly enabled and managed through a technology-driven supplier management program at all levels (I'll get more into this next week in a more informational-driven post). Moreover, while Apple goes to great lengths in the conflict minerals area, creating traceability down to the smelter level, there are no doubt potential holes in any traditional CSR measurement approach here as well. Incidentally, Spend Matters/MetalMiner will publish an exposé next week about how some players in the supply chain may be circumventing conflict mineral rules.
Yet overall, I think it's important to set the record straight and silence the naysayers who know very little about the world of global sourcing yet toss iTomatoes towards Apple as a result of the handful of supplier violations the high tech giant has voluntarily disclosed. After all, they could be doing much worse, and it's clear that many of Apple's earlier learnings (e.g., supply risk in the iPod supply chain) have cascaded into a broader, multi-tier supplier management program that provides more than lip service to CSR and additional risk areas, with what appears a particular emphasis on on-site audits.
Consider that according to the report, Apple made an example of its intolerance of child labor when it terminated a vendor with 42 individual infractions at a single facility (in the case of the other 49 examples it found of underage labor across 9 facilities, Apple took alternative courses of action designed to provide educational recompense to the workers as well as to put in place programs to avoid future infractions). In other areas of the report, we believe it's quite remarkable that in all of the audit records it presents, Apple found only one example of worker endangerment due to the exposure to certain chemicals and only a single facility which endangered worker safety due to working conditions that lacked sufficient safety equipment (e.g., harnesses/guardrails).
Spend Matters believes that from reading this report and talking to those close to the Apple supply chain that the company takes its vendor management practices and overall exposure to supply chain risk quite seriously relative to other competitors in the PC, notebook, tablet and smartphone market. However, Apple could be doing even more to champion what appears to be a world-class supply chain CSR program today. Our quick list of suggestions/areas of focus in an already impressive program would include:
- Creating and sharing a scoring system with suppliers not just focused on audits and compliance, but proactive CSR behaviors and active management
- Creating additional carrots for suppliers (and disclosing these practices) that come out at top rankings on a consistent basis. This might include everything from supplier awards to spend consolidation, leading to additional business
- Deploying a more automated approach to managing different classes of supplier audits, leveraging supplier management and other technologies to make the process more efficient and rapidly transparent (in Spend Matters' view, Apple should set a goal to double its audit rate with the same number of resources it currently deploys)
- Taking a more frequent, virtual auditing approach of supplier facilities and building greater traceability within its sub-tier components and parts supply chain
- Making greater use of technology to guide, measure and manage corrective action requests and overall program administration
- Extending the auditing of raw material specification/documentation in the area of conflict minerals to account for potential supplier workarounds that enable smelters to escape scrutiny and appear to be in compliance (when in fact they might not be)
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Sorry. but I gotta disagree with you.
First, you really need to spend the time to read their 2009 and 2010, and then spend some time digging into the numerous news reports that detail China based infractions. Because, until you do, then you are pretty much basing your analysis on a signle data point. A data point that is (1) being supplied by Apple and (2) has been supplied by Apple
A couple of things that I will highlight that are probably the most relevant (and brief).
1) The report is not an honest representation of the facts. Using the the Hexane issue as my example, I will first quote Apple's assessment of the issue "In 2010, we learned that 137 workers at the Suzhou facility of Wintek, one of Apple’s suppliers, had suffered adverse health effects following exposure to n-hexane, a chemical in cleaning agents used in some manufacturing processes"
This is dishonest in two ways:
1) The exposure did not occur in 2010, but in spring of 2009. A timeline proven during the crisis itself when Nokia released their site report from JULY 2009. A report that was the result of an audit conducted because they had been told of a Hexane exposure.
2) The exposure resulted in 137 workers being HOSPITALIZED for the effects of their exposure to Hexane. Including paralysis, memory loss, etc
A second way that this report is dishonest, or at least misleading, is that Apple in the report states unequivocally that they will sever ties with firms that break the CoC and are unable to rehabilitate themselves, and then goes on to state that three firms were cut. If this were true though, both Foxconn and Wintek would have been released from their relationship as both firms (and yo uneed to dig through the news) have had ongoing issues with payment of wages, labor safety, dormitory conditions, child labor, and the environment.
In short, this document is not an admission of anything, and sadly even though their own reports highlight a very rotten supply chain that doesn't even meet LOCAL Chinese environmental codes... everyone seems to be giving them a pass.