Apple’s supply chain problems gather in India and China, with Wistron and Pegatron on trial

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Silicon Valley technology company has launched an investigation after local Indian media reported that workers vandalized an iPhone factory near Bangalore run by Taiwanese manufacturer Wistron. A local labor minister and a labor organization told CNN Business last week that workers there said they were not being paid.
Apple (AAPL) said in a statement to CNN Business that an independent audit of the violence found that payment for some workers had been postponed to October and November.

“Our main goal is to make sure that all employees are treated with dignity and respect and are promptly compensated,” Apple said, adding that it has stopped placing new orders with Wistron as a result of its findings. “We are very disappointed and are taking immediate action to address these issues.”

Wistron did not respond to several requests from CNN Business for comment Monday. However, the company has given up an executive running its business in India, according to Taiwanese media reports.

“We are eliminating the vice president who oversees our business in India,” Wistron said in a statement, according to the Taiwan Times. “This is a new facility and we recognize that we have made mistakes as we have expanded.”
Apple has had to deal with serious labor issues in Asia in recent weeks. Last month, it placed another major supplier, Pegatron, on probation for violating its labor code by the fact that some student workers in China work overnight and overtime hours.

Apple said at the time that Pegatron fired an executive in light of the crimes. Pegatron also said it worked to increase surveillance after the breaches were discovered, including by conducting an external audit.

However, the allegations against Pegatron have not disappeared. Last week, hundreds of workers protested at Pegatron facilities in Shanghai and the eastern Chinese city of Kunshan because they said they were owed bonuses and salaries, according to China Labor Watch’s human rights group.

The organization estimates that up to 500 temporary workers, hired by local recruitment agencies in partnership with Pegatron, gathered outside the company’s Shanghai factory to protest on Saturday, chanting, “Pay the workers, workshop!”

The agencies promised workers special bonuses if they worked for 55 days, but did not continue their work upon completion of their work, according to China Labor Watch.

Pegatron declined to comment Monday.

Apple is suspending new business with the iPhone provider that used students on night shifts

The riot at the Wistron factory in India, meanwhile, erupted around the world last week after images circulated on social media that appeared to show people smashing glass panels and tearing down CCTV cameras. In a case on the Taiwan Stock Exchange on Tuesday, Wistron estimated that the violence caused damage worth up to $ 7 million.

In its statement Monday, Apple said Wistron had taken disciplinary action and was in the process of “restructuring its recruitment and pay teams” in Narasapura, India. the region where the factory is located.

The company has also set up a hotline for unit workers to call anonymously with any concerns, he said.

Apple has long been criticized for the way workers in its supply chain are treated. To improve practices, the US company regularly conducts audits, including surprise visits, of its suppliers’ facilities around the world.

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