Samsung distances itself from supplier after new child labor uproar


Samsung Electronics Co. (SSNLF) said Monday it has suspended business with a Chinese supplier that was accused last week of using child labor.

The world’s biggest maker of smartphones confirmed that it had found “evidence of illegal hiring” at Shinyang Electronics Co. Ltd in Dongguan in southern China, and added that the Chinese authorities are also looking into the case. It said it would break off relations permanently if investigations confirm the allegations.

The company was forced to respond to allegations last week by the NGO China Labor Watch, which claimed it had found “several children employed without labor contracts, working 11 hours a day and only paid for 10.”

CLW had also said it found “at least 15 sets of labor violations” including unpaid and excessive overtime, illegal resignation requirements and a lack of safety training and protective equipment despite the use of harmful chemicals.

Under Chinese law, it is illegal to hire workers under 16. Samsung, meanwhile, says it has a “zero tolerance” attitude towards the use of child labor.

Samsung’s own annual sustainability report, published at the end of June, said it had found no instances of child labor in a survey of 200 suppliers in China in 2013.

However, CLW executive director Li Qiang said such reports were “just advertisement.”

“After allegedly inspecting hundreds of suppliers, Samsung did not find one child worker. Yet in just one Samsung supplier factory, CLW has uncovered several children employed without labor contracts,” CLW said last week.

Dongguan Shinyang Electronics and Shinyang Engineering couldn’t be reached for comment Monday.

This is the third time in two years that CLW has made allegations of child labor use against Samsung’s suppliers. Earlier investigations had found workers as young as 14 working in the HEG Electronics plant in Huizhou, and at HTNS Shenzen Co. Ltd.

Demand for smartphones is strongly influenced by seasonal factors, which leads companies to rely heavily on temporary labor at times of peak demand.

Samsung, whose smartphones dominate the mid- to lower-price segments of the market, said last week it was struggling in the face of lower-cost competition in a slowing market for smartphones.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.