Samsung finds bad management at supplier in China, launches more audits

Despite a labor group's claims, Samsung found no underage workers at a company supplier in China

Samsung Electronics said on Monday that it had found no underage workers at a supplier's factory in China, but had discovered instances of unsafe work practices and inadequate management there. The company will launch on-site inspections of 105 of its suppliers in China.

The problems turned up when Samsung audited an HEG Electronics factory in Huizhou, after New York-based China Labor Watch said it found seven workers under the age of 16 employed at the facility during an undercover investigation conducted in June and July. Chinese law forbids the hiring of workers under 16, but manufacturers in the country will often recruit student interns from schools in the country, according to labor experts.

Samsung said it investigated all employees at the factory, performing face-to-face ID checks, reviewing human resource records, and conducting interviews with student workers. But while the company found no underage workers, it said its audit was limited by the factory's high staff turnover rate, which it put at around 30 percent per month.

Previously, Chinese authorities also said they had found no underage workers at the factory. China Labor Watch could not immediately be reached for comment, but in the past the group has said the underage workers were using fake identification. China Labor Watch also noted that the factory was "driving off" the underage workers from the factory, following media reports on the alleged employment.

A HEG Electronics spokesman said in August the company has never employed any underage workers.

Despite finding no underage workers, Samsung said it found that certain health and safety measures were inadequate at the factory, including the failure to provide workers access to a medical clinic. Instances were also found of employees working beyond nine hours of overtime per week, which exceeds local regulations, according to Samsung.

"Samsung has demanded that HEG immediately improve its working conditions," the company said in a statement, also warning that, "If HEG fails to meet Samsung's zero-tolerance policy on child labor, the contract will be immediately severed."

To ensure other Samsung suppliers in China are in compliance with labor laws, the company said it will inspect 105 of its suppliers in the country that solely produce Samsung products. The inspections will be completed by the end of September, and will be conducted by a team of around 100 Samsung employees from the company's headquarters in China.

By year's end Samsung will also review using documentation to check if an additional 144 supplier companies in China are in compliance with labor laws and company policies. Samsung will launch on-site inspections of the suppliers if required.

The company also plans to contract with the Electronic Industry Citizenship Coalition for routine on-site inspections of its suppliers in China that will start next year. Samsung will terminate contract with suppliers if they fail to take corrective actions when violations are found.

"We are taking additional steps to re-evaluate our working hour practices, such as instances of overtime when new lines are built or new products begin the manufacturing process," the company added.

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Michael Kan

IDG News Service
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