NEW DELHI / BENGALURU (Reuters) – Apple Inc. has released supplier Wistron Corp on Saturday, saying it will not award the new business to the Taiwanese contract maker until it discusses how workers at its plant were treated of southern India.
Early findings from an Apple audit following violence at the Wistron plant in the Indian state of Karnataka showed violations of its “Supplier Code of Conduct,” said the Cupertino-based technology giant , California, in a statement.
Hired workers angry at unpaid wages destroyed property, equipment and iPhones on December 12, causing millions of dollars in losses to Wistron and forcing it to close the plant.
Apple said Wistron had not implemented proper working hours management processes, which “caused delays in the payment of some workers in October and November.”
Wistron admitted on Saturday that some workers at the Narasapura plant in Karnataka had not been paid properly or on time, and was withdrawing a senior executive who oversaw his business in India.
Apple said it will continue to monitor Wistron’s progress in corrective actions.
“Our main goal is to make sure all workers are treated with dignity and respect and are fully compensated quickly,” Apple said, adding that it continued to investigate problems at the plant, which is about 50 km from the southern technology center. of Bengaluru and assembles an iPhone model.
“This is a new facility and we recognize that we made mistakes as we expanded,” Wistron said in a statement. “Some of the processes we put in place to manage employment agencies and payments need to be strengthened and updated.”
Wistron said it is restructuring its equipment and establishing 24-hour phone lines so employees can file anonymous complaints.
“Apple has sent a strong message to its suppliers, telling them unequivocally that they must meet their standards,” said Neil Shah, a Hong Kong technology researcher at Counterpoint.
“In the long run, it should make vendors more cautious and likely create fewer public relations headaches for Apple.”
MANUFACTURING RESTORATION
Apple’s parole will delay production of Wistron smartphones and affect its manufacturing drive in India, where it had pledged to invest about 13 billion rupees ($ 177 million) over the next five years. years as part of the New Delhi production-related incentive plan for smartphone manufacturing.
Wistron planned to manufacture another model of iPhone at the Narasapura plant and planned to hire up to 20,000 workers within a year, a source told Reuters earlier.
But he was unable to cope with the rapid increase in labor and breached several laws, Karnataka state officials found after an inspection of the plant following the violence.
The number of workers rose to 10,500 from the 5,000 allowed in a short period of time, the Karnataka factory department said in a report, which was reviewed by Reuters.
“The human resources department has not been properly set up with staff who have a solid knowledge of labor laws,” the inspection report, which was conducted on December 13, concludes.
Wistron responded to Reuters emails seeking comments on the listed violations.
Other violations highlighted in the report included insufficient payment of wages to hired workers and maintenance personnel and causing women to work overtime without legal authorization.
The findings of this inspection and another preliminary government audit confirm complaints about unpaid wages and poor attendance record systems that have been reported in interviews with Reuters by at least half a dozen Wistron workers.
Wistron’s probation will likely also affect Apple’s plans to expand to India, a market it has opted to expand its manufacturing base beyond China.
Apple began assembling its first iPhone model in India through Wistron in 2017. It has now stepped up assembly operations, with Foxconn in southern India and another major supplier, Pegatron, to begin operations. premises.
($ 1 = 73.5700 Indian rupees)
Reports of Chandini Monnappa in Bengaluru and Sankalp Phartiyal in New Delhi; Edited by Shri Navaratnam and Alexander Smith