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Samsung finds labor violations at Chinese suppliers

Samsung had been stepping up oversight of its Chinese suppliers, following complaints from labor groups

By Michael Kan
July 1, 2014 07:42 AM ET

IDG News Service - Dozens of Samsung Electronics' Chinese suppliers violated various labor regulations last year, including failing to pay overtime wages or to provide proper safety equipment for workers, according to recent company audits.

In a report Monday, the South Korean electronics maker revealed some of its progress in keeping company suppliers in line with labor codes. Back in November 2012, Samsung announced it would address ongoing labor violations at the Chinese manufacturers after a labor watchdog group accused one of the suppliers of using child workers.

Samsung's latest sustainability report said no suppliers had been found hiring children, but audits conducted last year showed that labor-related problems still remain.

A third-party audit of 100 Chinese suppliers found that 59 of them had failed to provide or ensure that workers were using proper safety gear, according to the report. In addition, 39 suppliers excluded the overtime pay when giving out wages to part-time workers.

"A majority of suppliers do not comply with China's legally permitted overtime hours," the report said. Chinese law limits the work week to 49 hours, but most factories in the country let employees work far longer, in return for overtime pay.

Samsung added that its own, more expansive, investigation of 200 Chinese suppliers found similar problems dealing with payment of wages, and controlling of working hours. Past reports from watchdog groups have alleged workers at Samsung suppliers can log as many 15 to 16 hours in a single day.

To correct the problems, Samsung has demanded that suppliers in violation should take action. Suppliers that fail to do so will face penalties, including receiving fewer orders from Samsung, or having business suspended.

A Samsung spokesman said the company did penalize a number of suppliers, but declined to elaborate. The company has over 200 suppliers in China.

Both Samsung and Apple have been stepping up oversight of their Chinese suppliers, following complaints about the facilities from labor watchdog groups. In Samsung's case, the company plans to more strictly limit overtime hours by the end of this year. But watchdog groups believe the bigger priority is raising the workers' pay.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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