Introduction
Immanuel Kant, one of the greatest philosophers of the modern times insisted that every rational human being must be handled as an end and not as a means to an end (Rapatsa, 2015) The main thrust of this normative ethics concept is that all human beings are equal and equally important, thus trampling on the rights of one is as bad no matter the justification. Apple Inc. is one of the largest and most powerful organizations in the world (Merchant, 2017). The company makes computerized devices and gizmos and markets itself as the most innovative tech company in the world. Apple products, from mobile devices to computers are generally more expensive than those of its competitors. This is not only based on the company being among the best innovatively but also being an American company. From a commercial perspective, it has always been easier to market the quality of western products when competing against eastern products where a majority of Apple’s competitors are. It is, however, an open secret that albeit Apple products are designed and developed in the USA, most of the manufacturing work is undertaken in the East (Chan et al, 2013). It is from the perspective of these manufacturing works that the ethical issues that also double up as legal issues emanate. The ethical issue canvassed herein is human rights abuses undertaken by Apple’s direct contractors with Apple’s knowledge and more importantly how Apple has tackled this ethical issue since its advent to date.
Description of the Business Situation
It is unexpected to hear terms such as sweatshop and modern slavery being used in the 21 st century, let alone in the year 2017. It then becomes flabbergasting when the same refers to one of the most prominent companies in the world. This becomes an ethical nightmare upon the realization that the said problem has been brought to the attention of the said company for over a decade. Final consternation is premised on the fact that these sweatshops exist purely for the purposes of profit. Three decades ago when Apple welcomed back one of its founders Steve Jobs, the company was on the verge of collapse. In a few short years, the company was back to flourishing ways and today stands as one of the largest companies in the entire world. Among the flagships of Apple is the iPhone, marketed as one of the most innovative smartphones in the world. Indeed, almost every year, Apple produces another version of the iPhone. These phones are marketed as the very best, a fact that is evidenced by the prices they are offered at. In the US, Apple is among one of the most respected companies and also among the best possible employers (Chan et al, 2013). The best available talent will readily work for Apple based on the attractive terms including remuneration. Other attractive terms include being allowed to think outside the box and take an innovative approach to work.
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That is only one side of the coin that is working for Apple. The other side of the same coin is not to be found in the US, but rather in the Far East. One of the keys to the aforementioned monumental success of Apple is the exportation of labor based services (Chan et al, 2013). Even with the modern level of the high automation of manufacturing, smartphones are so complicated that many of the sensitive gadgets require a lot of human labor. Much of this labor requires little skill but a lot of man-hours . It is this man hours that Apple exports to the Far East. The number of contractors that Apple has in the Far East are numerous and have resulted in an exponentially high volume of scandals. One of Apple’s largest contractor; Foxconn, has been found culpable of perpetrating human rights abuses, which are a major ethical issue for Apple (Chan et al, 2013). The larger ethical issue lies in the fact that for years, Apple has clearly and openly known what Foxconn has been doing. Instead of having the issue resolved in the interest of justice and human rights, Apple has been skirting around the issue, making false promises and dragging the dispute along. With every year that Apple does not resolve this issue, the company rakes in billions of dollars out of the almost slave labor of Far Eastern workers courtesy of Foxconn. Further, for this duration , law-abiding Americans have been paying a premium price for phones tainted with human rights abuses (Chan et al, 2013). This is the essence of the ethical and legal situation that informs the instant essay.
An Analysis of the Ethical Concerns Raised by the Situation
The ethical issue associated with Apple is best analyzed from two perspectives. On the one side, there is Apple Inc. the largest tech company in the world. This is a publicly traded company that also provides direct employment for over one hundred employees. This is without mentioning the hundreds of thousands around the world who make a living by selling and repairing Apple products and another hundred of thousands who work within the Apple’s supply chain. Finally, tens of millions of people around the world use Apple products. These people pay a premium price for the products because they provide a great service for them. Therefore, Apple is not only a very powerful company but also one that benefits millions globally. On the other hand, Apple is at the very least complacent to and perhaps a perpetrator of grievous human rights abuses. In this regard, Apple has contracted a Taiwanese Company called Foxconn, which take advantage of poor laborers in the Far East including the city of Shenzhen, China (Merchant, 2017). Particulars of human right abuses include forcing students to work for no pay in the name of training, underpaying workers yet overworking them and compelling workers to live under squalid conditions in quarters provided by Foxconn. Despite repeated complaints, Apple Inc. has neglected, declined, refused, or failed to resolve the plight of the said workers yet continues to benefit from their labor.
