Apple's new ban to rid its supply chain of corruption

Factories manufacturing iPhones often turn to third-party recruiters to bring in extra staff and charge new recruits high fees for starting work.
Photo by Sean Gallup/Getty Images
Photo by Sean Gallup/Getty Images

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Apple Inc. has banned the practice.of 'bonded survitude' across its supply chain and revealed that last year its suppliers refunded $3.96 million to more than 4,500 contract workers deemed to have paid excessive fees just to get a job in an iPhone factory.

Factories manufacturing iPhones to tight deadlines often turn to third-party recruiters for extra staff, charging new recruits a month's wages in the process.

The consumer electronics giant, however, now requires factories to pay recruitment fees for employees instead of saddling new workers with the costs.

Apple stated in its ninth annual Supplier Responsibility Progress Report, released yesterday (Wednesday), that its suppliers were informed back in October 2014 that this new rule would be introduced.

Jeff Williams, senior vice president of operations, Apple, told Bloomberg Businessweek that the company is "ok" to bear the fee when paying its suppliers

"We just don't want the worker to absorb that," he added, before calling the practice "in essence bonded servitude.".

Apple has often been in the spotlight over perceptions that workers in emerging markets are not treated fairly so that it can boost profits and recruitment fees have long been a point of contention in the supply chain, often representing a significant portion of a worker's yearly salary.

Apple had previously banned factories or recruitment agencies from charging more than one month's fee and demanded that any excess be repaid to the worker but this new ban requires workers pay nothing. 

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