China’s Foxconn is a real-world ESG disaster, but does anyone care?
While the focus of the global ESG movement in the investment industry remains Net Zero and climate alarmism, a real-world ESG disaster is unfolding in Zhengzhou, China, right now.
It involves a product that millions of climate protestors and ESG activist investors the world over, are no doubt glued to – the Apple iPhone.
Zhengzhou is home to the world’s largest iPhone factory. It is operated by Taiwanese company, Foxconn Technology Group. It’s reported number of employees is staggering – around 200,000.
But most of them don’t want to be there.
Since mid-October tensions have been rising after the Chinese Government forcefully imposed harsh COVID-19 control measures on the site. Images of workers fleeing the site in droves were widely circulated.
But in recent days, the situation has intensified further. Violent protests have erupted.
On Wednesday, Asia Markets verified with local sources images of protesters violently clashing with police at the enormous iPhone factory.
In one video, the protestors can be seen storming through a barricade.
The below video shared by a prominent China researcher, shows the scene as dozens of armed police fired tear gas. Sources say workers fought back with fire extinguishers.
Another video shows police wearing white protective clothing along with uniformed officers attacking a man on street near the factory, as the protest spilled out across the local area.
Late on Wednesday, local reports suggested military tanks were being deployed to the site to control workers.
According to sources, today’s escalation of violence at the site came after factory management told staff they wouldn’t be getting bonus they were promised in return for undertaking a COVID-19 isolation period, prior to being deployed on the factory floor.
The Financial Times also reported details from a source who said draconian COVID-19 restrictions continue to impact staff physically and emotionally.
“There was growing discontent over the factory’s continued inability to curb a Covid outbreak, tough living conditions and fear among staff that they would test positive.”
Will the Foxconn protests prompt the ESG crowd to put down their iPhones?
China’s Foxconn saga and the struggles of employees has gained little coverage in the mainstream media, and Asia Markets notes it has not been mentioned in commentary by any major ESG-focussed investment firm, anywhere.
The situation has, however, has been summed up well by prominent investment markets commentator James Eagle on LinkedIn (he’s worth a follow if you don’t already).
“This is an ESG disaster.
“Smartphones already do badly when it comes to environmental and social issues. For instance, most smartphone batteries contains cobalt, including those from Apple. 70% of all cobalt comes from the Democratic Republic of Congo, where there are child labour issues and artisanal mining.
“The treatment of workers at the Foxxcon factory in this instance is no different. These workers simply went to ask executives why they were not going to be paid a bonus this Christmas for extra work they did. Instead of answering their questions they called riot police. This is not common prosperity.
“Now we are always told that ESG is about sustainable investing. I really believe this is true, especially when you look across the supply chains of a company. If they supply chains break due to ESG issues, then the company suffers. Even a company as successful as Apple cannot avoid this.”
In a statement issued to media late on Wednesday (China time), Foxconn said it had paid all employee entitlements.
“Regarding any violence, the company will continue to communicate with employees and the government to prevent similar incidents from happening again,” the statement said.