Apple Asks Outside Group to Inspect Factories

By CHARLES DUHIGG and NICK WINGFIELD

 | February 13, 2012, 7:20 PM

A production line in Foxconn City in Shenzhen, China



Responding to a growing outcry over conditions at its overseas factories, Apple said Monday that an outside organization had begun auditing working conditions at the plants where iPhones, iPads and other Apple products are manufactured, and the group would make its finding public.

For years, Apple had resisted calls for independent scrutiny of the suppliers that make its electronics. But for the first time it has begun publicly divulging information that it once considered secret, following a drumbeat of criticism — including coordinated protests last week at Apple stores around the world and investigative news reports about punishing conditions inside some factories.

Last month, Apple released the names of 156 of its suppliers. Two weeks later, Apple’s chief executive sent an e-mail to the company’s 65,000 employees defending Apple’s manufacturing record while also pledging to go “deeper into the supply chain.” And now, the company has asked an outside group — a nonprofit financed partly by participating companies like Apple — to publicly identify specific factories where abuses are discovered.

Technology and other corporate analysts say Apple’s shifts could incite widespread changes throughout the electronics industry, since a lot of companies use the same suppliers. They also said it seemed calculated to forestall the kind of public relations problems over labor issues that in previous decades afflicted companies like Nike, the Gap and Disney. “This is a really big deal,” said Sasha Lezhnev at the Enough Project, a group focused on corporate accountability. “The whole industry has to follow whatever Apple does.”

But it is unclear if the efforts by Apple, whose $469 billion market value is the largest of any company in the world, will be enough to quiet its critics, some of whom had urged Apple to work with Chinese monitoring organizations with direct knowledge of its suppliers in China.

Though some labor groups applauded Monday’s announcement, others complained that the outside auditor Apple chose, the Fair Labor Association, which is based in Washington, was not sufficiently independent. And some critics questioned whether inspections — described by Apple as voluntary — would sharply curtail problems or merely help Apple deflect criticism.

“F.L.A. is part of a corporate social responsibility industry that’s totally compromised,” said Judy Gearhart, executive director of the International Labor Rights Forum, an advocacy group for workers. “The auditing has been proven to be weak, and real solutions need a lot more than auditing. It takes empowering workers.”

http://bits.blogs.nytimes.com/2012/02/13/apple-announces-independent-factory-inspections/?ref=business

As Bank of Japan Meets, Data Show Economic Weakness

HONG KONG — Slowing global trade, a strong currency and disruption from severe floods in Thailand all took their toll on the Japanese economy during the final quarter of 2011, data showed Monday, setting off a contraction that is likely to increase pressure on the central bank to step up efforts to bolster the economy at its policy meeting this week.

The Japanese economy, the third-biggest in the world after those of the United States and China, shrank 0.6 percent in the October-December quarter compared with the previous three months, according to data released by the Japanese Cabinet Office. On an annualized basis, the contraction was 2.3 percent, a sharp turnaround from the 7 percent increase recorded three months earlier, and markedly worse than analysts had expected.

For 2011, a year that was overshadowed by the earthquake and tsunami that hit northeast Japan in March, the Japanese economy contracted 0.9 percent. That was the first contraction since the global financial crisis in 2008 and 2009.

The Japanese economy was severely affected by the March 11 disaster, which killed thousands and crippled manufacturing and supply lines in Japan and beyond for months.

A rebound set in, once manufacturing resumed and reconstruction activity kicked in. But the slowdown in the global economy, which has become more and more pronounced in the past few months, has helped to undermine that recovery, the data showed, while months of severe flooding in Thailand, where many Japanese companies have manufacturing operations, dented output late last year.

The persistent strength of the yen also has weighed on Japanese companies.

The Japanese currency has hovered at about 77 yen per dollar since July, compared with about 90 yen at the start of 2010 and 97 yen in mid-2009, putting an extra burden on exporters by making their goods more expensive for shoppers in the United States.

Earnings reports from several Japanese corporate giants over the past two weeks have underlined this picture.

http://www.nytimes.com/2012/02/14/business/global/japans-gdp-shrank-severely-at-end-of-2011.html?_r=1&ref=business