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From Tax Dodging to Toxic Sweatshops
Apple’s Top Crimes of 2013
by NICKI LISA COLE

Recently Cult of Mac, a website dedicated to all things Apple from the fan’s perspective, published a piece titled “The Biggest Apple Stories of 2013.” In it, the author recounts the product and software highlights, sales, profit, and hires for the world’s largest company. The piece is a toast to capitalist greed and the smarmy, self-righteousness of the kings of Silicon Valley. Notably, other important Apple stories, listed below, were not on this list.

The Environmental & Social Horrors of Mining for its Supply Chain

In July protests at several Apple Stores were organized by Friends of the Earth to spotlight the implications of mining tin in Indonesia. Tin is used for soldering Apple products. Miners have been injured and killed, the silt run-off from mines poses a threat to coral and sea life, and the deforestation that follows increased mining causes acidification of soil, damaging the region’s small farms and rural communities.

Income Inequality & Gentrification

In recent months protesters in the San Francisco have targeted the private corporate busses used by Apple, Google, and Facebook to ferry their affluent, gentrifying employees to and fro Silicon Valley. Protesters call attention to the role tech companies play in driving up housing prices, and the consequential purging of middle and low income residents from the area. They are also upset that these private coaches have been using the city’s Muni stops for free, while others have pointed out that privatized transport for a huge pool of regional workers undermines public transportation.

Tax Dodging

Apple continues to come under fire in the US and the UK for its tax dodging scheme, cleverly nicknamed “iDodge Tax” by Irish comedian Mark Thomas. In June Thomas led 50 people in a protest outside of Apple’s London flagship store against the corporation’s use of Ireland as a tax shelter. Protesters pointed out that one of Apple’s holding companies, Apple Sales International, paid only 0.0135 percent in tax on its $74 billion in earnings in 2012. Thomas noted that schemes such as these have contributed to the economic austerity gripping Europe.

A few weeks later more than 60 protesters crowded a Chicago Apple Store to draw attention to the same issue, pointing out that low-income Chicago residents pay more percentage-wise in tax than does the world’s most valuable company. Like their UK counterparts, they drew a connection between the use of tax shelters and the nationwide defunding of education and human services. Chicago in particular has been hit hard this last year with school closings and teacher layoffs.

As Eileen Appelbaum pointed out on CounterPunch back in May, Apple’s CEO Tim Cook is pushing a corporate tax reform measure that would even further lighten Apple’s already low US tax liability.

iBeacon is Watching You

iBeacon, a new feature in iOS 7 that Apple claims acts as a “personal shopper,” went live in early December. The app guides i-device toting Apple Store customers to products, and updates employees on customer orders. The app uses push technology to let iPhone customers know if they are eligible for an upgrade while they browse in the store.

The technology is poised to be deployed by retailers all over the world, requiring only an iPad or iPhone with iOS 7 to serve as an iBeacon device within a store. TechCrunch reports that as many as 190 million iOS devices are iBeacon-ready, and this number will swell to over 250 million soon. An Android version is in development.

The scale of this consumerist technology is unsettling, as is its surveillance function. While Apple has taken a public stance against the widespread digital surveillance of the PRISM program, despite its historical compliance with it, the company clearly has no moral qualms about using surveillance technology for its own profit.

Fueling the “Apple Picking” Phenomenon

Last year Apple spent $1 billion on advertising—a small investment given its brand is valued at over $98 billion–making it the most valuable brand in the world. The iPhone, with its high price point and value as a status symbol, is a lucrative theft target. A stolen iPhone can fetch as much as $200 domestically and far more overseas. Mobile security firm Lookout estimates that the annual value of lost and stolen smartphones is $30 billion.

The Federal Communications Committee reported that 1.6 million Americans were robbed of a digital handheld device (smartphone or tablet) in 2012. Statistics from around the country reveal that most of those were Apple iPhones, and that the iPhone fuels the trend. In Washington, D.C. between the release of the iPhone in 2007 and 2011, thefts of mobile phones increased by 54 percent. In both San Francisco and New York City the rise in thefts of handheld devices has caused a spike in the crime rate, which is otherwise trending downward. In San Francisco, where nearly half of the population owns an iPhone, half of all thefts in 2012 involved a smartphone, while nationally the rate is one third. In London this year about half of mobile phones stolen were iPhones.

