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November 27, 2012

Samsung's Audit of Chinese Suppliers Finds Illegal Labor Practices

By Shankar Pandiath, TMCnet Contributor

Recently, Samsung (News - Alert) in its audit of Chinese suppliers found several illegal practices. Samsung found that Chinese employees were being fined for tardiness and absence and that the employees were working overtime beyond legal hours.

Samsung Electronics Co., a South Korean multinational electronics company, is the flagship subsidiary of the Samsung Group. Samsung Electronics has sales network and assembly plants in 61 countries. Samsung Electronics employs over 220,000 people and conducts audits of its Chinese suppliers on regular basis.

Image via Shutterstock

Samsung Electronics was allegedly ignoring illegal labor practices in China. A New York based labor rights group accused Samsung suppliers of hiring children to work under ‘inhuman’ conditions. It also alleged that there was illegal discrimination in hiring policies.

It conducted a four week audit of 105 suppliers in China. While its audit team did find some illegal labor practices, there were no reports of child labor. The world’s largest maker of mobile phones and smartphones and one of the biggest suppliers of touchscreens and memory chips, Samsung Electronics carried out face-to-face checks on all staff, looking for employees under the age of 18.

Acknowledging the problems, Samsung said, "We have identified the need for initiatives to reduce employee overtime as a top priority, and we are researching and developing measures that will eliminate hours beyond legal limits by the end of 2014."

Samsung is keen on developing a longer-term plan to "resolve" the working hours problem by the end of this year.

Though Samsung has not declared how many of its suppliers were found to be flouting the norms, it has, however, cracked its whip by issuing a stern warning to its suppliers and has instructed them to adopt new hiring processes. They also warned them to stick to legal hours of working and have threatened to cancel contracts if there is any instance of hiring under-age children on premises in  the future. The erring companies were given two years to eliminate illegal use of overtime and fines for employees.

Samsung Electronics is also in the process of auditing 144 more suppliers in China.

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Edited by Brooke Neuman
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