Two Approaches Based on Ethical Theories
The Utilitarian Ethics Approach
Utilitarianism as developed by Jeremy Bentham and John Stuart holds that an action is right if its outcome is beneficial to the wider majority (Broad, 2014). For a start, this is a consequentialist approach as it looks at actions based on the outcome rather than the process. In this regard, therefore, if the outcome is good, then the process is not really an issue. From an Apple perspective, the principal beneficiaries of the company are its shareholders. Albeit Apple is listed at the NASDAQ and trades continually, its ownership entails a small and very privileged group of slightly over two thousand people. However, these are not the only people who benefit from Apple. If the company was to go down, tens of millions of Apple holders who depend on Apple software would be adversely affected. Also affected would be the millions who work for Apple directly and indirectly including within its supply chain. Many shops across all five continents would run out of business leading to loss of work and revenues (Chan et al, 2013). Finally, even the workers whose human rights have seemingly been abused according to credible reports stand to suffer job losses and more poverty in Apple winds up services.
Apple as a company relies heavily on contractors with Foxconn being among the leading ones. These companies provide the kind of labor that cannot be viably availed in the USA. Even if this labor was to become available, it would be impossible for Apple to afford the said labor. This is considering that in some parts of the USA, the minimum wage is as high as US$11 per hour. Operating under the assumption that Apple cannot manage to operate without contractors such as Foxconn (Chan et al, 2013). Further, assuming that at the prices that Apple pays Foxconn, the company can only manage to hirer under the terms and conditions that have led it to be termed as a sweatshop. From a utilitarian ethics perspective, Apple must, for the sake of the majority continue operating as it now does until it is able to arrive at a viable alternative. Under no circumstances should the operations of Apple be interfered with for the sake of the rights of a minority who are also beneficiaries of Apple’s operations.
The Deontological Ethics Approach
The term deontology is credited to C. D. Broad but the concept has been traced back to Bentham. It considers an act to be right or wrong based on an obligation placed upon the actor . If the actor operates according to the obligation placed upon them, then the act is right no matter how it may seem (Conway & Gawronski, 2013). Deontology, therefore, neither focuses on the action nor the outcome but rather the basis for it. Among the principle rules under deontology is that an ethical actor does not break the law or break a promise to a friend. Apple Inc. is an American company, registered as such in the USA and carrying out the bulk of its management work in the USA. The company is, therefore, bound by the rules, regulations, and laws that govern businesses in the USA (Conway & Gawronski, 2013). Further, the company is also ethically bound to adhere to business ethics, morals, and dictates of decency. Finally, the customer body, which is the largest group of Apple stakeholders have a legitimate expectation on how Apple should behave itself. The acts and omissions of Apple as defined above fly in the face of provisions of the US constitution in general and particularly the bill of rights as contained in the Amendments thereof. They are also contrary to laws such as the Fair Labor Standards Act of 1938, Labor Management Relations Act of 1947, Equal Pay Act of 1963 and also the Foreign Corrupt Practices Act (FCPA) of 1977 (Seaquist, 2012). Apple Inc. and its shareholders draw benefits through the abuse of the fundamental rights of others. Further, Apple has made numerous public promises to remedy the situation and at some point even cut ties with Foxconn all in vain. This is clearly against business ethics as well as the dictates of decency and morality. Under the circumstances, Apple must either force its contractors to cease and desist from human rights abuses or discontinue its contractual relationship with them forthwith.
Best Legal Outcome
It is worthy of mention from the very advent that legal outcomes are not the same as ethical outcomes as they are based purely on the provisions of the law. From the ethical perspective above, two possible options are available to Apple. The first is continuing with the contractual relationship with Foxconn until a commercially viable alternative has been found. The other is to either compel Foxconn to change or terminate the relationship because of the legal, moral and ethical implications involved. Both options have legal implications. The instant segment, however, looks at the best legal outcome based on possible legal scenarios.
