This past January, Apple (Nasdaq: AAPL) became the first technology company to join the Fair Labor Association, a group that monitors working conditions in the developing world. Now, Apple has announced that the first inspections of its own factories have already begun -- at the express invitation of Apple.
Here's why it doesn't matter if Apple really cares about lousy overseas working conditions, but why it does matter that Apple is aware enough to do something about it.
Brand accountability
The Fair Labor Association was created in 1999, and is a collection of socially minded corporations, universities, and civic organizations trying to improve factory life for workers across the globe. The FLA does this through a "Workplace Code of Conduct," supplemented with an inspection process.
The driving philosophy behind the FLA's work is, as the organization puts it, a "brand accountability system" that puts the burden of standards compliance on the member companies. Given the vastness of the emerging industrial world, and the almost countless number of factories that populate it, the voluntary nature of this system is a necessity.
Coming completely clean
There are two pieces of breaking news here. First, that Apple has requested the FLA come in and inspect its suppliers, final-assembly suppliers to be exact, so soon after joining. Factory owners will give their full cooperation to the inspectors.
Second, Apple has asked the FLA to reveal the names of the factories the organization will be inspecting, something outside the norm. As such, we know the inspectors are, or soon will be, looking at Foxconn facilities in Shenzhen and Chengdu. In the spring, the Quanta and Pegatron facilities will also be inspected.
In total, the inspections will cover the factories where more than 90% of Apple's products are built. Results from the first set of inspections will be posted on the FLA website as early as March of this year.
Of course, it's not just Apple
This is a substantial inspection of Apple's supply chain, and as Foxconn has received the bulk of the bad press in recent years for workplace issues, it's as good a place as any to start this FLA assessment. In 2010, 12 Foxconn workers committed suicide, and in early January of this year up to 200 workers at a Foxconn factory threatened mass suicide over workplace conditions.
Of course, Foxconn makes products for more companies than just Apple. The employees recently threatening suicide were making Microsoft's (Nasdaq: MSFT) Xbox, a product the tech stalwart is counting on to revive its tech credibility and keep it relevant to the next generation. Foxconn is also manufacturing the Kindle Fire 2 for Amazon.com (Nasdaq: AMZN), the flagship tech product the online-retailing giant is counting on to carry it forward into the digital age.
Foxconn is also a supplier for Nokia (NYSE: NOK), the mobile-phone giant desperately trying to stage a comeback with a new lineup of smartphones. The last thing Nokia needs is for any sort of bad press to come out of one of its suppliers and derail attention from the company's new product push.
Let the ends justify the reasons
Let's face it, bad press is the last thing any company ever needs, especially in this day and age. Real change is afoot. Consumers are becoming more and more socially conscious, and want the goods and services they use to measure up.
Apple may be doing all this just to clean up its slightly tarnished image, but it doesn't really matter in the end. So long as companies have recognized that issues like proper workplace conditions or environmental safeguards actually figure into the bottom line, that's all that matters, because that ensures that action will be taken.
And if businesses have a stake in this, then investors do, too. If you own even a single share in a company, you want management to be on top of this sort of thing. It's in everyone's best interest, not the least being the workers on the assembly line.
Now, no companies are perfect in this regard, but to paraphrase Voltaire, it's important to never let the quest for the perfect drive out the good. Looking for similarly forward-thinking, profitable investments like Apple? Read about two more Motley Fool favorites that are healthy, wealthy, and making a difference in their own ways in the special free report "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." Get your copy while the stocks are hot by simply clicking here now.
