Ethical Performance
inside intelligence for responsible business


Tyre firm moves on health

July 2010

The world's seventh largest tyre manufacturer is to open a hospital for employees in what is being seen as a response to allegations that it has neglected occupational health concerns.

South Korea-based Hankook Tire, 70 per cent of whose sales are overseas, has almost completed construction of the hospital, and doctors have already started work there.

The hospital appears to have been provided partly because the huge Dutch pension asset management company APG has put pressure on Hankook over employee health at its plants.

Some of Hankook's 14,000 workers have complained of unusually high death rates at the factories, which they claim could be linked to solvents used in tyre production. Last year five Hankook officials were convicted of failing to prevent work-related deaths, but they have appealed and the company denies any offence.

APG, which manages about €240billion ($295bn, £199bn) in assets, said the company's management had at first been intransigent over the issue and had refused to discuss it.

However, by June 2009 APG's Hong Kong office had started engaging with the company on employee health and safety. It said: 'We voiced our worry that Hankook's customers might no longer want to do business with a supplier that treats its own employees badly - and that message hit home.'

APG said it viewed the opening of the hospital as a 'modest success' but that it would need to be 'the first step in a longer trajectory'. APG emphasised: 'We are trying to convince management that there are fundamental issues that need addressing when it comes to employee health and safety. At the same time, we are counting our blessings because management has taken a first step forward after years of simply denying the problems.'

Trade unions claim there is evidence that in recent years poor workplace practices have contributed to an unusually high number of deaths from cancer and heart disease among Hankook employees - and that about 1800 of the 3000-plus workers at its Daejeon and Geumsan plants were told they needed further medical examinations following recent health check-ups.

Hankook, which sells tyres in 120 countries, considers the death rates 'hardly abnormal'. It quotes a recent report by the state-run Korea Occupational Safety and Health Agency that found no link between the deaths and exposure to organic solvents.

Hankook has also been working recently with South Korea's Eulji University Hospital to promote staff well-being through an employee health promotion programme. It will now provide regular check-ups and physical examinations, 'which will provide accurate data on personal health and the operation of an optimal health management system'.

Meanwhile, APG has asked another Korean multinational, Samsung Electronics, to deal fully with accusations from at least 23 former employees who claim to have been made seriously ill, mostly with leukaemia, by their work.  

APG said that, although Samsung Electronics, the world's biggest electronic chip manufacturer, denies all responsibility, 'the accusations are serious enough to warrant action'. The investor has asked the company to hold an independent inquiry and to 'take any measures needed to guarantee the safety of its employees'.

Hankook Tire | Asia | Healthcare


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