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«iSlave Behind the iPhone Foxconn Workers in Central China 24 September 2011 Foxconn’s campus in the Airport Zone, Zhengzhou, provincial city of ...»

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Students & Scholars Against Corporate Misbehaviour

Telephone: (852) 2392 5464 Fax: (852) 2392 5463

Email: sacom@sacom.hk Website: www.sacom.hk

Mailing Address: P.O. Box No. 79583, Mongkok Post Office, HONG KONG

iSlave Behind the iPhone

Foxconn Workers in Central China

24 September 2011

Foxconn’s campus in the Airport Zone, Zhengzhou, provincial city of Henan

Introduction

In May 2011, Students & Scholars Against Corporate Misbehaviour (SACOM) released a report,

titled Foxconn and Apple Fail to Fulfill Promises: Predicaments of Workers after the Suicides1, which documented the labour rights conditions at the Foxconn plant in Chengdu, China, a supplier of the iPad. Workers frequently endure excessive and forced overtime in order to gain a higher wage. If they cannot reach the production target, they have to skip dinner or work on unpaid overtime shifts. Even worse, they are threatened by potential harm from occupational diseases in various departments. Additionally, military-style management practices are still in place, characterized by “military training” for new workers. A month later, SACOM released its report, a short video clip, the Truth of the Apple iPad Behind Foxconn’s Lies2, was launched to reveal the poor working conditions at the Foxconn factory in Chengdu. Four months on, SACOM has not heard any response from Apple. Likewise, after the explosion at Foxconn’s plant in Chengdu, which caused 3 deaths and 15 injuries, neither Apple nor Foxocnn has given any public account of the cause of the explosion. Furthermore, there is no transparency in either company’s 1 The investigative report is downloadable at http://sacom.hk/wp-content/uploads/2011/05/2011-05- 06_foxconn-and-apple-fail-to-fulfill-promises1.pdf.

2 The video clip is available on Youtube: http://www.youtube.com/watch?v=V3YFGixp9Jw.

1 process of implementing remedies after the tragedy. To keep up the pressure on Apple and Foxconn, SACOM has investigated another Apple supplier, Futaihua Precision Electronics (Zhengzhou) Company, the Foxconn’s subsidiary in Zhengzhou, which produces iPhones.

Regrettably, the findings are equally as bad as those found in Chengdu. The following is a

summary of the findings:

Working on a construction site

- The construction work of the permanent factory in the Airport Zone is still in progress. The environment is messy. Dust flies around the campus on clear days, and flooding occurs when it rains.

Miscalculation and withholding wages

- Many interviewees are underpaid because of mistakes in the recording of working hours and attendance. Sometimes the workers receive a few hundred less than what they deserved. There are records of work stoppages even the workers have had full attendance.

- In order to retain workers after the Lunar New Year, Foxconn withheld part of the overtime premium of workers in January. Workers got back the deducted money only after unremitting complaints.

Forced and unpaid overtime

- Some workers have to work extra time on the production line till the production target is reached.

- “Comprehensive working hours” deprives overtime premium of workers.

- There are unpaid work meetings before and after work shifts.

Workers exposed to irritating chemicals

- Workers in the metal processing department are exposed to “unknown” chemicals that have irritating smell. There is no proper safety sign or illustration label at sight. The ventilation on the shop floor is poor. Some workers reported that they have headaches and suffer from skin allergies.

Harsh management

- Supervisors yell at workers with foul language. Workers experience pressure and humiliation.

Workers are warned that they may be replaced by robots if they are not efficient enough.

- Apart from scolding by frontline supervisors, other forms of punishment include being required to write confession letters and copying the CEO’s quotations.

- A majority of workers have to stand for 10 hours during work shifts. There is no recess as promised by Foxconn. Some workers suffer from leg cramps after work.

- Workers have extra workloads or have to skip the second meal break under the arrangement of “continuous shifts”.

Dormitory under construction

- There are unreasonable prohibitions against activities such as washing clothes or using hair dryers in the dormitory.

