Juana Rocha | May 2021
Multinational corporations (MNCs) have been at the center of controversy due to the impacts they have on countries’ economies, environment, and people, especially in developing countries. Less developed countries not only gravitate multinational corporations towards them because of their seemingly relaxed laws but because of the money that they can save by exporting jobs to these countries. Multinational corporations take advantage of the system and find ways to go around corporate social responsibility policies while profiting off of those that are impacted the greatest. Apple’s business practices do not meet its obligations to developing countries as they take advantage of labor laws in China and have little regard for environmental protection.
Apple is a multinational corporation that relies on hundreds of suppliers to bring to life their products, through materials, assembly, and manufacturing, especially in countries that are less developed (Apple, 1). These countries are based primarily in China and other Eastern Asian countries. Workers in China, who work for Apple’s suppliers, are the main stakeholder when it comes to Apple’s corporate social responsibility in less developed countries. These workers are the most vulnerable because they rely on their workplaces and governments to protect them from MNCs exploiting them, and yet they are still being used irresponsibly. In an article by Ralph Litzinger, he collaborated with a Hong Kong activist labor organization and found that “labor is one of the most explosive issues in China, that the body of the laboring subject is worked to the bone” (Litzinger, 176). Through reports and firsthand experiences, it was reported that the workers were overworked and under-compensated. They are the stakeholders, who are the most impacted by Apple’s use of labor laws in China and who are the group with the least say.
Among the stakeholders, governments in less developed countries (LDCs), are also greatly impacted by Apple’s use of their people and land. These governments, whose focus is growing their economies, are faced with the benefits and disadvantages that MNCs bring to their countries. China has benefited from the manufacturing of Apple products in their country because it has increased their exports. Having MNCs like Apple in China provides the country stability in employment and benefits their economy positively because of the constant need for China’s labor workers (Litzinger, 174). With Apple looking at other countries like India to move manufacturing plants, China’s best interest is to collaborate with Apple to keep as much work there instead of other countries.
Communities of people that live in areas where rare ear metals are extracted are also a large stakeholder because their health and land are being compromised at the expense of Apple increasing their profits. Apple’s products consist of rare-earth metals, that are largely found in China (Rodriguez et. al, 2). These materials are hard to recycle later in the product's life making it very harmful for these communities, not only through the waste but through the extraction of getting these metals (Ives, 1). As a result, extraction has “severely damaged surface vegetation, caused soil erosion, pollution, and acidification, and reduced or even eliminated food crop output” (Ives, 2). The communities are left with soil that cannot be used for agriculture, which they heavily rely on for income. The methods of obtaining the rare metals impact the environment and cause health concerns in the communities surrounding them.
Lastly, Apple consumers who buy their products are also impacted by Apple’s current practices in regard to labor and environmental protection. Consumers have been found to look for items that are environmentally friendly with the growing attention to being eco-friendly (Reinecke and Donaghey, 2). As consumers look for products that are environmentally better, Apple has to also develop products with the least environmental impact. Apple’s labor practices, specifically in their suppliers, are an interest for consumers both for holding them socially responsible but as well as their interest in maintaining the cost of products down.
Apple’s obligations to less developed countries, through its business practices, can be evaluated using corporate social responsibility principles. As MNCs do business in LDCs, it is assumed that they follow these principles. First, all MNCs should have the interests of labor workers, especially those employed by their suppliers, first, and not take advantage of the corporate benefits of offshoring jobs to LDCs. Labor laws in these countries are often relaxed and intended to exploit workers. By making the connection of labor rights to human rights, these workers can be seen as people instead of as tools to give MNCs large profits. Second, all MNCs should make it a priority to protect the environment by evaluating the impact they have and making the necessary changes to decrease their input. Apple’s use of less developed countries gives them leeway to follow their environmental laws that are also relaxed. With pressure on Apple to act responsibly in countries with laws that disregard the importance of environmental protection, they still do not follow these principles of corporate social responsibility.
Unable to follow labor practices is one reason in which Apple does not meet its obligations to less developed countries. With Apple’s long list of manufacturers, there are many companies with different roles that are a piece of Apple’s puzzle to getting their products made. Apple’s dependence on companies like Foxconn, which employs thousands of workers, is crucial to the production of their devices (Yi, 2). These workers assemble, manufacture, or get the materials to make the products and are often overworked, given poor working conditions, and are often mistreated by their employers. A factory town in China, named Foxconn China, is one of the largest contract electronics manufacturers in the world (Yi, 1). This factory town is used by many MNCs including Apple to manufacture some of their products. One of the methods used in this factory town is quotas given to workers to follow production timelines. Because of the strict quotas given, if they are not done in time, the workers are forced to work overtime. These factories give their workers, unrealistic quotas, to get them to work longer hours with poor pay. Apple’s part in the exploitation of Foxconn China workers was primarily exceeding the number of part-time workers that are allowed by China’s labor laws. They used temporary workers as a way to avoid having to pay them full wages, and these workers usually received $3.15 per hour because of their worker status (Yi, 3). Apple’s disregard for the treatment of the workers that make their products goes against the corporate social responsibility policies, and does not meet its obligation to China, as it allows for the workers to be mistreated.
