Apple holds off new contracts for Pegatron after code of conduct violations

Apple holds off new contracts for Pegatron after code of conduct violations

As a result, Apple has suspended doing new business with the assembler.

Apple has placed Pegatron, one of its largest manufacturing partners, on probation after discovering the company violated Apple's supplier code of contact. "The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms". In case you were wondering, Apple's actions should not impact the availability of any of the four new 5G iPhone models. But Apple's move hands an opening to rival Luxshare Precision Industry Co, which is on the verge of becoming the first mainland company to assemble the iPhone.

This isn't the first time Apple has faced supply chain trouble - in September 2019, it emerged that Apple and Foxconn, its biggest supplier, broke Chinese labor laws by employing too many temporary workers.

"Pegatron's current iPhone business should not be affected", GF Securities analyst Jeff Pu told Bloomberg.

We've reached out to Apple and Pegatron for comment, and will update if we hear back.

Apple says that its supplier audit program has worked hard to improve conditions and reduce rule breaks at its supplier factories.

Apple spent years upbraiding manufacturers after a rash of suicides at main partner Foxconn in 2010 provoked outrage over the harsh working environments in which its upscale gadgets were made. Apple ended up firing the company and even reported the infraction to local authorities. The company is said to have violated Apple's code of conduct for workers by making student employees work overtime and toil during night shifts.

It said it has taken "quick action" to strengthen its procedures, and will adherence to the code of conduct to metrics used to evaluate senior management.

"Upon detection of this inconsistency, we immediately withdrew student workers from production taxes and provided all necessary support with our client and third-party experts to make the appropriate arrangements for their return to their homes or schools".

Apple said that it did not find any evidence of underage or forced labor at Pegatron.

Apple added the contractor had falsified paperwork and misclassified some of the workers, to disguise the violations. It also said the executive in charge of the student work programme had been fired.

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