Amid talk of iPhone 12 supply shortages, Apple puts key supplier Pegatron on probation for breaking supply chain rules about workforce
Apple is demanding that one of its key suppliers take action, after it reportedly violated the iPad maker’s supply chain rules.
According to the BBC, Apple placed Taiwanese firm Pegatron on probation after it asked students to work night shifts and overtime at one of its plants in mainland China.
The issues comes as Apple is grappling to meet demand for its newly launched iPhone 12, which has forced the firm to ramp up production of older iPhone models to compensate for expected shortages of its new iPhone 12 during the Christmas shopping season.
Supply chain violation
The iPhone 12 and iPhone 12 Pro models began shipping on 23 October, with the 5G iPhone 12 Mini and iPhone 12 Pro Max to ship this week.
Into this comes the news that Pegatron has been censored by Apple after it reportedly falsified paperwork and misclassified some of the workers, to disguise the violations.
Pegatron said that once it had become aware of the issue, it was fixed.
But according to the BBC, Apple says it will not award the firm any new business until further “corrective actions” are completed.
Apple said that Pegatron had breached its Supplier Code of Conduct by allowing students to carry out work which had no connection to their studies.
“The individuals at Pegatron responsible for the violations went to extraordinary lengths to evade our oversight mechanisms,” Apple reportedly said in a statement.
Apple also reportedly said the executive in charge of the student work programme had been fired.
According to the BBC, Pegatron acknowledged that the problem was uncovered by Apple’s monitoring programme, and said it had subsequently taken immediate action.
“Some student workers at Pegatron Shanghai and Kunshan campus were identified working night shift, overtime and in positions unrelated to their majors, which were not in compliance with local rules and regulations,” it reportedly said.
Those affected were taken off production lines and given “proper compensation”, and an external audit has been commissioned to strengthen procedures, it added.
Companies such as Foxconn, Pegatron, Wistron all assemble the iPhone smartphone.
In March 2018 for example, Apple’s regular audit of its supply chain found a higher number of serious labour and environmental violations, but overall things had improved for its supplier workforce.