Foxconn Begins Bribery Investigation

The company said last week that an internal investigation had uncovered possible wrongdoing in the supply chain and that those findings had been shared with the authorities in China.

The announcement is the latest setback for Foxconn, which produces a growing share of the world’s smartphones, laptop computers and other electronics.

“We can confirm that we are working with law enforcement officials whom we brought in to work with our own internal audit team as part of an investigation into allegations against a number of Foxconn employees related to illegal payments from supply chain partners,” Foxconn said in a statement e-mailed to the news media.

“Since the matter is under investigation, we are not able to comment further,” Foxconn said. “However, we can say that the integrity of our employees is something we take very seriously and any employees found guilty of any illegal actions or violations of our company’s Code of Conduct will be prosecuted to the fullest extent of the law. We are also carrying out a full review of our policies and practices to identify steps we can take to strengthen such measures to further mitigate against such actions.”

Foxconn, which is based in Taiwan but has production facilities throughout China, did not offer details about the nature of the investigation or how the problem was uncovered. But last week, the Taiwan edition of Next Magazine reported that a Foxconn executive in the coastal Chinese city of Shenzhen had been detained by the police on bribery allegations.

In its report, Next magazine said an executive at Foxconn’s operation in Shenzhen had been detained after being accused of asking for bribes from suppliers, and that two executives overseeing the company’s production of Apple products had left their positions in recent months.

Foxconn is considered one of the world’s most reliable suppliers of electronics. But the company’s image has been tarnished in recent years by labor strikes, accusations of poor working and safety conditions, and a spate of worker suicides at some of its Chinese factories.

Apple has strongly defended its partner against allegations of poor working conditions and Foxconn executives have responded in the past year by upgrading its management, work standards and production facilities.

Article source: http://www.nytimes.com/2013/01/14/business/global/foxconn-begins-bribery-investigation.html?partner=rss&emc=rss