Apple Acts Against Underage Labor

Tickers in this article: AAPL

NEW YORK (TheStreet) - For the past few years Apple(AAPL) has created what the tech giant calls its "Supplier Responsibility Progress Report" documenting how well its suppliers are sticking to the company's rules and demands, especially when it comes to dealing with workers. The Cupertino, Calif.-based firm has just released its seventh annual report and the news is not good for some of its suppliers.

Apple published the results of nearly 400 audits of its hardware suppliers from 2012 and doesn't like what it saw in a few of the overseas plants and factories.

The iPhone maker has already taken action, according to the report. Apple, for example, terminated its business relations with Guangdong Real Faith Pingzhou Electronics after its auditors found 74 cases of workers under age 16.

Apple also discovered the forging of official documents by an employment agency that would allow underage children to be illegally hired by the same supplier. Local officials were notified of the problem.

Guangdong Real Faith Pingzhou Electronics has not yet responded to TheStreet's request for comment on this story.

According to the report, Apple will focus on the use of student interns in its suppliers' factories. That's a potential problem in China where many college students are required to complete internships as part of their studies.

Apple said that its suppliers must follow strict standards when hiring students as interns or apprentices, but noted that "some elements of these programs are poorly run, and the cyclical nature of internship work makes it difficult to catch problems."

"In 2013, we will require suppliers to provide the number of student workers along with school affiliations so we can monitor this issue more carefully," the report added. "We've begun to partner with industry consultants to help our suppliers improve their policies, procedures, and management of internship programs to go beyond what the law requires."

One of Apple's biggest suppliers, Foxconn, has been accused of using vocational high school students in its Yantai, China manufacturing plant to help with a shortage of adult workers.

--Written by Gary Krakow in New York.

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