Apple manufacturer Pegatron discovered the use of illegal student labor in China

After a Financial Times investigation revealed that thousands of student interns had worked overtime to assemble iPhones, Apple reprimanded one of its largest producers in violation of Chinese law.

Apple said after being contacted by the FT that it had stopped giving Pegatron, its second-largest iPhone assembler after Foxconn, “new business.” Workers there, however, said the factory still manufactured new products ahead of holidays.

In order to make up for production delays earlier in the year caused by the pandemic, Apple is racing. During its busiest season for new product launches in years, the latest revelations of supply chain abuses will come as an embarrassment to the company. On Friday, two months later than normal, the latest iPhone 12 models are set to go on sale. Apple is also anticipated to reveal new Mac computers at an event on Tuesday.

Pegatron, which is headquartered in Taiwan but has operations in China, has been one of Apple’s largest producers for several years, producing iPhones, Macs, iPads, and other components. It has also faced recurring allegations from campaign groups like China Labor Watch about working conditions.

“Pegatron isn’t like other factories. They’re going to force you to work overtime: 12 hours a day,’ one former worker said, adding that this was to compensate for rush orders or quitting staff.

Until last month, according to former interns and workers at the plant, thousands of student interns had assembled iPhones at Pegatron’s Kunshan plant and worked overtime and night shifts illegally. When the job is unrelated to their studies, Chinese government regulations prevent students from interning in factories.

The alleged coercive use by students during the peak production periods of the factory mirrors the abuses previously discovered at Foxconn by the FT. To ensure labor supply for large companies in China, schools and local governments often collaborate.

The most recent revelations followed a workman’s death in a dormitory in Pegatron in the mid-thirties last month.

“Apple has positioned Pegatron on probation, and Pegatron will not receive any new business from Apple until all the corrective actions required have been completed,” Apple said.

Apple did not clarify how it defined “new company,” nor what would be the material impact on Pegatron of the “probation,” if any. “The iPhone manufacturer sought to squarely blame its manufacturing partner for the abuses, saying:” The people responsible for the violations at Pegatron went to extraordinary lengths to avoid our oversight mechanisms. Pegatron has now fired the executive with direct supervision of the program.

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