Apple's Appalling Ethics

Earlier this year, Apple announced that it had hired an outside organization to investigate charges of forced overtime, child labor, and other miserable working conditions at the Chinese factories that make many of its i-toys. Then, just a few days ago, came a New York Times investigation into the low pay of American workers at the company's chain of snazzy retail stores.

For Apple customers with their heads buried in their iPads, the stories were a shock. But for environmental, labor, and other social responsibility advocates, the only new part was the publicity.

Veteran activists are constantly astounded --or cynical --at the way Apple has somehow been granted status as an "ethical" company.

And these two labor exposes only start to unpeel a bruised Apple that its acolytes don't really want to know about.

"Apple has a very current, leading-edge brand. So the consumer has always believed that the company must be environmentally and socially responsible as well," Wood Turner, the founding executive director of ClimateCounts, a nonprofit that rates businesses on their efforts to reduce carbon emissions, told me when I interviewed him for my new book Ethical Chic.

After all, Al Gore is on the board of directors. Gandhi endorsed the iPhone. (Or at least, Apple used Gandhi's image in its 1997 "Think Different" ad campaign.) And all the hippest, smartest, most socially concerned people you know probably have Macs and iPods, and they care about the environment.

But in reality, Turner said, Apple "hasn't been meeting the same bar that other companies in the [electronics] sector were."

That's right. When it comes to business ethics, Apple is a follower, not an innovator.

Consider the Chinese factories. To be even-handed, I should note that Dell, Hewlett-Packard and other electronics biggies also subcontract work to these places. Let's even give Apple credit for bringing in the Fair Labor Association to audit the conditions - although anti-sweatshop campaigners consider the FLA relatively weak, compared with other monitors.

However, where was Apple before this winter? Where was it, for instance, in 2004, when Dell, IBM, and HP formed the Electronic Industry Citizenship Coalition to write a code of conduct for overseas factories?

Conditions and pay are much better at corporate headquarters in Cupertino, of course. Still, Apple is the only major Silicon Valley denizen never to have been named one of Fortune's "100 Best Companies to Work for." Why not? It has the requisite volleyball court and sushi bar. The problem is that it also has micro-management and paranoia.

Eco-activists are particularly annoyed at Apple's undeserved green halo. Although it has improved a lot in the last few years, the company still huddles at the bottom of its industry in the rankings of environmental groups like ClimateCounts; it didn't even make Newsweek's annual list of "100 Greenest Companies in America" until 2010, when it premiered some 60 spots behind Dell, HP, IBM, and Intel. Greenpeace targeted Apple in a consumer campaign in 2006. Socially responsible investors such as the Interfaith Center on Corporate Responsibility and As You Sow consider it a laggard in many areas, including recycling programs and disclosure of environmental goals. The company has refused to join Ceres, a big coalition of businesses that focuses on sustainability, or the Eco-Patent Commons, an organization formed in 2008 by IBM, Nokia, Sony, and other tech firms to share environmental ideas.

"Share"? "Join"? So not-Apple.

Apple's worst ethical sin, though, is its obsession with secrecy.

The anecdotes are so extreme that they're sometimes funny. (Journalist Daniel Lyons actually turned this into comedy in his 2007 satire Options). The phony packaging and black cloaks within Apple's own offices, to disguise the shapes of products under development. The banning of all titles published by John Wiley & Sons from Apple stores, because Jobs didn't like a particular 2005 Wiley book about him, iCon. The fact that almost every article or book about the company contains the sentence: Company officials refused to comment. (Yup, my book has that line, too. See page 84.)

But it's not funny. It's not funny when officials are so close-mouthed about the fatal illness of an iconic CEO who personifies the company, that they mislead investors who might well have sold their shares if they knew the CEO wouldn't survive much longer. It's not funny when a company sends the sheriff after a blogger who posted photos of a new iPhone before it was officially released.

Secrecy is not funny, because open information may be the most important ethical value of all.

Without information, how can consumers, investors, employees, neighbors, and activists know whether a company is spewing pollutants, hiring subcontractors that abuse workers, testing on animals, using dangerous chemicals, firing union organizers, and all the other qualities that contribute to the definition of social responsibility? Apple's secrecy has historically been the key factor dragging down its ratings at Greenpeace and ClimateCounts, for instance.

The new CEO, Timothy Cook, may be starting to get the message. Apple published the Fair Labor report on its Chinese factory, and its Greenpeace score has improved.

Perhaps, we should use our MacBooks and iPhones to contact Apple, over and over, and demand more information.

Fran Hawthorne is the author of the new book Ethical Chic: The Inside Story of the Companies We Think We Love.