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"When a Core Violation is identified, the supplier’s Chief Executive Officer is notified, and the supplier is immediately placed on probation." p. 13

 

 

 

"Examples of consequences resulting from probation include receiving no new projects, no new business, and the termination of existing business with Apple." p. 13

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We consider any violation of core elements of the Supplier Code to be the most serious

breaches. These include cases of underage or involuntary labor, human trafficking, document

falsification, or intimidation of or retaliation against workers for participating in audits.

If debt-bonded labor is uncovered, immediate action is taken:

Debt-Bonded Labor Corrective Action Process:

1. Violation identification - Apple assessor and third-party auditor identify debt-bonded labor violation

2. Violation communication - Apple communicates violation to supplier senior management

3. Signs terms - Supplier signs probation terms and repayment terms

4. Repayment plan - Supplier submits repayment plan for Apple approval

5. Employee payment - Supplier repays its employee

6. Payment verification - Third-party auditor verifies repayment at supplier site.

 

When a core violation is identified, 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. Core violations are required to be addressed immediately. When appropriate, we

also report these violations to local authorities.

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 business relationship.

Apple is committed to continuing our efforts to root out and remediate instances on debtbonded labor from our supply chain. When the Supplier Code is not met, we believe direct

remedy is required. This includes a supplier repaying any fees paid by supplier employees

to obtain their jobs. Since 2008, US$30.9 million in recruitment fees have been repaid to

36,137 employees by suppliers. In 2018, two cases of debt-bonded labor were uncovered

in Japan at two supplier sites. In each case, the supplier was required to repay all fees to

their impacted employees. A total of US$616,000 in recruitment fees was repaid to

287 supplier employees.7

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Failure to comply with Apple’s Business Conduct policy, or failure to report

a violation, may result in disciplinary action up to and including termination of employment or

the end of an individual’s working relationship with Apple.3

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To date, 20 manufacturing supplier facilities have been removed from our supply

chain. Smelters and refiners deeper in our supply chain are held to similar standards

and if they exhibit a lack of commitment to meet our Supplier Code and Standards, they

risk losing Apple’s business. In 2018, five tin, tantalum, tungsten, and gold, and two cobalt

smelters and refiners were removed from our supply chain. The names of these suppliers

have been included on a “Do Not Source List” that is published on an internal website

available to Apple employees. 4