Apple Places Supplier Wistron on Probation Following Worker Unrest in India [Updated]

Apple has placed supplier Wistron on probation following unrest at its plant in southern India (via Reuters).

An audit conducted by Apple found that Wistron's Bangalore plant, which manufactures the iPhone SE, showed violations of its "Supplier Code of Conduct." According to Apple, Wistron failed to implement proper working hour management processes which "led to payment delays for some workers in October and November."

Workers contracted by Wistron, angry over unpaid wages, destroyed property, equipment, and stock on December 12, resulting in millions of dollars in losses and the forced closure of the plant. Wistron has now admitted that some workers had not been paid correctly or on time, pledged to restructure its teams, and said it has removed a senior executive overseeing its business in India.

The plant in Bangalore was reportedly set to hire up to 20,000 more workers to manufacture an additional iPhone model, but these plans have now been abandoned. Apple commented that it will not award Wistron any new business until it addressed how workers are treated. The company will, however, continue to monitor Wistron's progress on corrective action.

The Apple probation is expected to delay the company's manufacturing push into India, where it has pledged to invest one billion dollars as it seeks to diversify its global supply chains. The only remaining Apple suppliers with operations in India are Foxconn and Pegatron.

Elsewhere, another labor dispute broke out at an iPhone-manufacturing Pegatron plant in Shanghai, according to United Daily News. Thousands of temporary workers were reportedly unhappy with the announcement that they needed to transfer to Pegatron's Kunshan plant, resulting in "chaotic" mass gatherings as workers demanded reimbursement.

It is now believed that the events in Bangalore and Shanghai have put significantly more demand on Zhengzhou, which contains the largest iPhone assembly plant.

Update: A report from the Economic Times is now citing legal expertise suggesting that Apple may also be held responsible for the labor violations in Bangalore.

"According to the Contract Labor (Regulation and Abolition) Act, 1970, the contractor is responsible for payment of wages and the principal employer is ultimately responsible for it," said legal experts speaking to Economic Times.

This means that Indian authorities are able to seek explanations from both Apple and Wistron, legally implicating Apple in the causes of the unrest.

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