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Amazon shares seen lower amid Foxconn factory conditions report

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Amazon shares ended in the red in the US Friday and are currently poised to open lower Monday, following a report criticising the working conditions of staff at a Foxconn factory in China that produces a number of Amazon tech goods.

New York-based China Labour Watch investigators monitored conditions at the Hengyang City factory between August 2017 and April 2018.

Amazon shares ended the US Friday trading session down 0.31% at $1,683.99. The stock is also lower in out-of-hours activity.

Foxconn factory conditions report

Foxconn is a Taiwan-based electronics contract business, which is also known as Hon Hai Precision Industry. The firm also fulfils contracts for other well-known tech companies, including Apple.

The report from watchdog China Labour Watch noted a number of violations at the factory in China’s Hunan Province, where workers make electronic items for Amazon, including Kindles and Echo Dot.

“The investigation revealed that dispatch workers (temporary staff) made up more than 40% of the workforce, a clear violation of the legally mandated 10%. Furthermore, the working conditions between dispatch workers and regular workers were markedly different despite working the same positions,” the report states.

“Other major issues at the factory include inadequate fire safety in the dormitory area, lack of sufficient protective equipment, absence of a functioning labor union at the factory, and strict management who subject workers to verbal abuse,” CLW added.

Amazon noted ‘issues of concern’ at recent factory audit

In a statement responding to the report, Amazon said it had raised ‘issues of concern’ at its latest audit of the same factory in April of this year.

“Amazon takes reported violations of our Supplier Code of Conduct extremely seriously,” the tech giant said. “In the case of the Foxconn Hengyang factory, Amazon completed its most recent audit in March 2018 and identified two issues of concern.”

“We immediately requested a corrective action plan from Foxconn Hengyang detailing their plan to remediate the issues identified, and we are conducting regular assessments to monitor for implementation and compliance with our Supplier Code of Conduct. We are committed to ensuring that these issues are resolved,” the statement said.

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