- Water and electricity suspensions occur on regular basis in the dormitory.

Care hotline does not care

- The care hotline is either inaccessible or unhelpful. Many workers do not trust the hotline.

Those who have called the hotline report either that it is a void number or that the complaints get back to their supervisors.

- A few respondents shared that there have been unconfirmed cases of strikes. According to them, the workers concerned were dismissed.

2 This report aims to mark the grand opening of the first Apple Store in Hong Kong. During Steve Jobs’ tenure, Apple constantly ignored the NGO and media reports on the social impact of the company. We sincerely hope that the new Apple CEO, Tim Cook, will examine and rectify the labour rights abuses at Apple’s suppliers.

Factory Profile Foxconn announced its plan for relocation to inland provinces after the spate of suicides in Shenzhen last year. Henan provincial government was the first province to attract such investment from Foxconn after the “13th jump” in 2010. Production commenced in August, 2010, only a month after the conclusion of the contract. The government has provided much assistance to Foxconn, including workers’ recruitment and preparation of the production site. The Chinese media reported that about 100,000 vocational school students in Henan province were sent to Foxconn plants in Shenzhen for 3-month internships last year. Some student workers even disclosed that they were forced to work for Foxconn or face punishment by their schools.3 With the support from the government, the workforce in the factory has reached 52,500 within a year.4 And it was reported that the production capacity for the iPhone at the Foxconn factory in Zhengzhou soared to 100,000 per day.5 The temporary production site of Foxconn in the Economic Processing Zone, Zhengzhou.





–  –  –

3 Hu Yinan, “Students ‘forced’ to work at Foxconn”, China Daily, 26 June 2010.

4 “The workforce of Foxconn in Zhengzhou reached 50,000 within a year’, Takung Pao, 19 August 2011 (in Chinese).

5 Liu Rui, “The annual productivity of phone production could reach 200 million in Foxconn in Henan”, Wenwei Po, 6 Sep 2011 (in Chinese).

3 Research Methodology Foxonn has three production sites in Zhengzhou. From July to August, 2011, SACOM researchers conducted offsite interviews at two Foxconn production facilities, the Airport Zone and the Processing Zone, in Zhengzhou. About 130 workers were interviewed. A majority of the interviews were done individually, but some were done in small groups. Almost all the respondents are local citizens in Henan province, with a few of them deployed by Foxconn from Shenzhen to offer support to the new plants on a temporary basis. The age range of the interviewees is between 17 and 32, with an overwhelming majority of them in their early twenties.

About half of the interviewees have worked for Foxconn for over 6 months and have been sent to Guanlan campus in Shenzhen to work because the production facilities in Zhengzhou are still under construction. Apart from a few frontline supervisors, all the other interviewees are production workers. To protect the identities of the workers, SACOM has changed names in the report to pseudonyms.

Findings Workers are generating huge revenues for Foxconn and Apple. In return, the two companies do not comply with the labour laws or the code of conduct. A wide range of labour rights abuses are found at Foxconn factories in Zhengzhou.

Factory environment The production site in the Processing Zone is a temporary site that was offered by the local government a month after the contract was signed between the government and Foxconn. The permanent site for Foxconn is designated in the Airport Zone.

While the construction work on the plants is still in progress, Foxconn has put some of the plants in operation. Basic facilities like canteens and food stores are not ready. Workers can hardly find a place to wash their hands after work. Dust flies Workers do not have chairs to sit on in the open area of the around on the construction site campus. They can only sit or squat on the floor.

and there is flooding during rainy days.

Wages In early 2011, Foxconn incorporated the food allowance (CNY 240) and housing allowance (CNY 150) into the basic salary of workers across the country. The basic salary at Foxconn factories in Zhengzhou is CNY 1350. Renting of the dormitory and consumption of food is deducted from workers’ salaries automatically. Many workers have high expectations about Foxconn. Some of them even resigned from their former jobs for better working conditions. They regretted this after learning the terms at Foxconn.

