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On the outside, Apple tries very hard to maintain a clean public image. After performing an annual internal audit on working conditions of employees and supplier activities, serious violations of policies have been discovered. Issues range from falsifying working hours to harmful environmental practices.
This marks the 12th year that Apple has performed supplier audits to ensure that its reputation remains intact. Out of the 756 suppliers spanning 30 different countries, 197 suppliers were audited for the first time. The number of under-performing suppliers dropped to just 1 percent in 2017, significantly reduced from 14 percent in 2014. Exceptional or high performers account for 59 percent, up from 47 percent in 2016.
Out of all the suppliers subject to audit, 44 "core violations" of policy were found. This is twice as many found compared to last year. A major issue discovered in three different cases was employees being forced to give up large portions of their pay to keep their jobs. Collectively, workers in the Philippines gave up over $1 million in order to maintain their jobs at a contractor facility. Apple has since ordered the money be paid back to employees.
Working hours have traditionally been a concern for contract workers. Apple mandates that all employees under contract must not work more than 60 hours in any work week. This past year, compliance on working hours fell from 98 percent in 2016 down to 94 percent. There were 38 instances where hours were forged to try and hide policy violations.
COO Jeff Williams states, "We're committed to raising the bar every year across our supply chain." Upon finding violations of policy, the chief executive of a supplier is directly notified and is given a probation notice. Apple requires that corrections be made or it will consider cutting ties with non-compliant contractors.
Last year, ten mineral and chemical refiners were dropped from Apple's supply chain after refusing to allow an audit to take place. An additional six businesses opted to cut ties with Apple of their own will before being asked to participate.