Apple stops new business with Pegatron that violated the code of conduct

“Apple is committed to the highest standards of social and environmental responsibility and ethical conduct. Apple’s suppliers are required to provide safe working conditions, treat workers with dignity and respect, act fairly and ethically, and use environmentally responsible practices wherever they make products or perform services for Apple”. These are the first words of the code of conduct written for Apple suppliers, who have the duty to respect the rules established in order to collaborate with the American giant. However, a Taiwanese company would not have respected the agreements made. Shortly after the launch of the new iPhone 12 models, the company has to face with an unpleasant issue. 

After several investigations, Tim Cook’s company found out that one of its main suppliers, Pegatron, did not comply with the code of conduct. Pegatron is a Taiwanese company that assembles Apple devices, the labour code was voluntarily violated both in Shanghai and in Kunshan. 

Thanks to the investigations and checks carried out, the American giant shed light on the Taiwanese company by discovering that the executives have falsified documents to allow students to work as if they were normal employees, to work overtime and in some cases to work during the night, against Apple’s rules. Indeed, the code emphasizes that suppliers have the obligation to protect the rights of all student workers through proper maintenance of their records. 

In 2010, the Cupertino company had to face the scandal of the Foxconn supplier company, in Longhuan numerous suicides occurred among employees due to the poor working conditions. After the incident, Apple increased workplace controls. 

Apple, as soon as it discovered the problem with Pegatron, immediately took action by blocking any new contract with the company and declaring that there will be no further collaborations until the situation will be restored. Indeed, as determined by the corrective process, suppliers who violate the rules or show deficiencies face a process for a timely correction of any issue. The event has certainly had positive effects on the competitor Luxshare Precision Industry, which in 2021 will have a good chance of becoming a new iPhone assembler.  
Obviously, the spread of this news also had consequences on the markets, Luxshare’s shares rose by 1% whereas Pegatron’s shares closed down 2.1%. 

Now everyone hopes that the measures taken will have a positive impact on the working conditions of all the employees. As the American company points out, the workers “deserve a fair and ethical workplace” and the suppliers shall uphold the “highest standards of human rights”.