Apple Inc. (NASDAQ:AAPL) and other tech giants allegedly have a dirty secret they don’t want iPhone owners or tech consumers to know. A recent Bloomberg report from Cam Simpson uncovers something that one supplier for Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO), and other companies would probably want to remain covered.
Flextronics International Ltd. (NASDAQ:FLEX), a major supplier for Apple Inc. (NASDAQ:AAPL), is a contract-based manufacturer in Singapore.
Apple’s staffing in Malaysia
Simpson explained the gist: “Staffing production lines in Malaysia, where 28 plants run by 24 companies worked on Apple Inc. (NASDAQ:AAPL) contracts last year, usually goes this way: companies tap an informal, largely unregulated, and transnational network of thousands of recruiters. They fan out, often hiring sub-recruiters, into the farm fields and impoverished cities of Indonesia, Cambodia, Myanmar, Vietnam, and even into the Himalayas in Nepal. The positions they’re trying to fill are so coveted that they’re not merely offered, they’re sold. The brokers take fees from families, representing as much as a year or more of wages; frequently the fees are paid with loans that can take years to pay off.”
During the rollout for the fifth generation iPhone, one Flextronics International Ltd. (NASDAQ:FLEX) recruiter contacted four brokers in the Nepal capital of Kathmandu during the late summer. They were seeking about 1,500 cameras for the iPhone, and needed builders. Although it was initially implied that the brokers would get paid by Flextronic and workers would not get charged, since there was pressure to move many men quickly, they couldn’t have done it without the help of subagents. And those subagents demanded a fee.
A frenzy soon followed.
Surya Bahandari bombarded with phone calls
According to the Bloomberg report, Surya Bahandari, a Nepalese government official who approves permits for foreign workers, was bombarded with phone calls from Nepal and Malaysia. He was asked to waive the seven-day waiting period and issue the permits faster. The now-retired Bahandari claims he was pressured.
Apple Inc. (NASDAQ:AAPL) has been fighting claims of unfair business practices and employee abuse that are often associated with manufacturing. Since the iPhone 5 release, the Cupertino-based tech giant brought up the Apple Supplier Responsibility 2013 Progress Report, which details Apple Supplier Responsibility. Although the report is a step in the right direction, there is still much more that can to be done, and there’s responsibility resting on the shoulders of those who run the factories, as well.