Apple iPad casing supplier under fire over alleged water pollution

Chinese locals call it the "milky river," due to its milky white color. It kills fish, its water is unsuitable for crop irrigation, and it's allegedly the fault of a company that manufactures cases for Apple's iPad.

The Financial Times carried a report on Friday that Riteng — a subsidiary of Casetek — is now under investigation by the Songjiang district government over environmental regulations. Residents living near the Railway River tributary where Riteng's factories operate say that the river has turned milky white almost weekly since the newest factory opened two years ago. Discharges from the factory, they say, have killed off fish and shellfish and have left the water unusable for crop watering.

Casetek, Riteng's parent company, says that the discharge was the result of workers cleaning the factory during the lunar new year holiday. The workers, Casetek claims, improperly disposed of the water they had used.

"It's just Chinese new year annual cleaning," a Casetek representative told The Financial Times. "We will cooperate with the government, and the pollution is nothing to do with the production line of our factory."

Environmental regulators, though, say the pollutants in the milky river came from water used in the plant's cutting and polishing process, not from cleaning the factory. Reportedly, regulators have discovered other violations at the factory.

Apple, according to Casetek, is the main buyer of products produced by the factory, which also supplies Hewlett-Packard and Asus. Apple has confirmed that Riteng produces iPad back panels.

The "milky river" incident typifies the complexities inherent in managing a global supply chain as large as Apple's. The California-based company relies on low-cost labor and suppliers based largely in southeast Asia, many times in countries with different environmental standards from Apple's own.

Apple has opened up to allow third-party environmental audits of not only itself but also its supply chain. It is unclear, though, whether Riteng or Casetek have been audited.

"Significant threats to the environment" counts as one of Apple's "core violations," the most serious breaches of the company's supplier agreements. According to Apple's Supplier Responsibility 2012 Progress Report, core violations "must be remedied immediately, sometimes with the help of expert consultants." The company says that suppliers that have had core violations are reaudited every year.

The Cupertino company has, according to some accounts, considerably improved its environmental accountability. Under CEO Tim Cook, the company is said to have been more open to working with environmental groups in order to address pollution concerns, as well as to sanction suppliers who are skirting environmental regulations.