A report by The Economic Times claims that the Karnataka government might involve Apple in the ongoing investigation of riots and employee exploitation at Wistron’s factory in India. Although Apple has put the iPhone manufacturer under probation after it found Wistron in violation of the supplier code of conduct, under the local law Apple can be summoned for questioning along with Wistron.
On December 13, workers at the Wistron Karnataka plant resorted to violence over unpaid wages. The angry mob broke glass doors, sets furniture and cars on fire, stole iPhones, and caused damages worth $60 million. The plant was inaugurated in August, and the manufacturer hired 10,000 workers to officially assemble iPhone SE for local demand and other products. Unfortunately, only a few months into operation, the plant was vandalized and the investigations of the incidents have found that the plant’s HR team did not manage salary payments and working hours efficiently.
Apple might join Wistron Karnataka plant investigation
Under the State law which hold’s the employer’s responsible for labour law violations, people familiar with the issue have told the publisher that Apple might be asked to share findings of its investigation
“Apple could be asked to share details of its investigation with the labour authorities/court,” said one of the persons cited above, adding that a series of connected Supreme Court and high court rulings upheld that the primary employer’s responsibility.
“According to the Contract Labour (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principal employer is ultimately responsible for it,” said one of them. This implies that the authorities can seek explanations from both Apple and Wistron.
It is further mentioned that Wistron’s probation and halt on production will have lasting affects on the manufacturer.
This probation could impact Wistron’s ability to meet its production linked incentive (PLI) targets. Under the scheme, overseas companies have to produce smartphones worth Rs 4,000 crore over the base year’s production along with investment of Rs 250 crore through the first year, a target that Wistron is likely to miss, said industry executives. The incentives add up to 4-6% of such additional sales.
Wistron has accepted responsibilty for the HR lapse and removed the senior executive incharge of the plant’s operation, this incident has highlighted the issue of labour expolitation in developing countries where workers are not given the standard wage and are made to work longer hours. Apple’s action against the long term supplier, Wistron sends a strong message across the company’s supply chain to ensure that all labour is treatment fairly. Neil Shah of Hong Kong-based tech researcher Counterpoint said that “Apple has sent a strong message to its suppliers, telling them unequivocally that they need to adhere to its standards.”