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Monday, October 24, 2011, 09:46 pm PT (12:46 am ET)

Apple supplier Pegatron facing pollution concerns in China

Several subsidiaries of Apple manufacturer Pegatron are addressing complaints after its production facilities came under fire for alleged environmental violations, a new report claims.

Pegatron, one of Apple's manufacturers for the iPhone, has been called out for excessive pollution at its three component subsidiaries in China by a recent environmental report.

The company has responded by noting that is in the process of purchasing equipment meant to curb noise and waste gas for one of its subsidiaries, DigiTimes reports. Pegatron will also work to replace old equipment and hold to a regular maintenance schedule at the subsidiary in order to address concerns.

The report also mentioned that Pegatron's two other subsidiaries had been fined because of polluted water. The company has already made changes to its facilities and will "continue to negotiate with local residents and government to resolve the situation," according to the publication.

Pegatron is set to hold an investor conference on Oct. 27 and is expected to further address environmental concerns there. Also believed to be on the agenda at the conference is the impact that the rumored 10 million iPhone 4S orders Apple has placed with the company will have on its revenues. But, the supplier will likely announce losses for 2011, the report said.

Concerns over Pegatron's environmental compliance come on the heels of the temporary closing of a high-profile laptop case manufacturer's factory in China. Catcher Technology was ordered to close a plant on Sunday that is estimated to provide 60 percent of the unibody enclosures for Apple's laptops. Reports have claimed that the manufacturer will invest $2-3 million into the facility in hopes of resuming production sometime in November.

At the beginning of this year, environmental groups in China called out Apple as the least responsive to environmental and workers' rights issues among a group of 25 technology companies. In August, several groups made public a follow-up report that accused Apple of taking "advantage of loopholes in developing countries' environmental management systems."

Hours before the document was released, Apple reportedly caved to the groups and agreed to initiate a dialogue on the allegations. One concern Apple was said to have voiced to the groups was the fact that some of the suppliers on the report's list did not actually work with Apple.

Since the iPhone maker keeps the names of its partners private, the groups had relied on public information and court documents to compile their list of alleged Apple suppliers.

Environment


Apple routinely audits its suppliers and publishes its findings in an annual Supplier Responsibility Progress Report. Last year's report found instances of underage workers and bribery that caused the company to terminate business with some of its partners.

The supplier audit also detailed Apple's response to an incident at a Wintek facility where workers were exposed to toxic n-hexane gas. Apple claims that all affected workers have been successfully treated and compensated, though some former workers have petitioned Apple CEO Tim Cook to address their grievances.

Apple has worked hard to better communicate its environmentally-conscious policies after being targeted by Greenpeace. Those efforts paid off in 2010 when the environmental advocacy group ranked Apple as the greenest electronics maker.

However, the transition to the "cloud" has bruised Apple's reputation for being green, as an April report from Greenpeace accused the company of using "dirty" energy at its $1 billion data center in Maiden, N.C.