Apple, believing it had headed off a possible public relations nightmare regarding working conditions in one of the plants of the Chinese manufacturers it uses to produce the iconic iPod, found out it had a new headache this week. Its manufacturer Hongfujin Precision Industry has filed a lawsuit against two journalists in China accusing them of defamation.

Hongfujin is owned by Foxconn, which owned the plants Apple investigated earlier this summer. Although Apple found some instances of work code violations, it did not find any widespread occurrences of worker abuse. Reports in the state-owned China Business News, and in other sources worldwide, have indicated otherwise.

As a result of the case, the personal assets of Wang and Weng have been frozen, a move that journalist advocacy group Reporters without Borders criticized. The group also called for Apple to step in. The company confirmed it was working behind the scenes to resolve the case, but would not comment any further.

The case highlights two problems: one on the increasingly difficult job of the journalist in China, and the continuing problem Western companies face when using overseas production plants.

In many cases, the working conditions and pay are questionable at best and offenses of worker codes of conduct often occur unbeknownst to the company, sometimes surfacing through the media. To its defense, China Business News said it would fully support its two employees, even going as far as to publish another article saying Wang had evidence of worker abuses.

Representatives for Hongfujin declined to comment, although in the past they have denied any wrongdoing.

Hmmm...  Guess the overseas outsourcing thing isn't so attractive now, eh?

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