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Monday, July 29, 2013, 03:02 am PT (06:02 am ET)

Apple supplier Pegatron accused of violating Chinese labor regulations

An Apple supplier is once again in the crosshairs of the China Labor Group, a New York-based labor rights watchdog that now alleges wage and safety violations at multiple plants owned by iPhone and iPad partner manufacturer Pegatron.

Pegatron Logo


In a report released on Monday, the non-profit details Pegatron's alleged breach of Chinese regulations governing workplace safety, withholding of worker pay, and sub-par living conditions, reports Reuters.

According to CLW, the Taiwanese company is breaching Chinese and international labor laws, as well as Apple's own supplier standards, at three factories in Shanghai and Suzhou. From March to July, the workers' rights group performed an undercover investigation inside factory walls and interviewed almost 200 employees to gather information for the report.

"The Pegatron factories are violating a great number of international and Chinese laws and standards as well as the standards of Apple's own social responsibility code of conduct," the report claims.

The Wall Street Journal noted on Sunday that CLW found the manufacturer instated workweeks that often exceeded an Apple-specified 60-hour limit, while some employees had their pay withheld for working short shifts. Apple told the publication that it knew certain labor brokers were withholding worker ID cards and demanded Pegatron resolve the situation.

"We strive to make each day at Pegatron better than the last for our employees," Pegatron CEO Jason Cheng said in a prepared statement. "They are the heart of our business. That's why we take these allegations very seriously."
"We strive to make each day at Pegatron better than the last for our employees" - Pegatron CEO Jason Cheng
In addition to the alleged worker-related offenses, Pegatron subsidiaries also reportedly dumped metal-cutting fluids into local sewer systems.

"Their latest report contains claims that are new to us and we will investigate them immediately," Apple said of CLW's claims. "If our audits find that workers have been underpaid or denied compensation for any time they've worked, we will require that Pegatron reimburse them in full."

For its part, Apple said it has performed 15 comprehensive audits at various Pegatron facilities since 2007, some being "surprise" audits conducted within the past 18 months. The audits were part of Apple's Supplier Responsibility initiative, which holds suppliers and manufacturers to a Code of Conduct for safe and ethical working conditions.

Apple has struggled to deal with reports of unethical, and sometimes illegal, treatment of workers by its Chinese partners, including recent accusations against Foxconn involving underage hiring. Perhaps garnering the most press was a 2012 episode of popular radio show "This American Life." The program aired an Apple-centric monologue by performance artist Mike Daisey, who painted a bleak picture of working and living conditions at a Foxconn plant. Daisey later admitted to fabricating the much of the story, and the episode was retracted.

More recently, the Cupertino company has reportedly been looking to diversify its supply chain away from Foxconn, with Pegatron reaping the benefits. It was reported in May that the supplier would be taking on an additional 40,000 workers to handle production of Apple's rumored low-cost iPhone model. Current estimates put Pegatron's workforce at around 70,000 people.