Law enforcement officials nationwide, lead by San Francisco District Attorney George Gascón, began this year advocating for a “kill switch” that would render a stolen phone unusable. Apple responded by building into iOS 7 a feature that does just that. While this might stem the tide of thefts, this feature does nothing to address the root of the problem—the rampant global income and wealth inequality generated by global corporations like Apple.

Sucking Los Angeles Schools Dry to the Tune of $1 Billion

Apple announced in June that it had signed a $30 million contract to supply iPads to all 650,000 students in the Los Angeles Unified School District. The largest public school system in the nation, LAUSD planned at the time to equip every student, teacher, and administrator with a device by 2015. The school board voted unanimously in favor of the project, which would ultimately cost the district $1 billion.

Apple’s press release quoted board member Jaime Aquino as saying they chose the iPad because it was the cheapest tablet option, coming equipped with the Pearson Common Core System of Courses, Apple’s iWork, iLife, and iTunes software, and other educational software.

The iPads themselves will cost $500 million at $678 per device, with the other $500 million allocated to expenses like installing wireless networks at each school. The program will be paid for with long-term construction bonds, and the district plans to use the devices to not only implement the Common Core curriculum, but also for upcoming state standardized tests.

However, since the initial celebratory rollout at the start of the school year, the Los Angeles Times has run a series of articles detailing a range of problems with the program, including the questionable use of long-term construction bonds to pay for the project, and students unlocking the devices for other uses and leaving them at home. In the first month 71 iPads went missing, and by mid October the district had begun recalling them from some campuses.

The LA Times also revealed that the $1 billion plan had hidden costs, like an additional $100 per device for software updates until the district reaches the $400 million purchase mark with Apple, and an additional $38 million, as yet approved, for the purchase of keyboards.

Yet, despite the problems, and teacher, parent, and union dissent, the board approved the second phase of the project in November. LAUSD will spend $135 million more for the purchase of another 70,000 iPads, as well as MacBook laptops for all students and teachers at the district’s 7 high schools.

Public dissent seems to have had some impact on the costly plan, as the school board voted in late December to reduce the number of iPads planned for the next rollout, saving the district $25 million. Further, a school board oversight committee has asked for more evidence justifying the necessity of iPads for state testing.

With programs such as these Apple’s iPad has cornered the education market. There are 10 million iPads in schools around the world today, accounting for nearly all of educational tablets shipped during the first half of 2013. LA Times reporter Steve Lopez pointed out in April, prior to the finalization of the deal spearheaded by LAUSD schools superintendent John Deasy, that “people with ties to tech companies were among the major donors to a political action committee that supports Deasy-friendly school board candidates,” including a $250,000 donation from “the parent corporation of a company that sells tablet computers designed for schools,” and a $200,000 gift from “a group headed by the widow of Apple founder Steve Jobs.” Politically oriented donations such as these seem to be paying off for Apple, which according to a November study by IDG has seen its tablet shipments increase by nearly 50 percent since 2012.

Ongoing Labor Abuses in China

While Apple might have joined the Fair Labor Association in 2012 and may have carried out audits at some Foxconn facilities, the horrific labor abuses that plague Apple’s Chinese supply chain continue unabated. Reports from Hong Kong based SACOM (Students and Scholars Against Corporate Misbehavior), China Labor Watch, and the newly formed “New Generation of Migrant Workers Concern Programme” detail systemic labor violations at eleven Chinese Apple suppliers.

These reports detail similar problems across suppliers, including very low pay, excessive and forced overtime, up to 14 hour shifts and 100 hour work weeks, standing for 11 hours at a time, increased use of insecure dispatch laborers, employment of underage and forced student workers, a military-style of management with prohibitions on bathroom breaks and inadequate lunch breaks, and unsafe work environments.

Placing the blame for these conditions squarely on Apple, SACOM reported, “The rampant labor rights violations at Foxlink, Pegatron and Wintek are rooted in the rush purchasing practices and failure of effective monitoring by Apple. The excessive overtime, the use of dispatch labor and harsh management practices are the results, directly and indirectly, of the short delivery time demanded by Apple before it launches new products. Furthermore, all the three factories have longstanding business relationships with Apple. The problems reveal that Apple does not care about the systematic violations at its suppliers.”

