How Rotten is Apple’s Core? Tax Avoidance and Human Rights Abuses

The Apple brand is not only one of the most famous in the world, it is also the one with the highest value. Although Apple shares have plummeted during the last months, the latest brand value rankings show that the brand remains the best in the world. In addition to this, in the third quarter of 2012 Apple had a market capitalisation of US$ 625 billion, by far the largest in the world, on top of which it had and it had a US $117 billion cash hoard. You would think that a company this size would pay a fair amount of tax, but Apple thinks differently.

The ‘Think Different’ slogan of Apple’s advertising campaign must have gone to the heads of the executives based at Cupertino. If that is where they are actually based. The link between Bono and Apple suddenly has significance that goes beyond the U2-branded iPod: Steve Jobs might have recommended Apple’s tax accountant to Bono, or vice versa.

Not only does Apple try and avoid to pay its debt to society, it places a further burden on its shoulders. Since 2006, increasing evidence has emerged of human rights abuses and health hazards in Apple’s supply chain in China. In stark contract with the beautiful design of its products, manufacturing takes place in Foxconn owned factory cities of an unprecedented scale where labour standards and are routinely ignored, resulting in many tragic occurrences.

Since the supply chain atrocities were first brought to Apple’s attention in 2006, the company has claimed to have made continuous efforts to eradicate problems and enforce higher standards in all of its suppliers. However there is much evidence to suggest that Apple’s initiatives to improve standards in at component manufacturers have not yielded desirable results.

It seems to be a deadlock situation: Apple wants greater profit margins (like any corporation), shareholders want bigger returns on investment (like all shareholders) and consumers want nicely designed and affordable gadgets (you guessed it). This situation undermines a mandate for action and permits fundamental change from occurring. Instead, Apple and Foxconn have applied patches to the flaws in the current production system, causing trouble at component manufacturers to persist. Without external pressure and stricter regulation, Apple will deal with its tax situation in a similar way.

As consumers, we need to be better watchdogs then we currently are. So far, the consciousness raising moments that consumers experienced through the work of NGOs like Students and Scholars Against Corporate Misbehaviour (SACOM) and investigative journalists have been effectively countered by Apple and Foxconn’s aesthetical efforts, leaving NGOs powerless and losing momentum. Consumers and NGOs can prove a powerful tandem in achieving change, and continuing pressure by NGOs harnessing consumer power needs to be one of the driving forces behind changes in labour practices.

 

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