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Fair Labor Association too easy on Apple, Foxconn, study says

An economic policy think tank says the FLA's "rosy" review of factory practices are "unfounded," particularly with ramped up iPhone 5 production.

Apple hires Foxconn to make most of its iPhones. Foxconn, in turn, hires hundreds of thousands of Chinese to do the labor. The jobs are in such high demand that workers line up at recruiters outside Foxconn's Zhengzhou factory. Many of the recruits in this group brought suitcases in case they land jobs at other Foxconn factories in China.
Jay Greene/CNET

A nonprofit organization criticized the Fair Labor Association's review of Apple's largest supplier in China, saying consumer demand for the iPhone 5 has unraveled any potential improvements in working conditions at the Chinese factories.

The Economic Policy Institute (EPI), an economic policy think tank focused on the needs of low- and middle-income workers, criticized the Fair Labor Association in a briefing paper published today, saying its "rosy" determination that a "genuine transformation is under way" in Foxconn's factories are "unfounded."

CNET has contacted the FLA, Apple, and Foxconn for comment and will update when we hear back.

The EBI paper said Foxconn is far from being in line with fair labor regulations, and continues to hold back pay and push employees to work long hours, skirting the problems with poor attempts at reform. The Apple supplier is continually in the media hot seat, with its most recent blemishes including an admittance to breaking child labor law by employing underage interns and a court case over a man who allegedly suffered brain damage from a work-related accident.

iPhone 5 Sarah Tew/CNET

The EBI paper cited these media reports, as well as a 2012 report from activist group Students and Scholars Against Corporate Misbehaviour and the FLA's own report report, to illustrate its criticism.

"In contrast to the FLA's glowing assessment, improvements in working conditions at Foxconn have in most cases been modest, fleeting, or purely symbolic, while some key reform pledges have been broken outright," the EBI paper reads.

The FLA's report in Augustsaid Foxconn was showing progress and implemented several new worker health and safety practices. The report also noted that the company's biggest hurdle would be continuing to reduce work hours to below 60 hours a week without sacrificing employee wages. The legal limits are 40 hours a week plus an average of 9 hours overtime.

The EBI's paper said the FLA's report examined conditions in June and early July of this year, when it was not a peak period for production and easier for Foxconn to improve labor conditions.

"The evidence suggests that, even if those improved practices did prevail during the period analyzed by the FLA, they were not sustained as iPhone 5 production intensified," the paper reads. It also notes that China media reported that factories "coerced" its student interns to extend their internships to work on iPhone 5 production.

The paper goes on to detail reportedly overlooked overtime hours -- citing a SACOM report that said employee overtime on some iPhone production lines reached 100 hours per month -- and alleges that the factory continually fails to pay employees for back pay owed for time spent in mandatory trainings and meetings. The process, according to the paper, is made more complicated by high turnover rates at Foxconn, poor representation on the union leadership committee, and poor record-keeping on Foxconn's part. The EBI is said the poor-record keeping of hours and pay are a violation in itself, one that the FLA did not note.

Unlike issues that are harder to quantify -- for example, the degree to which health and safety committee meetings actually serve as a meaningful vehicle for workers to influence factory practices -- the back pay issue is one where progress can be measured very easily. Apple and Foxconn were either going to fulfill their back pay promise or break it. They broke it. Hopefully, they will reverse course, a result that will be more likely if the FLA does not continue to defend the companies' position.

The paper concludes not by further knocking down the FLA, but with a dig at Apple.

"The paramount issue remains whether Apple will ever choose to apply its legendary business prowess and spirit of innovation, and its enormous financial clout, to the goal of pro- tecting the basic human rights of the people who make those products," the paper reads.