China iPod labour lawsuit dropped

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A Chinese firm building Apple's iPod has dropped a lawsuit against two journalists who made claims of harsh conditions at one of its factories.

Hongfujin Precision Industry - which makes iPods under licence in Shenzhen - and China Business News said they had resolved their dispute.

In an article in the paper, Wang You claimed that the firm had mistreated workers on its iPod assembly line.

Following an inquiry, Apple found there had been no serious labour abuses.

Protecting rights

But it concluded that there had been violations of contractual obligations, with many staff working excessive hours.

China Business News reported that workers on the assembly line had to remain on their feet for 12 hours a day and some had fainted as a result.

Allegations about working conditions at the factory were first made by a British newspaper, The Mail on Sunday, which said staff were working 15-hour days and were paid less than the minimum wage.

Claiming defamation, Hongfujin sought damages of 30 million yuan ($3.8m; £1.9m) from Mr Wang and his editor Weng Bao.

The firm also tried to have the two journalists' personal assets frozen.

In a joint statement Hongfujin's Taiwanese owner, Foxconn Technology, and China Business News pledged to work together to protect workers' rights and to respect their own business activities.

"Both sides believe the media should respect enterprises' just rights and enterprises should respect media's just and reasonable ability to supervise society," the statement read.

The allegations were an embarrassment for Apple at a time when multinational firms are under intense scrutiny over working conditions in factories in China and other Asian countries supplying their goods.

Nike is among a number of companies to have published details of all their suppliers to counter claims of sweatshop conditions and low wages in factories in developing countries.

Too much overtime

In its investigation, Apple found no evidence of child or forced labour at Hongfujin's Shenzhen complex, which employs 200,000 staff working for a host of US technology companies.

Although workers were found to be paid at least the minimum wage, procedures covering allowances for overtime, meals and housing were found to be "unnecessarily complex".

More than a quarter of staff were also working more than 60 hours a week, outlawed under Apple's code of conduct.

Hongfujin, one of China's largest exporters, has now agreed to allow workers to set up a trade union at the site.