Rotten Apple

No one will argue that Apple makes visually stunning products: sculpted metal, sleek curves, and bright glass. Since Steve Jobs took the helm for a second time (after bombing with NeXT) the company rose from alt-obscurity, to mainstream media darling. There is no other technology company (maybe even no other company at all) whose products are received with such grandiose fanfare. Apple's product releases are like holidays to their fans who line up for hours to hear the turtlenecked man speak, and make glorious fodder for bloggers. I mean, HTC makes some beautiful phones, yet no one is so interested in taking the damn thing apart and examining every last crevice, or pouring over nondescript and vague patents (okay, fine I'm guilty of it..). They have seemingly out of nowhere, become a shining beacon of American export. The Shanghai store mimics the flagship downtown New York cube-store and is rivaled only perhaps by the Beijing branch in Sanlitun, or the store in the Ginza district of Tokyo. People are crazy about these products not only domestically, but in China as well... I mean the Shanghai branch was literally cloaked in gigantic red drapes, and literally guarded by ninjas on top of it. Unfortunately, some of the people who make these products have actually gone crazy.

They have done so not from fandom mania, but because of the work environment created by the outsourcing of a supply chain so as to cut down on production costs and maximize profit for Apple. By having an extremely segmented supply line and using individual manufactures for separate parts, Apple has in a way limited itself from exposure largely to the fact that these companies would be shut down in the United States for how they treat their workers. This is not to say that Apple is the only company responsible for this type of practice -- they are not -- but given their prominence in international economics (I mean, they have a higher market capitalization than the US government) they should certainly be looked at long and hard, as we consider our developing relationship with China. Encouraging an exploitative relationship has been allowed to flourish, not the least of which is China's vast (though dwindling) supply of labor, lax regulations, and an export-driven economy. The problem is, that because Apple is an international company these sales, where the real value is made -- with the sale of the finished product, not assembling or sourcing of parts -- China, and god forbid their workers, benefits little from their massive profits.

Foxconn, who produces some of the most complex individual components for Apple products, including touchscreens, has become the prime example of unexpected exposure for international companies with the practices outlined above. They have had a rash of employee suicides stemming from question corporate practice, and numerous other companies in the supply chain have had large-scale unease, complaints, and protestation for the negative and unregulated impact of chemicals used in production on employee health, and local quality of life as effected by unregulated and damaging emissions, and dumping practices. None of this is new information, but something that is new is the second part of a report called 'The Other Side of Apple II' (Part II found here, and Part I here) by five environmentally focused NGOs: Friends of Nature, The Institute of Public and Environmental Affairs, Green Beagle, Envirofriends, and Green Stone Environment Action Network.

The exploration is compelling, and I highly recommend you to read or at least skim parts of it to get a sense of how far these negative and damaging practices go. Despite a strict regulatory framework, pollution and dangerous chemical standards were, well, standardly ignored. It was your all-too-typical leaving a box blank on a form, botching some figures, and some outright disregard as well. Local rivers surrounding these factories have toxicity levels that make them nearly useless for farming, let alone evening thinking about using it as a potable water source. This is a just the continuation of a broken cycle in the agrarian countryside where a minute number of individuals are already entrusted with the literally impossible task of feeding their nation. What is interesting, is that an increasing number of individuals, and in fact, employees are finally getting fed up with this shit -- many leaving their jobs despite no other immediately viable employment opportunities.

Eventually, China is going to have to own up to its own 'standards', but for now as lax regulation reigns supreme in an export-driven, money-crazed CCP focused on maintaining obviously unsustainable levels of economic growth, there doesn't seem much hope. There are only two occurrences which could lead to China actually caring about this type of issue (rather than Wen Jiabao's wonderful rhetoric, followed by predictably falling out of view, and subsequent inaction). Firstly, they regional governments will become disempowered by the fact that the central government realizes that such environmentally damaging practices are actually limiting their long-term growth (which no one seems to care about, yet feel fine on chastising the West for acting as such, but that's another article...) losing what academicians Elizabeth Economy out of the Council for Foreign Relations, and Vaclav Smil out of the University of Manitoba to have estimated to the tune of one-third of a trillion dollars squandered due to political fallout, corruption, employee compensation (minimal), and most of all inefficiencies. When this amount of money starts mattering to the central government (and it's hard to undersand how it doesn't) international firms will start to have to care about how they act, or else risk being boxed out of the most stable, and potential-laden global economy -- one that will remain as such for a good 5-7 years depending on how fast civil unrest can spread. It is sad that companies and governments only pay mind when money is involved, but if that is the reality, so be it. As for now, companies should think about their image (and who cares more about theirs than Apple?) by doing the morally responsible, respectable, and correct thing by taking slightly more care, paying their workers a little more, and thinking long-term about how they want to be thought of, rather than simply the quarter-by-quarter P&L breakdown.

Or maybe I'm just unrealistic.