Apple, help suppliers to learn better practices. They help suppliers establish responsibility teams, train leaders, and enhance internal monitoring and remediation. From October 2015 through December 2016, they enrolled 17 suppliers in our Partnership Program.

Apple, also launched a Subject Matter Expert Consultation Program to help suppliers analyze the root cause of Code violations, and to help suppliers improve their systems to detect and address issues as quickly as possible.

By the time the workers have paid fees to all these agencies, the total cost can exceed many months’ wages, forcing workers into debt. We view this as debt-bonded labor, and it is strictly prohibited by our Code.To eradicate bonded labor, in October 2014, we informed our suppliers that, starting in 2015, they could no longer charge any recruitment fees to foreign contract workers employed on an Apple production line. Prior to 2015, Apple required suppliers to reimburse foreign contract workers for any recruitment fees exceeding one month of the worker’s anticipated net wage, irrespective of the length of the foreign worker’s contract. Since our program began in 2008, reimbursements to over 34,000 foreign contract workers totaled US$28 million. From October 2015 through December 2016, reimbursements of more than US$2,600,000 were provided to over 1,000 foreign contract workers.3

Unique to Apple’s auditing process is what happens after the audit. After each audit, we work with suppliers to analyze the root cause of every finding. We then develop customized corrective action plans with supplier management and work directly with key personnel from the facility to correct violations within 90 days. Once a supplier closes all findings from our audit, we arrange to return for a “Corrective Action Verification” to ensure all findings are truly remediated consistent with our standards.5

We consider violations of core elements of the Code to be the most serious breaches. These include, for example, cases of underage and involuntary labor, human trafficking, document falsification and intimidation of or retaliation against workers for participating in audits. All supplier core violations are escalated directly to senior management at Apple and the supplier, and are required to be addressed immediately. When appropriate, we also report these violations to local authorities.5

Any supplier with a documented core violation is placed on probation until successful completion of their next audit. During probation the issue is monitored closely by Apple auditors, and if we believe the supplier is not truly committed to corrective action, we consider terminating our relationship.Since our program began, we have terminated business with 18 suppliers that had serious violations. The names of these suppliers are included on a “Do Not Source List” that is published on an internal website available to Apple employees. When a core violation is identified, in order to ensure that the supplier understands the severity of addressing these violations, Apple issues a Notice of Probation directly to the President or CEO of the supplier, and we work to reduce production volumes at the offending supplier.5