TAIPEI, Taiwan — The new iPhone 5 isn't even on the shelves yet, and already Apple has seen its stock surge.
The company, which became the world's most valuable publicly listed company ever in August, said it expects to offload up to 33 million units this quarter. Analysts say supply constraints won't be a problem this time for the bigger, slimmer iPhone 5.
And while that's good news for Apple's shareholders, its bad news for anyone who may have been forced or poorly paid to make one of their products.
That's right, Foxconn, the electronics company that manufacturers components for Apple, is also back in the news this week.
Chinese state-run media reported that the Taiwan-based company had forced university students to take internships at Foxconn factories to help make the new iPhone 5. Not long after that public relations blow, Foxconn revealed Wednesday that another Chinese worker committed suicide at one of its factories.
Foxconn says the worker "fell to his death" on Wednesday, and that it was "unclear" whether police were investigating the death as a suicide.
After a spate of suicides and repeated accusations of labor abuse, Foxconn agreed last March to improve the working conditions of its 1.2 million employees who make iPhones, iPads and other electronics. Foxconn said it would hire more workers to reduce overtime and improve safety and living conditions.
Both the China Daily and Shanghai Daily reported last week that classes had been suspended at some universities in eastern Jiangsu Province in order for students to be bused to factories to make up a shortfall in dwindling staff numbers.
In a statement provided to Bloomberg, the world's largest electronics maker denied that the teenagers were forced to man production lines for the new iPhone.
Schools "recruit the students under the supervision of the local government, and assign teachers to accompany and monitor the students throughout their internship. The internship programs range in length from one to six months and students are free to leave the internship program at any time," the statement read.
Foxconn says students account for 32,000 of its 1.2 million workforce in China, and that they do so of their own volition. The Taipei-based compay pointed to an audit by the Fair Labor Association (FLA), a labor watchdog that Apple hired to investigate claims of abuse at Foxconn factories, that found "no evidence that any interns were pressured to participate."
Labor activists say those audits were conducted back in March. Moreover, they say the FLA isn't the independent arbitrator it claims to be.
"It's not surprising that Foxconn denies these new accusations about the forced student workers. A mountain of evidence shows the connivance between Foxconn and the local governments in China. Foxconn clears the land, drives away residents, recruits workers and then sets up contracts with universities for them to send the students," said Wong Ying-dah, a Taipei-based labor activist, who has been protesting Foxconn for more than a decade.
"It's such a huge mechanism safeguarding the rampant exploitation in Foxconn's plants," he added.
Wong says the FLA was established in the late 1990s by Nike and other companies, who were coming under increasing fire for their own sweatshop conditions. Companies pay a membership fee to the association to join, he said, which ostensibly goes toward the auditors' wages but creates a conflict of interest as a result.
"If [the FLA] really wants to be viewed as trustworthy, it should look at its board and get rid of anyone from the corporations. How can you believe audits from an organization whose board of directors include the companies that should be audited?" said Wong.
FLA did not respond to requests for comment made to its offices in China and Washington.
Students themselves have spoken out about the forced labor, saying they were told they wouldn't be able to graduate if they refused the so-called internships.
The Shanghai Daily reported that MengniuIQ84 wrote on Sina Weibo, China's version of Twitter, that the "authorities had ordered the schools to send students to assist Foxconn and the factory neither informed parents nor signed agreements with students."
Other students told media they were expected to work 12-hour days, six days a week for $245 (1,550 yuan) a month, while their accommodation and food costs ran in the "hundreds of yuan" per month.
"They said they are forced to work by the teachers," Li Qiang, founder of China Labor Watch, wrote in an email to GlobalPost. "But it's not just Foxconn's responsibility. Apple should be responsible for its entire supply chain. If Apple doesn't change the system, Foxconn won't be forced to make the change."
However, labor rights groups say Apple is more than happy to let Foxconn take the heat, and if need be, let the FLA clean up the mess.
"If the FLA wasn't involved then Foxconn may have actually achieved more in improving labor conditions when it was under such huge public pressure earlier this year," said Li.
"At the end of the day, it's a mouthpiece of the brand companies, which hire it to investigate and produce reports, and relieve the negative impacts these companies face."