Apple’s disregard to change their environmental practices also gives another reason as to why they are not meeting its obligations to less developed countries, like China. Apple has taken advantage of countries whose environmental laws are not as strict as other countries, to save money on production costs, while still being portrayed as following environmental regulations. China’s environmental laws have recently been in the spotlight because there was a long period where they had not been updated. China has been conflicted with the economic impacts that an environmental policy would have, as it would push MNCs to look towards countries that have less restrictive environmental laws (He et al., 134). China has been improving its environmental policy laws by focusing on taxing corporations that contribute a large amount of pollution to the environment (He et al., 133). Taxes for Apple would make a small dent in its profits and would allow it to continue to work around the laws. Recently, Apple has been provoked to respond to its action towards suppliers who are violating environmental laws, and they responded by emphasizing the use of audits of all of their suppliers. These audits though are often meant as a warning and are not followed through, and the suppliers do not make any changes (Barboza, 1). Apple’s failure to take action on these suppliers is contributing to the environmental impacts in China and the rest of the Earth.
While Apple does not meet its obligation to LDCs, some objections believe the contrary. One of these objections is that Apple is following all laws that are in place in these LDCs and therefore, follow the principles of corporate social responsibility. Apple’s auditing on suppliers they contract is done by the book. The methods of extracting metals are also legally done according to China’s laws. While it may seem that they are following the principles of corporate social responsibility due to their compliance with laws put in place, they are not thinking of the stakeholders that are being impacted due to their practices. They are taking advantage of the eased regulations, by doing the bare minimum that is asked of them. While they are following the laws that China has put in place, they are not considering the principles of social responsibility that corporations of Apple’s size should be implementing. Instead of offshoring jobs to other countries with stricter laws, they found countries that exploit their workers with poor labor laws and those with less environmental protection laws that put out a large number of carbon emissions amongst other environmental factors.
Another objection to Apple’s obligations to LDCs is that Apple is not exploiting their workers, as they are not its direct employees. Apple is hiring suppliers and other third-party companies to make its products. It is not responsible for every single worker that these companies hire, as the responsibility is too distant to make the connection. While Apple does not employ these workers directly, it is giving these companies work. This work can be given to companies who do take care of their employees and do not exploit them. Apple’s disregard for the hours of overtime that are not paid, minimal wages that are not enough to provide for worker's families, and managers harassing workers with unrealistic quotas, only brings to light the little importance this has to them. Apple fails to meet the corporate social responsibility principles because it does not take harsh action against companies that mistreat their employees.
In conclusion, Apple’s business practices do not meet the obligation it has in developing countries. By finding legal loopholes and using the relaxed laws in place in countries like China, Apple misuses the power they have as an MNC to profit off workers who have no say in the laws that are meant to protect them. Apple’s failure to follow the corporate social responsibility principles regarding labor laws and environmental protection also fails the workers who make Apple’s products.
Works Cited:
Barboza, David. “Apple Cited as Adding to Pollution in China.” The New York Times, The New York Times, 1 Sept. 2011, www.nytimes.com/2011/09/02/technology/apple-suppliers-causing-environmental-problems-chinese-group-says.html.
He, Guizhen, et al. “Revising China's Environmental Law.” Science, American Association for the Advancement of Science, 12 July 2013, science.sciencemag.org/content/341/6142/133.full
Ives, Mike. “Boom in Mining Rare Earths Poses Mounting Toxic Risks.” Yale Environment360, 2013, e360.yale.edu/features/boom_in_mining_rare_earths_poses_mounting_toxic_risks#:~:text=A%20half%20century%20of%20rare,with%20a%20%E2%80%9Chigh%20concentration%E2%80%9D%20of.
Reinecke, Juliane, and Jimmy Donaghey. “The Roles and Contradictions of Multinational Corporations in Developing Workplace Dialogue.” Wiley Online Library, John Wiley & Sons, Ltd, 23 June 2020, onlinelibrary.wiley.com/doi/full/10.1111/joms.12585?casa_token=NVwcDzaHZCkAAAAA%3A-_inQ7CzRXgIWEtfGNhtsXA6F0CB_dVAz13vIKgMYE8KWQpCEOZ-Eghh_VilUv6pK6nbSHpYZS06XsCG.
Rodriguez, et al., Emily. “IGo Green: A Life Cycle Assessment of Apple’s IPhone.” IDEALS, University of Illinois, 2015, www.ideals.illinois.edu/handle/2142/73760.
“Supplier Responsibility.” Apple, www.apple.com/supplier-responsibility/. 2019. PDF file.
Yi, YongJin. “Labor Exploitation at Foxconn China.” The Borgen Project, Lynsey Alexander, 22 Feb. 2020, borgenproject.org/labor-exploitation-at-foxconn-china/#:~:text=People%20commonly%20refer%20to%20the,contracts%20Foxconn%20to%20produce%20electronics.