Apple probes key Indian contractor after violence erupts at facility

Wistron threatens to cut production and labour unrest in the contract maker’s Bengaluru plant, posing an added challenge for Apple in India

Apple probes key Indian contractor for labour unrest
Police guard Wistron's iPhone plant in India as workers turn violent over pay issues. Photo: Reuters.

(ATF) Violence that erupted at Apple contractor Wistron's Bengaluru factory poses another challenge for the US tech giant, as it depends on India as part of its "China plus" strategy.

Apple has been looking to step up its marketing and presence in India - one of the biggest smartphone markets in the world - and also aims to expand its sourcing footprint in the South Asian nation.

As it brings more suppliers to India to take advantage of a huge and cheap labour force, along with new government incentives to lure manufacturing, Apple needs to make sure its contractors are following its manufacturing guidelines.

Apple’s latest challenge stemmed from a violent attack on Wistron’s plant on the outskirts of India's tech hub of Bengaluru on Saturday, when thousands of contract workers gathered demanding unpaid wages and better working hours.

Denying the allegations, Taiwan's Wistron said it was “deeply shocked” and claimed it followed the law and safety rules for the wellbeing of its employees. In a police complaint, Wistron, whose workers are not unionised, accused more than 5,000 contract workers and around 2,000 others of destruction of property.

Wistron is reportedly deliberating whether it should continue with its expansion plans in India. It opened the plant near Bengaluru earlier this year, as part of a multi-million dollar investment in India and employs about 12,000 people. Only around 1,200 are permanent staff, while others were hired on a contract basis.

Industry association MAIT says India has very well laid out grievance redressal platforms and laws to protect the interest of workers, and “strongly condemned the vandalism incident,” but Apple is not convinced.

Apple said in an email to Reuters that its own teams were “on the ground and have immediately launched a detailed investigation at Wistron's facility," and added that it is investigating whether Wistron flouted supplier guidelines.

Past headaches

While Apple also said that it was dedicated to ensuring everyone in its supply chain was treated with dignity and respect, Saturday’s episode is just the latest labour violation-related issues that Apple has faced in the region.

Apple had to suspend business with the iPhone assembler Pegatron in November for instance, when the Taiwanese manufacturer was found to be breaking rules limiting student employee work hours for its factories in China.

Apple stopped any new business to the major assembler of iPhones with factories across China until it took corrective measures, and fired the Pegatron executive in charge of the student employment program.

In September last year, China Labour Watch also alleged that Apple and its manufacturing partner Foxconn violated a Chinese labour rule by using too many temporary staff in the world’s largest iPhone factory. Both companies reportedly accepted the allegations following investigations by authorities.

Meanwhile, blaming the vandalism at Wistron’s plant on “anti-social elements”, George Paul, the chief executive officer at MAIT, told Asia Times Financial: “It is not an issue of poor working conditions. India has well-laid out labour laws, and factory inspections to protect the interest of labour; all that is so well in place that you can’t do that [deny fair treatment to labour] in India”.

India is host to many global companies that have chosen the country as a preferred destination for manufacturing across sectors like electronics, pharmaceuticals, telecommunication, automobiles and others, without labour issues, MAIT added.

(With reporting by Reuters)

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Apple Inc Indian plants IPhone in India Foxxconn Wistron Labour Unrest Pegatron