Apple Sanctions iPhone Supplier Over Student Labor

The company went to "extraordinary lengths" to cover up its violations.

Apple became the most valuable company in the world on the back of the iPhone, but the complex supply chain needed to build the pioneering smartphone also made the Silicon Valley giant a target of labor rights activists.

The company increased scrutiny of its supplier network in the wake of concerns about working conditions at Foxconn a decade ago, but tracking potential problems throughout hundreds of companies — many of which are located in China — continues to prove difficult.

A recent probe, however, managed to uncover violations at Pegatron, one of a handful of companies that assemble the iPhone and other devices for Apple.

According to Bloomberg, Pegatron misclassified participants in a student workers’ program and permitted them to work nights and overtime — in violation of Apple’s rules for its suppliers — at two facilities in eastern China. Pegatron also “went to extraordinary lengths” to cover up the violations, Apple indicated.

Apple said it put Pegatron on probation until the matter is corrected. The company noted that it did not find any evidence of forced or underage labor, and that the manager in charge of the student program had been fired.

Analysts told Bloomberg that the penalty could benefit Luxshare, a Chinese company poised to begin assembling iPhones next year.

But the probation only applies to new business with Pegatron — which means their joint efforts to expand assembly of new iPhones with 5G capabilities are unlikely to be affected.

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