We expect our suppliers to maintain the highest standards of ethical conduct. Our Supplier Code of Conduct clearly states a range of practices we consider essential to running an ethical business.
Yearly audits are key in enforcing ethical business practices among Apple’s suppliers.
Fostering and enforcing ethical practices.
Apple has established ethics training programs for managers that cover proper recruitment of foreign workers, record-keeping and documentation of business practices, worker ID checks and age verification, tracking of working hours, and general management responsibilities.
We conduct yearly audits that include interviews with employees and contract workers about our suppliers’ management practices. An important aspect of any audit is the supplier’s willingness to disclose records and information about its management practices. So we look closely for instances of coaching — when management has directed workers to provide inaccurate information during audits. We also interview senior managers, review documentation, and inspect supplier records.
Violations of our ethics guidelines are not tolerated and can result in immediate termination of our relationship with a supplier, just as relationships have been terminated in the past with suppliers who were involved with bribery and falsification of audit materials.
Protecting whistle-blowers.
When workers are interviewed during an audit, they receive a hotline card with a telephone number and a case number that identifies the facility and audit date. This enables workers to provide additional information after an audit and to report any adverse consequences of their participation in the audit — without fear of retaliation.
Findings and Results
In 2011, audits discovered instances of ethical breaches including:
- Falsifying work-hour records and employee profiles
- Providing falsified payroll records and misleading answers in interviews with Apple’s auditing team
- Obstructing the auditing team’s effort to obtain payroll records
- Coaching workers with intimidating language on how to answer questions
Apple addressed the issues by requiring further audits and investigations, repayment of underpaid workers, adjustment of worker benefits, adjustment of management processes, remediation of health and safety violations, and retraining of management. In some cases, we terminated our business relationship with the supplier.