Foxconn says investigating labor conditions at China factory used for Amazon

[June 11, 2018]  By Alwyn Scott

NEW YORK (Reuters) - Contract manufacturer Foxconn said on Sunday it is investigating a plant in China that makes devices for Amazon.com Inc, after a U.S. watchdog group criticized what it described as harsh working conditions at the factory.

An Amazon.com Inc driver stands next to an Amazon delivery truck in Los Angeles, California, U.S., May 21, 2016. REUTERS/Lucy Nicholson/File photo

A 94-page report by New York-based China Labor Watch that followed a nine-month investigation cited excessive hours, low wages, inadequate training and an overreliance on "dispatch" or temporary workers in violation of Chinese law at the Hengyang Foxconn plant in Hunan province, which makes Echo Dot smart speakers and Kindle e-readers.

"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 emailed to Reuters.

Taiwan-based Foxconn, known formally as Hon Hai Precision Industry Co Ltd <2317.TW>, is the world's largest contract electronics manufacturer and employs more than a million people.

Foxconn, which also makes Apple Inc <AAPL.O> iPhones, came under fire in 2010 for a spate of suicides at plants in China. Foxconn pledged to improve working conditions.

China Labor Watch said its investigation found that about 40 percent of workers at the plant were dispatch workers, far exceeding the 10 percent limit under Chinese law. Dispatch workers were paid at the same rate for regular and overtime hours, rather than time and a half as required, said China Labor Watch Program Officer Elaine Lu.

"They were underpaid," Lu said. "That's illegal."

Dispatch workers earned 14.5 yuan ($2.26) per hour, the report said. Workers also put in more than 100 overtime hours per month during peak season, far more than the 36 hours allowed by law, and some worked for 14 consecutive days.

Amazon said it 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 it is monitoring Foxconn's response and "compliance with our Supplier Code of Conduct. We are committed to ensuring that these issues are resolved."

Foxconn said in an earlier statement that it "works hard to comply with all relevant laws and regulations" where it operates and conducts regular audits. "If infractions are identified, we work to immediately rectify them," it said.

(Reporting by Alwyn Scott in New York and Reuters Beijing bureau; Editing by Chris Reese and Sandra Maler)

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