Also, I think you misunderstand the meaning of externalities. From Wikipedia:
In economics, an externality, or transaction spillover, is a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit.
As far as I know, everyone part of the iPhone manufacturing process agreed so.
Disclosure: I live a few blocks away from the Foxconn's plant in Shenzhen.