For a start, if Apple decides to force Foxconn to reform, two things might happen. Foxconn might take it positively and change or seek to terminate their relationship with Apple and sue for damages for breach of contract. This would result in loss of labor for Apple and an expensive lawsuit that Apple stands a good chance of winning. Apple may also suffer a production interference that may lead to several lawsuits most of which they can plead frustration as a defense . The lawsuits may be ugly but eventually, Apple would triumph and perhaps even thrive.
The alternative is equally straightforward . Apple can continue to skirt around the issue and profit from it as it has for many years. Unless and until laws are enforced, they remain mere suggestions. This bliss would continue until something would come up that would cause the laws to be enforced against Apple. For example, a dormitory unit with ten thousand employees may catch fire leading to a thousand deaths and five thousand grievous injuries. The cascade class action suits, criminal and civil charges, Congressional cases and Independent federal agencies that would hit Apple would be astronomical. Around the time Apple was formed in the 1970s, one of the largest companies in the world was McDonnell Douglas. Their first Jumbo Jet, the DC-10 had a defective rear door, and after a small incident in 1972 within the continental USA , McDonnell Douglas was asked to resolve the problem comprehensively. The company failed to solve the issue and soon after in 1974, Turkish Airlines Flight 981 crashed killing 346 people, mostly international passengers bound for Europe, some of the celebrities (Richardson, 2014). This accident killed both the plane and eventually the company which fell under a barrage of lawsuits. Failing to solve the problem will clearly usher in the worst possible legal outcome for Apple, hence seeking to immediately solve the problem is the best possible outcome.
Three Relevant Areas of Law
Law of Contracts
Alongside criminal law, the law of contracts is perhaps one of the oldest areas of law. It governs agreements made by two or more persons for the achievement of a certain objective and in exchange of an agreed offer upon consideration (O’Sullivan & Hilliard, 2016). That singular defining statement is loaded with the several components that are included in a law of contract. For a start, it relates to agreements. This means that two or more legal persons including companies and government arms come to a consensus. This consensus must be made freely, and in the absence of coercion or deceit. Secondly, the agreement must be based on an objective. This objective must be both achievable and legal in nature. An agreement to supply a living mammoth is not achievable and an agreement to supply narcotics is illegal. Finally, there must be a lawful consideration under the principle of quid pro quo, meaning something for something (O’Sullivan & Hilliard, 2016). What is offered in exchange does not necessarily have to equal to the objective as long as a consensus is arrived at. Contracts have terms and warranties upon which they are based and breaching them may lead to adverse legal consequences for the party in breach. In this scenario, Apple Inc. has entered into a contract with Foxconn for the supply of labor toward the achievement of parts of Apple’s objective of manufacturing. In exchange, Apple pays Foxconn for their services. The determinant factor on how the ethical situation can be remedied is mainly premised in the terms and conditions of the agreement. If there is an ethical clause, for example, Apple can use the same to compel Foxconn to change or even terminate the relationship without fear of legal ramifications. If there is no ethics clause and the contract is for an elongated period of time, it will be hard for Apple to terminate it.
Employment Law
Employment law is among the more recent areas of law and came into being within the 20 th century mainly premised in International Labour Standards Charters. Albeit every country has a localized version of employment laws, the ILO charters provide what can be considered as irreducible minimum rights of workers in the employer-employee relationship. This includes the right to be treated humanely, the right to fair wages, a right to industrial relations, and the right to be accorded human dignity at the place of work (Countouris, 2016) . ILO is an international organization and any local or international company can be charged for breaches of its provisions. Unfortunately, the ILO relies on local courts to implement labor laws. The USA has embraced ILO charters and is very strict on proper labor relations (Countouris, 2016) . Unfortunately, some organizations circumvent this through exportation of labor. Within the instant scenario, Apple may claim not to be bound by an employer-employee relationship with the Chinese employee within the so-called forbidden City of Shenzhen, China (Sin, 2016). If, however, a successful argument is made that Foxconn operates only as a legal agent of Apple Inc. then Apple can be held liable for the labor law breaches undertaken on its behalf by Foxconn.
