Assembly line at a Foxconn plant in Shenzhen, China. © Bloomberg

More employees of Apple’s manufacturing suppliers broke the company’s rules on working hours and overtime last year, as it raced to overcome production delays and meet initial demand for the new iPhone X. 

Compliance with Apple’s working hours policy fell from 98 per cent in 2016 to 94 per cent last year, according to the company’s annual Supplier Responsibility report. That is the lowest level of compliance since the 92 per cent it reported in 2014, a year when the move to a larger screen with the iPhone 6 spurred huge growth in revenues and profits for Apple. 

Apple’s policy limits working hours to a maximum of 60 hours a week, with only voluntary overtime and one mandatory day off every seven days. The reported drop in compliance last year was accompanied by a larger audit. The working hours of 1.3m people were tracked on a weekly basis last year, including 30 new facilities where standards had to be brought in line with Apple's, compared with nearly 1.2m workers in 2016. 

Apple moved to its current system of measuring working hours in 2012, when it found a compliance rate of 92 per cent across of more than 1m of its suppliers’ employees. It has reported broadly improving trends since then as it worked with suppliers to tackle a deeply ingrained problem of enforced overtime. 

Apple has been praised by campaigners for doing more to audit and improve its supply chain than many of its rivals in the smartphone and consumer electronics markets but its annual reports also highlight areas where it still needs to improve. 

In November the Financial Times reported that Apple’s main supplier in Asia, Foxconn, was illegally employing thousands of students in China to work overtime to assemble the latest iPhone. 

"We have made consistent progress to eliminate involuntary labor in our supply chain,” Apple said in its report. "Year-over-year annual assessments, combined with capability building for suppliers, helped drive the violation recurrence rate to zero in 2017. In addition, since 2013, the total number of debt-bonded labor cases has steadily decreased." 

The company also uncovered twice as many labour and human rights violations at factories making its products in 2017 after expanding its annual audit across its massive supply chain. 

The tech giant found 44 serious breaches of its compliance rules in 2017, including dozens of instances of bonded labour and falsifying working hours as well as two cases of underage workers, according to the report

That compared to 22 such cases in 2016 and came after the company increased the number of facility assessments to 756 across 30 countries, from 705 assessments the year earlier. 

During 2017 three Apple suppliers had foreign contract workers who had been charged recruitment fees – a form of bonded labour described by UN agencies as modern-day slavery. 

“In one case, over 700 foreign contract workers were recruited from the Philippines to work for a supplier through a private employment agency,” the company said, adding that the fees totalled more than $1m. 

The company said it returned $1.9m in “excessive recruitment fees” to more than 1,500 employees last year. 

That compares to $2.6m paid to more than 1,000 people the year prior. It has now repaid $30 million to more than 35,000 workers since 2008.

Additional reporting by Yuan Yang in Beijing

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