4 Low wages “We have to pay CNY 150 for dormitory and about CNY 200-300 for food. After these deductions, our basic salary is only CNY 950,” said a female worker who had joined Foxconn 2 months prior.

Many workers have grievances about the low wages at Foxconn. They are particularly disappointed about the false statements in the job advertisements. Zhang De-qiang, who left his former company to join Foxconn, complained, “The labour department made false promises to us about the salary at Foxconn. It claimed we could earn over CNY 2500 per month.” Zhang only knew about the real basic wage when he signed the contract. The Foxconn staff who handled the application sneered at him and asked him to leave immediately if he was not happy with the terms.

Zhang felt humiliated but decided to stay at Foxconn. Another male worker said angrily, “On the job advertisement, Foxconn only shows an “inflated” lump-sum of the basic and overtime wages and other subsidies instead of the basic salary. Foxconn just plays on words and cheats us.” Half of the interviewees have been deployed to work in Shenzhen. They hope to have the same treatment as the Shenzhen workers, which includes basic salary of CNY 1550 for new workers and CNY 2390 after the appraisal. “Foxconn has received lots of concessions from the Henan government. It should raise our salary,” Song Ming, a male worker from the laser department, argued.

Miscalculation of wages SACOM’s previous report on Foxconn documented that scores of interviewees complained there was miscalculation of wages. The workers in Zhengzhou report the same. On their pay slips, they have found that the overtime hours are less than the actual hours they have worked, and sometimes they have records of absence for a day or few days even though they have been in attendance at work. “Foxconn determines that a worker has left the factory on his/her own if he/she does not show up at the factory for 3 days. Surprisingly, my wife, who also works at Foxconn, had a record of work stoppage for over 10 days on her pay slip 3 months ago. How can it be possible?” a 27-year-old worker told a SACOM researcher. On principle, Foxconn should return the deducted wages to the workers. Nevertheless, some workers have not received the deducted wages after 2-3 months. Some even state that no one handles the miscalculation of wages if the amount concerned is low. Guan Lei, a male worker at the metal processing department, complained to his supervisor that he has not received the deducted wage. According to him, his supervisor responded, “It’s all because of your bad luck. You cannot blame anyone.” Withholding wages before Lunar New Year Lunar New Year is a time for family reunion and is very important to most of the migrant workers. Owing to the long distance between the workplace and hometown, and because many workers want to spend more time with family, a week of holiday is too short for many workers.

As such, many migrant workers choose to resign from the factories and seek new jobs after the Lunar New Year. To maintain the stability of the workforce and to save time training new workers, Foxconn withheld part of the overtime premium of the workers in January. The company promised to return the money to them in February. Withholding wages is illegal. Even worse, some interviewees report that Foxconn did not return the money to them in February.

They could only get the deducted wages after unremitting complaints.

Working hours The investigation was conducted during the low season. On the top of the 174-hour regular shift per month, most of the respondents state that the monthly overtime is 50-80 hours. These working hours exceed the 36-hour legal limit for overtime.

5 Forced and unpaid overtime Overtime control is imposed by Foxconn. Some interviewees point out they occasionally have to stay 20-30 minutes extra on production lines until they have reached the production target. They are not paid for this extra time worked.

Besides unpaid overtime work, workers are required to attend unpaid work meetings. Most of the interviewees in Zhengzhou report that they have to arrive at the factory 20 minutes before the work shift begins. Meetings after work shifts last from 5 to 30 minutes.

–  –  –

A small group of workers, who are responsible for repairing iPhones with defects, have grievances regarding the system. Sometimes, they have a 6-day work week, followed by a 3-day work week. This implies they will not receive the double overtime time premium for work on the weekends. Instead, they will be assigned another holiday the week after.

Work safety The massive poisoning at the Wintek factory in Suzhou in 2009 and the explosion at the Foxconn factory in Chengdu in May of this year make the public question the occupational safety at Apple suppliers.

Lots of workers from the metal processing department in the Economic Development Zone can be easily identified by the stains on their clothes and shoes. Some of them are machine operators

–  –  –



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