Foxconn Issues Investigation of Labor Conditions at China Factory Used for Amazon

Amazon.com, Inc. (NASDAQ: AMZN) plant in Hengyang, China that makes Echo Dot smart speakers and Kindle e-readers, is under investigation by worlds largest Taiwan-based contract electronics manufacturer Foxconn that is formally known as Hon Hai Precision Industry Co Ltd (TPE: 2354), said on Sunday, due to reports of harsh, illegal, and inhumane conditions.

A New-York based China Labor Watch that conducted a 9-month investigation released a 94-page report of a detailed description of multiple illegal and ferocious practices being carried out in the factory. It cited excessive hours, low wages and inadequate training including an overreliance on “dispatch” (temporary) workers in violation of Chinese law.

“We are carrying out a full investigation of the areas raised by that report, and if found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct,” Foxconn Technology Group said in a statement that was emailed to Reuters.

Following the string of suicides in 2010 from Foxconn owned plants that made Apple, Inc. (NASDAQ: AAPL) iPhones and had a very negative impact on their ambiance, they pledged to improve working conditions.

The China Labor Watch said its investigation found that approximately 40 percent of workers at the plants were dispatch workers which exceeds the Chinese law that limits it to 10 percent. Additionally, they were paid half the rate of regular and overtime hours, which require time and a half, at 14.5 yuan ($2.26) per hour and put in more than 100 overtime hours per month during peak season, which extremely surpassed the law 36 hours. Some worked for 14 days consecutively.

“They were underpaid,” said China Labor Watch Program Officer Elaine Lu, “Thats illegal.”

Amazon claimed they audited the factory in March and found overtime and use of dispatch workers were “issues of concern.”

“We immediately requested a corrective action plan from Foxconn,” Amazon said in a statement. It said they would further monitor Foxconn's response and “compliance with out Supplier Code of Conduct. We are committed to ensuring that these issues are resolved.”

Foxconn commented that it “works hard to comply with all relevant law and regulations” where it operates and conducts regular audits. “If infractions are identified, we work to immediately rectify them,” it said.

Foxconn has a lot to answer to and should be held very responsible for the inhumane conditions they are putting their workers through. When you silence the problem it only stays the same or grows.

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