Despite its cooperation with FLA and promise to allow workers to form democratic unions, in January over 1,000 workers struck at Foxconn in Fengcheng, Jiangxi Province. They demanded increased wages and a dignified work environment, noting they earn only $209 USD per week, which is not considered a living wage in the region and does not allow for the support of a dependent. They also called for better safety equipment and a higher standard of living in dormitories, as soldering workers are not equipped with fresh masks with enough frequency, and they lack access to hot water in dorm bathrooms, forcing them to limit showering to only once per week.

In May a study by “The New Generation of Migrant Workers Concern Programme” found that Foxconn’s promise to allow workers to unionize was nothing but a PR sham, as workers had not been educated about China’s Trade Union Law, and half had not been notified of their legal right to vote for union leadership, nor of their right to run for office. They also found that most workers mistook employment at Foxconn for membership in the union, and that 95 percent of those interviewed didn’t know if they really were union members. Troublingly, they also found that workers who called in complaints on a union hotline had experienced retaliation from managers, and that complaints had not been resolved.

Another report released by SACOM in May stated that at keyboard supplier Sunrex Computer 169 workers were poisoned by contaminated drinking water between the months of May and September 2012. A drinking fountain had been connected to a sewage draining system for the spray-painting department, causing workers who drank the water to suffer dizziness and fatigue, weakened immunity, abdominal pain, and disordered liver function. Though they require continued treatment the factory is refusing to pay for it, denying responsibility for their illness.

In July China Labor Watch released a blistering report on labor conditions at three Pegatron facilities, including the one in Shanghai where the as yet released lower-cost iPhone 5C was in production. The researchers found through undercover investigation problems consistent with other factories in Apple’s Chinese supply chain. They also found 10,000 underage and student workers out of 70,000 employees across the three sites who are not given the protections for minor workers required by Chinese labor law, are paid less than the average worker, and are forced to work by their schools and pay fees to the school.

In September China Labor Watch released another report detailing similar conditions at a the US owned Jabil supplier in Wuxi where the plastic back for the iPhone 5C is produced. They found through an undercover investigation and interviews with 80 workers that the 30,000 employees who share one cafeteria are left with only 5 minutes to eat after traversing the campus and passing through multiple security check points. Given the low wage they receive, even two combined salaries are insufficient for raising a child in the area.

In late November SACOM released a report detailing unsafe and sickening work conditions at Biel Crystal’s Huizhou factory, which supplies 60 percent of the glass used in Apple products. In addition to the typical labor violations, SACOM also found troubling safety and health hazards. Though workers rely on noxious and flammable chemicals the researchers found no fire escapes, nor accessible fire extinguishers. Workers had not received fire safety training, and had not been informed of the potential dangers of working with chemicals, some of which were mislabeled.

Some workers were poisoned due to high levels of acetone vapor in the factory, and some suffered eye injuries due to lack of safety googles. According to the US Agency for Toxic Substances and Disease Registry, when not handled properly in unventilated environments acetone can be highly dangerous, causing irritation of the nose, throat, lungs, and eyes, as well as headaches, light-headedness, confusion, increased heart rate, nausea and vomiting, and even fainting and coma. Workers at this factory suffered crippled limbs in addition to serious bodily injuries. In response to the report Apple thanked SACOM for engaging with the supplier but did not acknowledge responsibility or take any action.

Most recently in December, China Labor Watch announced that three Pegatron Shanghai workers had died after working through peak production periods. Shi Zhaokun, just 15 years old when he succumbed to pneumonia at Shanghai Shuguang Hospital, was in good health when he passed the company’s physical examination upon his hiring in September. Between then and his death on October 9 he worked 12 hours per day on Apple product lines.

Indeed, 2013 was a big year for Apple.

Nicki Lisa Cole is a sociologist who writes about global supply chains and consumer culture. She has written for Conducive Magazine, Imagined Magazine, Pacific Standard, Sociological Images. Her chapter on Apple’s supply chain, co-authored with Tara Krishna, is featured in Project Censored’s recently published volume Censored 2014: Fearless Speech in Fateful Times. She is the founder and head writer of the blog 21 Century Nomad, and is writing a book about Apple.