Samsung takes action over child labor probe

South Korean electronics giant ends business with Dongguan supplier

Samsung Electronics Co Ltd said it has halted doing business with a supplier in China over suspected use of child workers—the first time it has taken such a step—following criticism that its monitoring of suppliers' labor practices has been lax.

The decision, announced on Monday, comes less than a week after US-based China Labor Watch said it found "at least five child workers" without contracts at a supplier and called Samsung's monitoring to halt such practices "ineffective".

Samsung, the world's biggest smartphone maker, said it has conducted three audits since 2013 of the supplier—a wholly owned subsidiary of South Korea's Shinyang Engineering Co Ltd in Dongguan, Guangdong province—the latest of which ended on June 25.

But another investigation prompted by the watchdog's report led to evidence of what Samsung called suspected child labor, pointing to holes in the tech giant's ability to enforce its labor guidelines for Chinese suppliers.

"The Chinese authorities are also looking into the case," Samsung said in a statement on Monday.

It said it will permanently cut all ties with the supplier if the allegations prove to be true, in line with its zero-tolerance policy on child workers.

China Daily's call to the subsidiary of Shinyang Electronics Co Ltd in Dongguan for comment went unanswered on Monday.

But in a telephone interview with China Daily, the Dongguan human resources and labor authority said an investigation into the case had been completed and the results would be made public on Tuesday.

Labor practices at Samsung suppliers have come under scrutiny since 2012, when China Labor Watch said seven children younger than 16 were working for one of the electronics giant's China-based suppliers.

Chinese labor law forbids hiring workers under the age of 16.

The South Korean firm later said it found no evidence of child labor despite those accusations, although it did acknowledge other problems, including overtime violations.

In November 2012, Samsung established a code of conduct for suppliers in line with standards set by the Electronic Industry Citizenship Coalition. It also asked suppliers to sign a compliance agreement to prevent child labor.

In addition, Samsung demands that suppliers adopt a strict hiring process that includes face-to-face interviews and the use of scanners to detect fake IDs to ensure no child laborers are hired.

In its annual sustainability report, published on June 30, the firm said a third-party audit of 100 Chinese suppliers found no instances of child labor.

The report, however, cited other problems, such as with minors of legal working age found handling chemicals at 48 suppliers, as well as a majority of suppliers not complying with China's laws on overtime.

Samsung said it has demanded immediate action to correct such behavior.

But China Labor Watch Executive Director Li Qiang said last week that Samsung's social responsibility reports were an "advertisement" and that its efforts have so far failed to bring improvements for workers.

"What Samsung says is not important; what's important is their actions," Li said.

The watchdog's report said the child workers it found working at Dongguan Shinyang were being paid about two-thirds of what adult employees would be paid in weekly wages despite doing the same work. The child workers also were not served proper food at the factory cafeteria due to their night shift hours.

Samsung declined to comment on details of its investigation and whether confirmation of child labor would affect its existing relationship with parent Shinyang Engineering, which also is a Samsung supplier.

"Samsung will strengthen its hiring process not only at its production facilities but also at its suppliers to prevent such (cases) from reoccurring," the company said.