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Apple working on labor issue at iPod plant

Apple Computer Inc. said Wednesday it was working to resolve a dispute over alleged labor abuses by an iPod manufacturer in China.
/ Source: The Associated Press

Apple Computer Inc. said Wednesday it was working to resolve a dispute over alleged labor abuses by an iPod manufacturer in China.

Hongfujin Precision Industry Co., a major exporter owned by a Taiwanese company, filed a defamation lawsuit against two journalists at the state-run newspaper China Business News who ran stories alleging that workers on iPod assembly lines worked under harsh conditions for low pay.

According to local media reports, the Shenzhen Intermediate Court, in the southern export hub of Shenzhen, accepted the case on July 10 and froze the personal assets of the two journalists, Wang You and editor Weng Bao, of the Shanghai-based paper.

Chinese media and a journalists’ advocacy group, Reporters Without Borders, have criticized the move and urged Apple, which has vowed to ensure fair treatment of workers at its suppliers, to intercede.

“Apple is working behind the scenes to help resolve this issue,” an Apple spokesman, Jill Tan, said Wednesday. She said she could not comment further.

Apple’s iconic iPod players are made abroad, mainly in China. The Cupertino, Calif.-based company has sold more than 50 million iPods since the product debuted in 2001.

The case highlights the difficulties major corporations like Apple, under intensifying scrutiny from shareholders, face in ensuring that subcontractors in distant lands comply with labor and environmental standards.

At the same time, it reflects the mounting pressures Chinese journalists face in carrying out their jobs.

Reporters Without Borders sent an open letter to Apple’s chief executive, Steve Jobs, urging him to persuade Foxconn to drop its case against the journalists.

“We believe that all Wang and Weng did was to report the facts and we condemn Foxconn’s reaction,” said the letter, signed by Robert Menard, secretary-general of the group. “We therefore ask you to intercede on behalf of these two journalists so that their assets are unfrozen and the lawsuit is dropped.”

Taiwan-based Foxconn Technology Group, which owns Hongfujin, has denied the allegations of labor abuses, although Apple issued a report earlier this month acknowledging some violations of its corporate code of conduct.

Staff who answered the phone at Hongfujin’s office Wednesday in Shenzhen refused to take any media inquiries.

Earlier, Foxconn issued a lengthy statement defending its labor policies and detailing amenities it says it offers to its employees, including “complimentary professional laundry services,” soccer fields, libraries and an Internet cafe.

“Foxconn has been recognized by Shenzhen government as a role model,” it said.

Foxconn is a trade name for Taiwan’s Hon Hai Precision Industry Co. It claims many customers, including Intel Corp., Dell Inc. and Sony Corp. It is one of many Taiwanese companies with operations on the Chinese mainland, despite the political divide that has persisted since China and Taiwan split amid civil war in 1949.

Hongfujin was reportedly China’s biggest export manufacturer last year, with overseas sales totaling $14.5 billion.

Court officials in Shenzhen refused comment Wednesday.

China Business News has given Wang and Weng its unconditional backing.

“Our newspaper will definitely back Wang You and Weng Bao since what they did was not a violation of any rules, laws or journalistic ethics,” said an official in the newspaper’s publicity department. Like many Chinese, he gave only his surname, Yang.

The newspaper, a respected publication backed by several other prominent state-run media groups, ran an article saying the reporter had evidence to support his allegations against the manufacturer.

Wang and Weng, meanwhile, set up a blog recounting their ordeal and reflecting on the risks associated with doing their jobs.

The financial magazine Caijing, meanwhile, accused the Shenzhen court of violating the law in freezing the journalists’ assets.

The allegations against the iPod maker originally surfaced in a report in June by the British newspaper, the Mail on Sunday. It alleged that workers at the factory were paid as little as 27 British pounds ($50) a month to work 15-hour shifts making the devices.

Apple responded by promising to immediately investigate conditions at the factory. It issued a report earlier this month saying that it found some violations of its stringent code of conduct but no serious labor abuses. It pledged to immediately redress some problems with overtime, employee accommodations and administrative issues.

The report discounted allegations of forced overtime, noting that a chief complaint among workers was a shortage of overtime during slack periods.