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UPDATE 1-Telenor backs CEO in Bangladeshi child labour row

(Adds comments from Grameenphone)

OSLO/DHAKA, May 20 (Reuters) - The board of Norwegian telecoms group Telenor TEL.OL backed its chief executive on Tuesday after reports of dangerous job conditions and the use of child labour by subcontractors in Bangladesh.

A Danish television documentary last week revealed dangerous working conditions, accidental deaths, pollution and use of children at Telenor’s subcontractors in Bangladesh, unleashing a flood of criticism in Norwegian media.

Telenor holds 62 percent of Bangladesh operator Grameenphone, which employed the subcontractors to make mobile antenna towers.

The documentary’s revelations that children were employed at the Bangladeshi suppliers caused stern rebukes in Norway of Telenor from organisations like Save the Children.

Chief Executive Jan Fredrik Baksaas, who has faced criticism for not knowing about the conditions, was called in to brief the board about the situation on Tuesday.

The CEO has the full confidence of the Board and we are satisfied with the initiatives that (Telenor) has taken,” Chairman Harald Norvik said in a statement.

Norvik said this was a “serious situation” which should never had happened, but that the focus should now be on measures to rectify it.

Shares in Telenor, the world’s seventh largest mobile operator, traded flat at 197.25 crowns by 1316 GMT, valuing the group at about 180 billion crowns ($35.91 billion), after rising as much as 1.6 percent on the day.

“This may affect Telenor’s reputation, but financially, it is less important,” said analyst Espen Torgersen at Carnegie.

The documentary said children as young as 13 years old worked at the factories, climbing with no safety net in the 50 metres tall antenna towers.

It also revealed how a 22-year old worker died when falling into a non-secured pool of acid and that farmers had their crops ruined by waste from the factories.

ZERO TOLERANCE

Grameenphone said it was working with the vendors to ensure compliance with all relevant local regulations and to improve conditions in factories but admitted it did not do enough.

“We have zero tolerance for any breach of local laws and regulations and we are committed to improve the working conditions in these vendor factories,” said Anders Jensen, chief executive of Grameenphone, top cellphone carrier in Bangladesh.

“We have been working methodically with the tower vendors to ensure compliance with all local laws and regulations relating to the use of child labour and health, safety and environment issues,” he told Reuters in Dhaka, the capital of Bangladesh.

“However, our follow-up measures may not have been adequate,” he added.

The vendors were providing services to the entire telecoms industry in Bangladesh, not just Grameenphone.

Telenor said on May 14 that it recognised that inspection routines at the Bangladesh units had been inadequate.

Telenor said it had carried out inspections at factory premises, requested confirmation that conditions were in accordance with standards and that it terminated business connections with one vendor.

It also said working conditions for the remaining suppliers would be subject to a review, improvements in control routines would be implemented and a review of all Grameenphone contracts with suppliers was underway. (Editing by Elaine Hardcastle)

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