CAMBRIDGE, England — I have been a user and supporter of Apple since I was a toddler. I cannot remember the first time I used a computer, but I know it was my dad’s Mac SE, a prized family possession. Since then, I’ve been through Performas and iMacs, PowerMacs and MacBooks, and countless iPods along the way. Apple was for me not just a product, but a passion. So it was with particular satisfaction that I became a shareholder a few years ago.
Like many other Apple customers and shareholders, I consider my relationship with the company not merely fiduciary or transactional, but personal and emotional, as well. We buy Apple products and hold Apple shares because we believe in the company, not just as a producer of electronics or a guarantor of returns, but also as an institution.
Perhaps that is why I receive the news of poor working conditions in factories contracted by Apple with such a heavy heart. It pains me, in the way that the excesses or moral failings of a trusted colleague or dear friend might.
But whatever emotional discomfort I feel pales in comparison with the actual suffering of many thousands of Chinese workers. The growing murmurs about abuses, malfeasance, and suicide in the factories of companies contracted by Apple have reached a fever pitch. That these events occurred at all — from the use of the neurotoxin n-hexane to clean iPhone screens to safety violations that led to deadly explosions — reflects poorly on us all.
The full litany of transgressions need not be repeated here. They are common knowledge and I hope no Apple employee or shareholder is unaware of them.
At the same time, Apple deserves credit where it is due. These are four promising developments:
— Apple has released the names of its suppliers.
— Apple has contracted with the Fair Labor Association to conduct independent audits of a selection of factories.
— The Fair Labor Association will, at Apple’s request, break from its usual policy and identify factories in its reports.
— Major apple supplier Foxconn will increase its workers’ salaries.
These are important first steps to improve the supply chain, but they are only just first steps. There is much more to be done. It all falls under a few basic principles:
— Transparency and redundancy: “Trust us, we’re Apple” isn’t going to fly anymore.
— Action speaks louder than words.
— Human and labor rights are an investment.
One frequent critique of commissioning the FLA is that it is sponsored by the companies whose supply chains it inspects. This funding approach is reasonable given the expensive undertaking with which the FLA is tasked. Nevertheless, redundancy is good. Apple must increase its transparency with respect to other NGOs, responding in an honest and forthright manner to queries from bodies with a strong human rights track record and true financial independence from Apple and other manufacturers. (In this vein, one hopes the reports that Apple is penalizing the New York Times for its reporting on these matters are false.)
Greater detail in Apple’s Supplier Responsibility Progress Report would set the tone for this. Apple should:
— Include in the report the total number of factories in the supply chain and the number that have never been audited.
— Provide greater year-over-year information. The 2012 report states that “the vast majority [of facilities] improve their audit scores year-over-year.” Seeing the actual figures will help to assess whether implemented action plans are effective.
— Release compliance grading sheets for all factories audited.
— Open the auditing process for review by international human and labor rights NGOs.
— Prospectively set more clearly-defined benchmarks for suppliers and define the consequences for failing to meet those benchmarks.
It is imperative that greater clarity and transparency lead to more direct action. While Apple does already conduct a considerable amount of auditing, few suppliers lose their contracts on the basis of violations. Suppliers must know that Apple is as serious about rights as it is about efficiency, as committed to human decency as it is to the bottom line.
Suppliers can only absorb so much of the costs of these changes. It is clear: Apple will have to pay more. Apple can afford it and, as shareholders, so can we. Since the end of December, Apple’s share price has increased over 25 percent and its market capitalization has risen byover $100 billion. The company has more than $30 billion cash on hand. The largest company in the world, whose value continues to grow at an astonishing rate, can afford to make sure it brings its workers along.
If Apple insists that working conditions are a priority, they will be, but if it pushes its suppliers to cut their expenses by any means necessary, there will be a human cost.
Today is our annual shareholder’s meeting. Given the strong financials and great outlook for the company, it is a time for celebration. But more importantly, it is a time for reflection. My own piece of this company is infinitesimally small, but even if held just a single share it would carry with it a moral responsibility. For that reason, I pledge to donate 10 percent of my net earnings from Apple stock as of March 1, 2012, to labor rights causes.
Mr. Cook, your responsibility — and that of the rest of the board of directors and major shareholders — is even greater. Not only are the financial rewards you reap from the company far more substantial, but you have the ability to steer Apple. I urge you to adopt a policy of transparency and accountability in pursuit of a labor rights record of which we can all be proud.
Apple must be more than insanely great. It must become insanely good.
A version of this letter has been sent electronically to Apple C.E.O. Tim Cook.