* Samsung says found evidence of suspected child labour
* Monday's step first by Samsung on allegations of illegal
* U.S. activist group says China supplier uses child labour
(Recasts with comments from Samsung, background)
By Se Young Lee
SEOUL, July 14 Samsung Electronics Co Ltd
said it halted business with a supplier in China
over suspected use of child workers, the first time it has taken
such a step, after criticism that its monitoring of labour
practices at suppliers was inadequate.
The decision, announced on Monday, comes less than a week
after U.S.-based China Labor Watch said it found "at least five
child workers" without contracts at the supplier and called
Samsung's monitoring process to halt such practices
Samsung, the world's biggest smartphone maker, said it
conducted three audits since 2013 of the supplier, a wholly
owned subsidiary of South Korea's Shinyang Engineering Co Ltd
, 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 labour,
pointing to holes in the tech giant's ability to enforce its
labour guidelines for Chinese suppliers.
"The Chinese authorities are also looking into the case,"
Samsung said in its statement on Monday.
It said it would permanently cut all ties with the supplier
if the allegations were true, in line with its zero-tolerance
policy on child workers.
Dongguan Shinyang Electronics and Shinyang Engineering
could not be reached for comment despite multiple attempts to
contact them by phone on Monday.
LABOUR PROBLEMS PERSIST
Labour 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
Chinese labour law forbids hiring workers under 16.
The South Korean firm later said it found no evidence of
child labour following those accusations, although acknowledging
other problems including overtime hours in excess of
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 labour.
Samsung also 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 labourers are
employed. 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 labour.
The report cited other problems, however, with minors of
legal working age but 18 or younger found working with chemical
handling processes at 48 suppliers and a majority of suppliers
not complying with China's laws on overtime.
Samsung said it demanded immediate action to correct such
But China Labor Watch Executive Director Li Qiang said last
week that Samsung's social responsibility reports were an
"advertisement" and that its efforts so far had failed to bring
improvements for workers.
"What Samsung says is not important; what's important is
their actions," Li said.
The watchdog's report says 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 had trouble eating proper
food at the factory cafeteria due to their night shift hours.
It reported that some of the child workers at Dongguan
Shinyang said the supplier's personnel did not follow a mandated
facial recognition system meant to verify whether the
applicant's face matched the ID provided.
The use of child labour isn't rare in China. Other
multinational tech companies including Apple Inc have
been plagued by revelations of exploitation.
Underage workers have previously been discovered at Foxconn,
the trading name of Taiwan's Hon Hai Precision Industry
and the supplier for some of the world's biggest tech
Samsung declined to comment on details of its investigation
and whether confirmation of use of child labour would affect its
existing relationship with parent Shinyang Engineering, which is
also 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.
Chung Sun-sup, chief executive of corporate monitoring
company Chaebul.com, said Samsung appeared to be growing more
proactive in dealing with allegations of impropriety in response
to growing scrutiny of corporate practices in South Korea.
"In the past allegations of corporate wrongdoing may have
been overlooked if authorities didn't spot them, but now such
issues will emerge in some shape or form," he said.
(Editing by Stephen Coates and Tony Munroe)