October 27, 2021

Apple seeks SEC backing to thwart shareholder challenge; SumOfUs warns human lives hang in balance and investors face financial risk due to Apple’s links to Government of China’s abuse of Muslim people

Tech giant Apple, Inc. would have to publicly account for ties between its suppliers and human rights atrocities in China under a proposal introduced by investors representing global consumer rights advocate SumOfUs, an organization with a history of influencing the company’s shareholders and corporate policy. 

In a filing with U.S. Security and Exchange Commission (SEC), Apple has asked regulators for permission to prohibit a shareholder vote on the proposed resolution, which would require the company to publish a report identifying where forced labor may be seeping into its supply chain and the remedies it will take to compensate victims.  The dispute follows reports late last month that corporate watchdog Campaign for Accountability urged the U.S. Customs and Border Patrol (CPB) agency to seize Apple products linked to forced labor abuses that the government of China has inflicted upon its oppressed Uyghur and other Turkic Muslim populations.  

 “Apple says the right things about protecting human rights, but its actions contradict its words,” said SumOfUs Campaign Director Vicky Wyatt.  “Faced with mounting evidence of forced labor in its supply chain, the company refuses to investigate the threat.  Human lives are at stake here -- and so is the reputation of the Apple brand and the value of its investors’ shares.  Apple's customers care about human rights, and the question is whether Apple is really serious about protecting them." 

 Late last year the Tech Transparency Project unearthed documents showing that Lens Technology, a longstanding iPhone supplier, marshaled the resources of thousands of Uyghurs toiling in the government of China’s forced labor program to support its operations – one of nine reported instances since 2017 where Apple’s suppliers were accused of leveraging the captive workers for their commercial benefit.Apple has consistently refused to engage or respond to these reports or any similar evidence presented to the company identifying ties to forced labor. 

 In its shareholder resolution, SumOfUs warns that these practices represent a glaring risk to Apple’s reputation and the resulting potential for adverse repercussions on its business performance. The government of China’s brutal mistreatment of Uyghurs and other Turkic Muslim minorities has incited an international outcry, and the U.S. State Department has characterized it as “genocide.” Forced labor, forced sterilization, and restrictions on freedom of expression and religion are among a range of repressive acts that the government of China has inflicted on an estimated one million of ethnic Muslims, human rights monitors say. 

Meanwhile, SumOfUs notes that pending laws in the U.S. and Europe compound the threat to Apple.  Both Congress and the European Union are considering legislation that would ban products made with forced labor, raising risks that Apple would face obstacles importing products that have already been traced to the Chinese government’s campaign against the Uyghurs. 

For its part, SumOfUs has demonstrated the capacity to move the needle on Apple’s corporate policy, even as the company resists it.  Last year, following pressure generated by another shareholder resolution that SumOfUs proposed — which garnered support from more than 40 percent of Apple’s investors, despite Apple’s pleas to oppose the measure – the company instituted a human rights policy intended to allay concerns about its submission to Chinese  government policies abridging freedom of expression and other core human rights.

 Yet even in the wake of that announcement – as well as its receipt of a 2018 award from Thomson Reuters for its efforts to “stop slavery” – Apple opposed SumOfUs’ 2020 resolution asking the company to report on efforts to protect freedom of expression.  

 The new resolution introduced by SumOfUs members comes as Apple’s resistance to the concept remains intractable even as human rights advocates are calling on the U.S. government to seize and impound Apple products that have been attributed to Uyghur forced labor.  In a complaint filed with U.S. custom’s officials last month, the Tech Transparency Project charged that the products were manufactured with support from suppliers that exploited Uyghur forced labor, conduct that would violate the Tariff Act and lead to possible confiscation of the merchandise.

 The tensions surrounding Apple are smoldering as a bill passed by the U.S. Senate and now pending in the House would outlaw imports from the East Turkestan region, where researchers say the country has perpetrated deplorable abuses against the Uyghur population concentrated there.  Apple was accused of actively lobbying against that legislation last year. 

SumOfUs is a global consumer watchdog policing against corporate practices harmful to workers, the environment, and democracy.  It is funded principally through small-donations from grassroots members worldwide.