Samsung to Suspended Supplier: Adults Only on Your Assembly Lines

Source: Getty Images

Source: Getty Images

Samsung (SSNLF.PK) is halting service with one of its suppliers, Dongguan Shinyang. The Chinese supplier was not following the employment procedures laid out by Samsung. Activists claim this facility uses child labor.

Like many electronics firms, Samsung uses facilities and suppliers in China to produce its goods. Dongguan Shinyang is a subsidiary of South Korea’s ShinYang Engineering Co., specializing in mobile phone parts. The legal working age in that country is 16, but Samsung’s official policy is that they only want workers age 18 or over in its facilities, which would ensure only legal adults would be working on the assembly lines.

Activist group China Labor Watch (C.L.W.) claims this policy does not reflect what actually occurs in those factories. A report by the group shows that underage teenage workers worked at the facility during busy seasons as temporary workers.

A recent article in The New York Times interviewed some of these workers, a trio of high school age girls from rural China who work at factories in the summer, brought to them by third-party recruiting firms. This summer it’s at Samsung. The Korean technology firm conducts audits on its suppliers in an attempt to discover any violations of its policies. Samsung found violations at the Dongguan Shinyang site after the release of C.L.W. report. The statement said that it found evidence of illegal hiring practices. Samsung will be continuing its investigation of the supplier for further violations.

“If the investigations conclude that the supplier indeed hired children illegally, Samsung will permanently halt business with the supplier in accordance with its zero tolerance policy on child labor,” said Samsung in the statement. It said it will cut ties with the supplier it finds evidence of child labor.

Samsung is not alone in the possible use of child labor by a supplier. Rival Apple has faced similar charges of child labor by its suppliers. Apple’s Chinese suppliers have also been accused of using child labor to build iPhones and iPads. A report from February 2014 shows that third-party recruiters sometimes bring in under age workers. Apple conducts audits to weed out these underage workers. The company’s policy in regards to child labor is quite similar to Samsung’s policy — zero tolerance.

“Our approach to underage labor is clear: We don’t tolerate it, and we’re working to eradicate it from our industry,” said Apple (NASDAQ:AAPL) in its Apple Supplier Responsibility 2013 Progress Report.

This goal to remove child labor from its suppliers is a move prompted in part by activism, and also likely in part by concern for the company’s reputation. Samsung’s most recent inspection was sparked by a report by an activist watchdog group, a report that was getting a lot of media attention. Upon discovering that the supplier was not following Samsung’s hiring policies, the company temporarily stopped working with them. In its statement Samsung said it would “strengthen its hiring process” in an attempt to prevent child labor and other illegal hiring.

More From Wall St. Cheat Sheet: