Apple puts Taiwanese supplier Pegatron on probation over student workers

Apple

Apple’s providers in China – violated Apple’s Supplier Code of Conduct in its management of a student workforce programme,” it said in a statement.

“Apple has put Pegatron on probation and Pegatron will not receive any new company from Apple until they finish each the corrective actions required.” Apple did not declare the terms of the probation.

Apple’s investigations had found no evidence of forced or underage labour, it said, adding that Pegatron had now fired the executive with direct oversight of the programme.

“The individuals at Pegatron accountable for the offenses went to exceptional lengths to evade our supervision mechanisms,” Apple said.

Pegatron’s shares closed down 2.1% on Monday, underperforming a 1.2% rise in the broader Taipei market.

Pegatron said in a separate statement that student workers at its Shanghai and Kunshan campuses had been found working without complying with local rules and regulations.

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They had now been taken off the production lines and given “proper compensation”, it stated.

It didn’t address in its announcement how being placed on probation by Apple may impact the company. Pegatron reported that a T$19.3 billion (approximately $676 million) gain in 2019up 74% over the previous year.

Apple last month launched its own next-generation iPhone 12, with quicker 5G connectivity.

Apple and its providers have been accused of poor labour practices in the past, but the US company has been attempting to get a grip on such issues by releasing annual reviews of the iPhone distribution chain.

In 2017, Apple and Foxconn said a few students were found working overtime in a few of the latter’s Chinese factories, violating local labour laws.

In July the third major Taiwanese assembler of this handset, Wistron, sold two smaller factories from China to Dongguan-based Luxshare, a fast-growing firm emblematic of China’s rising home-grown suppliers that are gradually increasing competition with the Taiwanese giants.

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The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Josh Horwitz in Shanghai and Yimou Lee in Taiwan. Writing by Brenda Goh. Editing by Ana Nicolaci da Costa and Kenneth Maxwell.

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