Ethical Performance
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Samsung reduces business with supplier using child labour

November 2014

Samsung Electronics Co Ltd said it would do 30% less business with a Chinese parts supplier after discovering employment of child workers at the firm.

In July, Samsung Electronics suspended business with Dongguan Shinyang Electronics Co Ltd, a wholly owned subsidiary of a Korean listed company, Shinyang Engineering Co Ltd, after US-based China Labour Watch said it found at least five child workers without contracts working at the Chinese company.

Samsung said Chinese authorities found that while Dongguan Shinyang did not directly employ the child workers, a subcontractor had hired them through a labour dispatch agency.

Samsung decided to hold Dongguan Shinyang responsible for failing to monitor its subcontractors, following Samsung’s zero tolerance of child labour.

The move to penalise the China-based maker of mobile phone covers and parts comes amid growing pressure on Samsung Electronics to ensure that its Chinese suppliers adhere to local labour laws.

In 2012, the same activist group said seven children younger than 16 were working for another of the South Korean firm’s China-based suppliers. Chinese law forbids hiring workers under 16.

The use of child labour is not rare in China. Other multinational companies including Apple Inc have been plagued by revelations of exploitation.

The suspension of business was prompted by a report released earlier in July by China Labour Watch, which said children were working on the assembly lines at Dongguan Shinyang. A month earlier, in June, an independent audit by Samsung Electronics had found no child labour at the supplier.

A third-party firm supplying workers had brought in child labourers to Dongguan Shinyang around the end of June with forged identification after Samsung completed its audit, said a Shinyang Engineering official, adding that there are no child workers at Dongguan Shinyang now.

He said the firm had not been notified of Samsung’s decision to reduce business with the company, and declined to disclose how big the financial impact of the cut might be.

Samsung has over 200 subsidiaries and suppliers in China. In recent years, there have been a number of reports of child labour being employed at one or other of these.

Although China has strict rules against child labour, the authorities do not do much to enforce them and the practice is widely accepted.

Dongguan, an important manufacturing city in Guangdong Province producing and exporting textiles, toys, and electronics is considered one of China’s centres for child labour abuses.

Asia | Child labour

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