Financial Times: Samsung rejects child labour allegations

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher

By Simon Mundy in Hong Kong

27 February 2013

Samsung Electronics has rejected allegations of child labour at suppliers in China, after three French rights groups filed a lawsuit accusing it of deceiving consumers by claiming to be an “ethical” company.

Last year China Labor Watch, a New York-based group, published a series of reports claiming violations including the use of underage workers at two of Samsung’s Chinese suppliers. It also alleged illegal practices at six factories wholly or mostly owned by the South Korean group, including working hours far in excess of the legal limit.

These allegations, based on undercover investigations, formed the basis for a complaint filed in a Paris court this week by three non-governmental organisations. Sherpa, Peuples Solidaires and Indecosa-CGT argue that Samsung is guilty of deceptive trading practices and false advertising. They say that its use of factories that violate labour law disprove its public claims to “carefully apply regulations”, and to be striving to become “one of the world’s most ethical companies”.

The company’s boasts of its strong ethics were “clearly an operation of promoting the image of the company which aims to respond to . . . new consumer demands”, court filing made by the complainants alleged. “Samsung benefits financially from the ethical image broadcast to the general public.”

Samsung, the world’s biggest technology company by sales and one of China’s biggest corporate sources of direct investment, denied the allegations of child labour on Wednesday, citing a “zero tolerance” policy. However, it said it could not comment in detail on the case until it had received the court filing.

Although its code of conduct states that it will “comply with all laws”, Samsung has confirmed that an internal audit of its Chinese suppliers showed violations of working hour limits “during limited windows of peak season production”. It says that an immediate resolution of this problem is impossible, but that it plans to “eliminate hours beyond legal limits by the end of 2014”.

Samsung added that it was confident that it met the minimum legal standard at companies that it owned in China, despite a company spokesman’s statement to the FT in November that employees at some of these factories had also been working excessive hours.

Labour campaigners say that basic pay levels at many Chinese electronics plants are so low that workers must work overtime to earn a living wage, while local governments are reluctant to punish working time violations for fear of deterring investors.

“They’ve been turning a blind eye to it for the last 20 or 30 years,” said Geoff Crothall of China Labour Bulletin, a Hong Kong-based NGO. “If you investigate any Chinese electronics factory, you’re going to get pretty much the same picture.”

CLW has also made allegations of child labour at factories owned by Foxconn, which is the biggest supplier to Apple, Samsung’s main rival in the global smartphone market. In October, Foxconn admitted having employed interns aged 14, and promised a full investigation.

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