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Originally published Monday, February 27, 2012 at 6:23 PM

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No company follows Apple's expanded China factory audits

Apple's rivals, including Microsoft, Dell and Hewlett-Packard, aren't rushing to emulate the iPhone maker's decision to subject supplier factories to audits by a labor group.

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No surprise. Customers of Apple's competition generally don't care. If they don't care... MORE

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SAN FRANCISCO — Apple's rivals aren't rushing to emulate the iPhone maker's decision to subject supplier factories to audits by a labor group.

Instead, they're sticking to internal checks that may leave room for violations — and negative public-relations fallout.

Apple said Feb. 14 the Fair Labor Association (FLA) had started independent audits amid criticism of conditions at its plants in China.

Companies including Microsoft, Dell, Hewlett-Packard and Samsung Electronics rely on their own evaluations, based in part on guidelines from the Electronic Industry Citizenship Coalition (EICC), which they say are sufficient to prevent abuses.

Though Apple's decision to join FLA may not root out all instances of labor abuse, the EICC's member companies may open themselves to even harsher criticism.

While the EICC sets standards for ethics, worker safety and labor practices, it doesn't require members to disclose findings and it lacks enforcement powers.

The result is a disjointed system of self-imposed regulations that fail to hold companies accountable when abuses arise, according to labor advocates and technology executives.

"They are absolutely toothless," said Tom Fallon, chief executive of Infinera, a Sunnyvale, Calif.-based maker of telecommunications equipment that hasn't joined the EICC because Fallon says the group isn't effective. "I don't think they do meaningful work."

Wendy Dittmer, a spokeswoman for EICC, said she doesn't know of any instance of a factory losing business, permanently or temporarily, for failing to live up to the group's code of conduct. The EICC doesn't require companies to share those details about their relations with business partners, she said.

Technology companies are under scrutiny for working conditions at Foxconn Technology Group and other manufacturers' Chinese plants, where the world's best-selling gadgets are assembled.

Workers making Apple products log 11 hours of work a day, six days a week, while production speeds are so high that workers aren't able to rest while making iPads, according to New York-based China Labor Watch.

Employees have been exposed to dangerous aluminum dust, the group said. Foxconn installed safety nets and hired counselors and psychologists in response to multiple suicides in 2010.

Amid the criticism, including a New York Times investigation highlighting Foxconn's labor conditions, Apple opened factories to the FLA, a Washington-based nonprofit organization, and said that the group would inspect plants owned by three of its largest manufacturing partners.

Apple last month also listed its suppliers for the first time. The company has disclosed instances of rights violations in an annual progress report since 2006, though it has never specified where or at which suppliers the violations occurred.

Foxconn also said Feb. 18 that it was raising wages to $290 a month, double the level of three years ago.

No other technology company has sought membership in the FLA, said CEO Auret van Heerden.

The group was founded in 1999 to address working conditions in the apparel industry, and most of its 34 member companies come from that business, including Nike and Adidas.

Unlike the EICC, FLA member companies must agree to disclose their suppliers and to submit to unannounced visits from the FLA or third-party auditors. The FLA also posts results of all audits on its website.

The 67-member EICC, a trade group founded in 2004, doesn't require companies to stop using suppliers or manufacturers regardless of their record on treatment of workers. It dictates only that "members commit to continuous improvement," said Dittmer, the group's spokeswoman. Apple also is a member of the EICC.

When it comes to ensuring factories' ability to reliably make a quality product, most companies in the EICC insist that all factories earn certifications to ensure a plant can reliably deliver high-quality products.

The EICC doesn't require any such certification regarding the treatment of workers. Member companies may choose an EICC-sanctioned outside auditor, usually paid by the company. Yet, companies aren't required to make the results of their audits public or share them with the EICC. Each company owns the results of its audits, Dittmer said.

A drawback to both the FLA's and EICC's approach is that inspections often don't include suppliers further down the supply chain, said Mike Fawkes, a former supply-chain executive at Hewlett-Packard, the world's largest maker of personal computers.

A handheld product like the iPhone has hundreds of parts, many of them made by small companies in China.

The EICC was formed when large U.S. technology companies sought to create an industry code of conduct.

Almost all of them had outsourced most of their production in the previous decade and had watched as Nike and other apparel makers came under criticism for child-labor violations and other workplace issues.

"None of us wanted to get Nike'd," Fawkes said.

Some executives said it's unfair to demonize Western technology companies, which outsourced production to Asia to deal with competitive pressure to keep prices low, since workplace norms are so different in China.

In addition, many workers in China were young people from the countryside who wanted to make as much money as quickly as they could, said Michael Marks, former CEO of Flextronics International, the world's largest contract manufacturer before Foxconn's rise a decade ago.

"Most Chinese workers at that point in time wanted as much overtime as they could get," he said. "If we tried to limit them to 50 hours, we'd get complaints."

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