Apple's Foreign Suppliers Demonstrate Widespread Scamming and Horrific Abuse of Employees

http://www.alternet.org/story/153824/apple%27s_foreign_suppliers_demonstrate_widespread_scamming_and_horrific_abuse_of_employees?page=entire

Apple's Foreign Suppliers Demonstrate Widespread Scamming and Horrific Abuse of Employees
Apple's bombshell report on its suppliers shows anti-employee practices as common as iPods. White collar criminologist William K. Black investigates.
January 20, 2012

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...Apple calls its inquiries “audits” and it is apparent that most of its information comes from reviewing written and electronic records at its suppliers. That is exceptionally revealing. The suppliers know that they can defraud their employees with such impunity that they don’t even bother to get rid of records that prove their frauds. Apple has resisted making public its suppliers and the report refused to identify which suppliers committed which violations – often for years despite repeated, false promises to end their anti-employee control frauds. Two other facts are evident (but not reported). First, Apple rarely terminates suppliers for defrauding their employees – even when the frauds endanger the lives and health of the workers and the community – and even where Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices. Second, it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers even when they commit anti-employee control frauds as a routine practice, even when the frauds endanger the worker’s and the public’s health, and even when the supplier repeatedly lies to Apple about the frauds. Apple’s report, therefore, understates substantially the actual incidence of fraud by the 156 suppliers (accounting for 97% of its payments to suppliers). From the New York Times:

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And though Apple said it mandated changes at those suppliers, and some facilities showed improvements, in aggregate, many types of lapses remained at levels that have persisted for years.

The New York Times, the Wall Street Journal, and the Washington Post articles on the Apple report are all lengthy, but none of them has any input from a criminologist and each of the articles misses most of the significance of the report. The most fundamental flaws have to do with why anti-employee control fraud is the norm at Apple’s suppliers and why the suppliers typically don’t even take the inexpensive efforts necessary to avoid holding a paper trail that makes the frauds obvious even to a not terribly vigorous audit that they know is coming.

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These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.

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