Apple’s Bid to Block Shareholder Proposal on Forced Labor Gets Blocked by SEC

According to a letter from the U.S. Securities and Exchange Commission (SEC), that was viewed by Reuters, the agency has rejected tech giant Apple’s bid to block shareholder proposal that asks the comapny to provide greater transparency in its efforts to keep forced labor out of its supply chain.

A group of shareholders earlier this year asked Apple’s board to prepare a report on how the company protects workers in its supply chain from forced labor. The request for information covered the extent to which the iPhone maker has identified suppliers and sub-suppliers that are a risk for forced labor, and how many suppliers Apple has taken action against.

In the SEC’s letter, regulators denied Apple’s move to block the proposal, saying that “it does not appear that the essential objectives of the proposal have been implemented” so far.

Apple will now have to face a vote on the proposal at its annual shareholder meeting next year.

According to Loup Ventures’ Munster, the supply chain issues could end up costing Apple $2 billion.

It was last week that the U.S. passed a bill banning imports from China’s Xinjiang region over concerns about forced labor.

“There’s rightfully growing concern at all levels of government about the concentration camp-like conditions for Uyghurs and other Turkic Muslims living under Chinese government rule,” said Vicky Wyatt, campaign director for SumOfUs, a group supporting the shareholder proposal.

The SEC additionally denied Apple’s request to skip a shareholder proposal that would give investors more information about the company’s use of non-disclosure agreements.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.