Law of Torts
A tort is a civil wrong that is actionable by law, whether or not it is also actionable as a criminal case. Indeed, many torts also double up as criminal wrongs. For example, an assault is a criminal offense and also a tort against a person. The Law of Torts recognizes three general kinds of torts (Zhang, 2014) . The first is torts of negligence, which entails a failure to fulfill an expected duty. The second is strict liability torts which mainly operates to individuals who operate under a license such as food vendors or air transport operators. Finally, there are intentional torts which relate to when someone intentional conducts a civil wrong on another person. For example, larceny is an intentional tort. It is only in intentional torts where intents are considered (Zhang, 2014) . Within the scenario herein, Apple may not intend to cause any harm upon any of the employees that have been housed under squalid conditions in Foxconn’s Forbidden City (Sin, 2016). If, however, some misfortune was to befall them, it would be possible for them to hold Foxconn responsible for either negligence or strict liability tort. It might also be easy for them to have Apple held vicariously responsible for the said tort as Foxconn’s principal.
Recommendation to Apple
Business and General Ethics
It is important for Apple to understand that business ethics are meant to protect the company and not to encumber it. Therefore, any and all adherence to business ethics is crucial for the success of a company (Seaquist, 2012). History has shown that it is possible for a company to rise to a very high zenith without adherence to business ethics but the said rise is only temporary. Eventually, the business ethics breaches will catch up with the company leading up to its fall. McDonnell Douglas for instance, rushed to complete its Jumbo jet to beat its competitor; Boeing. It is a fact that McDonnell Douglas won that battle. By winning the battle, however, the manufacturing giant lost the war. The moral behind the example is that business ethics are not suggestions but rather principles of sound entrepreneurship. Therefore, for each decision that Apple makes, it is fundamental for it to consider the six steps of ethical decision-making. At the moment, Apple is at a crossroad on the ethical issue defined above seeing that over a decade since it was raised, the human rights abuses are still going on. It is time for the Apple leadership to consider the six steps and make the right decision. This right decision must not include raking in a profit at the expense of employees.
Legal Issues
Laws, rules, and regulations carry the force of implementation and when the implementation thereof seems delayed, it must be considered as an opportunity to remedy the breach of the law . This is because when eventually the implementation of the law comes, grace period allowed will become an anathema to the culprit. Further, in the law of torts, information is not power, but rather dangerous (Zhang, 2014) . The fact that the company is aware of the tortious acts and omissions of Foxconn without intervention will be considered adversely against the company in future litigation. It is imperative that the company moves to remedy the wrongs being done for and on its behalf before it is too late. The company must either compel Foxconn to reform or terminate its relationship with it. Further, Apple, for now, may not be able to operate without companies such as Foxconn. Even when it eventually does, it will still need to liaise and enter into contracts with other companies. It is fundamental to set ethical, legal, and moral clauses into such agreement. This will enable Apple to walk out of agreements that may create adverse legal liabilities such as the one with Foxconn without fear of an action for breach of contract.
Business issues
The concept about any form of publicity being good publicity in business is no longer tenable in modern entrepreneurship. This is because today’s consumer is perhaps the most knowledgeable and decisive in history. Consumers not only focus on the product itself but also the process of production. For example, in organic products, consumer check whether the production system engenders environmental conservation. It is in the same spirit that the consumer will evaluate and judge Apple based on issues as sensitive and human rights abuses. The labor relations aspects of phone manufacturing may not affect the quality of the phone but it will affect the inclination of the customers. Apple must, therefore, always be careful in its activities and dealings to avoid damaging negative publicity.
References
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Merchant, B. (2017, June 18). Life and death in Apple's Forbidden City . Retrieved September 28, 2017, from https://www.theguardian.com/technology/2017/jun/18/foxconn-life-death-forbidden-city-longhua-suicide-apple-iphone-brian-merchant-one-device-extract
O'Sullivan, J., & Hilliard, J. (2016). The law of contract . Oxford: Oxford University Press
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