Not only will Apple likely be forced to share results of its investigations on what caused the riots at Wistron, but it may also be held at least partially liable for the damages and labor violations, according to India law.
Following the worker riots at the Wistron plant in Narasapura, India, state government authorities are expected to ask Apple to supply details from its investigations. Under Indian law, Apple is a contractor that is ultimately the employer, and so the government can call for explanations from both Apple and Wistron.
According to The Economic Times, unnamed sources say the Karnataka state government could make Apple a party to its inquiry.
"Apple could be asked to share details of its investigation with the labour authorities/court," a source told the publication.
Separately, The Economic Times reports that legal experts say the authorities can hold Apple as accountable as Wistron. "According to the Contract Labor (Regulation and Abolition) Act, 1970," said a legal source, "the contractor is responsible for payment of wages and the principle employer is ultimately responsible for it."
The Karnataka state government has not commented on whether it will hold Apple accountable, but it has issued a report saying Wistron exploited its workers. Apple has placed Wistron "on probation," which means it will not receive new orders.
That's a significant blow to Wistron because it means the company is likely to fall short in the level of production needed to qualify it for government incentives.
The Economic Times sources say that Wistron might still have been eligible for these incentives, if Apple had not taken action.
"The epidemic and vandalism at the Wistron unit could have qualified for the [incentives'] force majeure clause," said a source. "The fact that Apple has suspended further orders doesn't qualify as a reason for relaxation under the PLI scheme, hence it might not be possible for the government to consider a relaxation for the iPhone manufacturer."
The government and Apple's investigations concern the riot on the night of December 11 at the Wistron plant in Narasapura, India. It was prompted by claims that workers were not being paid what they had allegedly been promised by the iPhone assembly company.
Reportedly, some 2,000 staff are said to have caused destruction to property, and set fire to vehicles on site. Initially, it was claimed that $56 million in damages was done, but later Wistron revised the figures down to between $3.5 million and $7 million.
Apple stopped production at the plant and began its own investigation. "We have teams on the ground," said Apple. "[We] have immediately launched a detailed investigation at Wistron's Narasapura facility."
27 Comments
Ah, India. Apple throws you a bone - and you mess it up. Ridiculous laws like this will severely limit its ability to compete. No foreign company should have to babysit your companies.
I for one am glad that India holds companies responsible so there is accountability all of the way up the supply chain because that is a guaranteed way to make and keep everyone playing by the rules. In the US major corporations can pawn stuff off to subcontractors who then subcontract out again which means the major corporation has no liability but knows full well what is going on.
This story is confusing. Will the actual rioters be held accountable for, you know, rioting? Surely Indian law doesn't say "if your employer screws you over, bring 1,999 of your friends and trash the place." Also since when is Apple the "contractor"? Or is this term like "bi-weekly" where it means to completely different things?
At the end of the day, I'm confident that this (the government inquiry part, not the losing production for months) won't be more than a paperwork hassle for Apple. Apple will bring forth a raft of documentation showing that they did everything they could to hold Wistron accountable. I find it impossible to believe that Tim Cook and his senior executives are hypocrites on this particular issue.
This situation is confusing, but always remember that India is an island of democracy, freedom and human rights in a continent bereft of the same. India is on the front lines of the war with totalitarianism and still standing. They are far from perfect, but kudos to India for these things.