A coalition of Chinese environmental groups, including Friends of Nature and the Institute of Public and Environmental Affairs, this week drew attention once again to pollution and poisoning in Apple’s China supply chain. The contamination of communities by suspected Apple suppliers including Meiko Electronics and Kaedar Electronics is shocking, and the sight of pollution victims begging for help distressing. But the US$300 billon IT giant appears to pay no heed. Shrugging off responsibility, it merely says “it is our long-term policy not to disclose supplier information”.
This is not the demeanour we should expect of a leading corporation.
The new consensus
There are those who defend Apple, saying it has no factories in China and no responsibility for pollution created by its suppliers. Legally speaking, this is correct, but it runs counter to the industry tide. In many sectors, particularly electronics, a consensus is emerging around Extended Producer Responsibility (EPR). EPR means firms are not only responsible for the businesses they manage directly – that they own or control – but also the whole life-cycle of their products. Proper management includes explicitly banning the use of toxins or harmful substances in electronic goods, and the appropriate handling of discarded electronics at the end of their useful life.
And so the social and environmental responsibility of a brand extends out from the shop floor in two directions – backwards to design, manufacturing and assembly; and forwards to recycling, reuse and disposal. In some jurisdictions, this consensus has been recognised in law. The European Union, for example, has its directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment, which places all responsibility for the product on the producer. Similarly, the Waste Electrical and Electronic Equipment Directive requires brands to pay for the recycling of their own products.
Recent years have seen the EPR concept broaden. When calculating the carbon footprint of their products, for example, some firms include the carbon dioxide emitted during the manufacturing process – originally considered to “belong” to the supplier. And, when it comes to environmental transparency, Global Reporting Initiative (GRI), an international organisation that produces an index of CSR reports, believes firms should not just make their own environmental data public, but also that of associated companies over which they have strong influence or control.
As the new report from the Chinese NGOs, entitled The Other Side of Apple II, points out, “various sources of information show that Apple is deeply involved in supply-chain management”. It is clear that Apple has strong influence over those companies. According to the principles presented by GRI, we have, at the very least, cause to believe Apple should bear partial responsibility for publishing details of pollution by its suppliers. Apple’s refusal to say anything is both unreasonable and unbecoming for a company of its stature. The popular American movie Spiderman got it right: “With great power comes great responsibility”.
Winning the public vote
Steve Jobs and Apple are well known for pursuing their own path, often earning opprobrium in the course of doing so. A few days ago, US technology blog Business Insider published an article called “The 10 Dumbest Things Steve Jobs Has Done” – these included advising an iPhone 4 user to “avoid holding it that way” when the new handset model was beset by reception problems, and not openly engaging in charitable activities. His stubborn nature is there for all to see, and the chances of Apple owning up to its errors are as good as zero.
If they wish to make Apple lower its proud head, the only option for NGOs is opposition and pressure. With a corporate giant on one side and a cluster of campaigners on the other, it may look like an unfair battle, but civil-society groups are not necessarily fated to lose.
I believe the key to victory lies with popular opinion, with consumer power. Apple’s strength largely comes from its unique product design and marketing methods: nobody can question its excellence here. For many, Apple isn’t just about electronic products – it’s fashion.
If NGOs want to land a real blow to Apple, they need to use NGO values to destroy the Apple values already established in the marketplace. They need to get a clear message to consumers: Apple is not fashionable – and it pollutes the environment; using Apple doesn’t make you trendy – and it might contribute to cancer. The message needs to be both precise and fashionable, because the target audience are trend-followers. Slogans and tragic images will have little effect. On this front, NGOs can learn from Apple: they should look to its marketing ideals and methods, and use its own techniques against it.
For the NGOs, this is to be a prolonged fight, a protracted, guerrilla war – one that could have a lasting impact on Apple and shake the foundations of its brand. Workers’ groups opposed to sweatshops struggled for years to get Nike to change its supplier policy without success. But once student groups joined in, there was a real change: the firm took an active interest in social responsibility issues in its supply chain, and that interest continues today. Why? Because students are Nike customers. History may repeat itself with Apple.
Better laws needed
Of course, in the long term it is crucial to reflect what is right and reasonable in legislation. Only an improved legal framework and strict enforcement can bring about real change. There are two steps needed here: first, the joint liability that brands bear for regulatory breaches by their suppliers needs legal definition. Problems like those surrounding Apple today would then become legal problems, while the ethical risks the company faces would become legal or even financial risks – and be taken more seriously as a result.
This kind of joint liability is not unreasonable: it is like the middleman who knowingly sells on stolen goods for a profit – he isn’t a thief, but still bears responsibility. Of course, in actual implementation there will still be technical issues, such as the need to be clear as to whether or not the brand knew of the suppliers’ breaches, or even if it forced the breaches. These matters are for the legal draftsmen to work through.
The second necessary step is stronger enforcement of the law on suppliers, using measures such as factory closures or sales restrictions to indirectly strike at the brand’s procurement. The illegal pollution problems described in The Other Side of Apple II are very common. In theory, existing laws could be used bring the companies involved to account, to be fined or ordered to make improvements. But we need to ask: are local governments actively enforcing the law? Are the fines and costs of rectifications high enough? Will there be an indirect impact on the brand in question – in this case, Apple?
If environmental law enforcement does not have that indirect effect, then it will be seen to be irrelevant. But if the government orders suppliers to make changes, or restricts production or sales in such a way that the brand’s procurement plans are affected, and if that happens often enough, then the brand itself will decide to check its suppliers’ environmental standards to protect its own interests. And supply-chain pollution will be prevented by the design of the system.