U.S. Markets closed

Samsung halts business with supplier in China on child labor concern

A man walks out of Samsung Electronics' headquarters in Seoul January 6, 2014. REUTERS/Kim Hong-Ji

By Se Young Lee

SEOUL (Reuters) - Samsung Electronics Co Ltd said it halted business with a supplier in China over suspected use of child workers, the first time it has taken such a step, after criticism that its monitoring of labor practices at suppliers was inadequate.

The decision, announced on Monday, comes less than a week after U.S.-based China Labor Watch said it found "at least five child workers" without contracts at the supplier and called Samsung's monitoring process to halt such practices "ineffective."

Samsung, the world's biggest smartphone maker, said it conducted three audits since 2013 of the supplier, a wholly owned subsidiary of South Korea's Shinyang Engineering Co Ltd, the latest of which ended on June 25.

But another investigation prompted by the watchdog's report led to evidence of what Samsung called suspected child labor, pointing to holes in the tech giant's ability to enforce its labour guidelines for Chinese suppliers.

"The Chinese authorities are also looking into the case," Samsung said in its statement on Monday.

It said it would permanently cut all ties with the supplier if the allegations were true, in line with its zero-tolerance policy on child workers.

Dongguan Shinyang Electronics and Shinyang Engineering could not be reached for comment despite multiple attempts to contact them by phone on Monday.


LABOR PROBLEMS PERSIST

Labour practices at Samsung suppliers have come under scrutiny since 2012, when China Labor Watch said seven children younger than 16 were working for one of the electronics giant's China-based suppliers.

Chinese labour law forbids hiring workers under 16.

The South Korean firm later said it found no evidence of child labour following those accusations, although acknowledging other problems including overtime hours in excess of regulations.

In November 2012, Samsung established a code of conduct for suppliers in line with standards set by the Electronic Industry Citizenship Coalition. It also asked suppliers to sign a compliance agreement to prevent child labour.

Samsung also demands that suppliers adopt a strict hiring process that includes face-to-face interviews and the use of scanners to detect fake IDs to ensure no child labourers are employed. In its annual sustainability report, published on June 30, the firm said a third-party audit of 100 Chinese suppliers found no instances of child labor.

The report cited other problems, however, with minors of legal working age but 18 or younger found working with chemical handling processes at 48 suppliers and a majority of suppliers not complying with China's laws on overtime.

Samsung said it demanded immediate action to correct such behaviour.


But China Labor Watch Executive Director Li Qiang said last week that Samsung's social responsibility reports were an "advertisement" and that its efforts so far had failed to bring improvements for workers.

"What Samsung says is not important; what's important is their actions," Li said.


The watchdog's report says the child workers it found working at Dongguan Shinyang were being paid about two-thirds of what adult employees would be paid in weekly wages despite doing the same work. The child workers also had trouble eating proper food at the factory cafeteria due to their night shift hours.

It reported that some of the child workers at Dongguan Shinyang said the supplier's personnel did not follow a mandated facial recognition system meant to verify whether the applicant's face matched the ID provided.


The use of child labour isn't rare in China. Other multinational tech companies including Apple Inc have been plagued by revelations of exploitation.

Underage workers have previously been discovered at Foxconn, the trading name of Taiwan's Hon Hai Precision Industry and the supplier for some of the world's biggest tech brands.

Samsung declined to comment on details of its investigation and whether confirmation of use of child labor would affect its existing relationship with parent Shinyang Engineering, which is also a Samsung supplier.

"Samsung will strengthen its hiring process not only at its production facilities but also at its suppliers to prevent such (cases) from reoccurring," the company said.

Chung Sun-sup, chief executive of corporate monitoring company Chaebul.com, said Samsung appeared to be growing more proactive in dealing with allegations of impropriety in response to growing scrutiny of corporate practices in South Korea.

"In the past allegations of corporate wrongdoing may have been overlooked if authorities didn't spot them, but now such issues will emerge in some shape or form," he said.


(Editing by Stephen Coates and Tony Munroe)

  • U.S. Courts Jailing Thousands over Civil Debts 'Without Due Process,' ACLU Says
    News
    Newsweek

    U.S. Courts Jailing Thousands over Civil Debts 'Without Due Process,' ACLU Says

    Thousands of people are being arrested and jailed each year because of outstanding civil debts, despite the United States banning debtors' prisons nearly 200 years ago, according to a new report from the American Civil Liberties Union.

  • Can Alcohol Help You Live Longer? Here’s What the Research Really Says
    Health
    Time

    Can Alcohol Help You Live Longer? Here’s What the Research Really Says

    New research, which was presented at the American Association for the Advancement of Science’s annual conference, has found that moderate drinking is linked to a longer life. The results came from the 90+ Study, a research project out of the University of California Irvine’s Institute for Memory Impairments and Neurological Disorders that examines the habits of people who live to at least 90. Here’s what the research really says about alcohol and health.

  • This Is How Much Money You Should Have in Savings at Every Age
    Business
    Money

    This Is How Much Money You Should Have in Savings at Every Age

    Based on the priorities they shared, here are the steps you should target from your 20s to your 60s… and into retirement. What to do: Transfer any credit card balances to a 0% card and use the savings to pay down even more debt. Slay the work, learn negotiation skills, practice in advance, and ask for the raises and promotions you deserve.

  • Business
    TheStreet.com

    3 Burning Issues Facing General Electric and Its New CFO This Week

    CFO Jamie Miller presented at two conferences Wednesday in the greater Miami area. At the corporate level GE has gone from a cash generator to a cash burner in the past two years, and that, more than any other factor, has destroyed value for GE shareholders.

  • Judge orders special counsel to turn over Michael Flynn evidence
    Politics
    Fox Business Videos

    Judge orders special counsel to turn over Michael Flynn evidence

    Retired FBI special agent Jeff Lanza discusses the significance behind a U.S. District Court judge order to turn over any potential evidence regarding President Donald Trump’s former national security adviser Michael Flynn.

  • Ambulance abuse note woman pleads guilty
    News
    BBC News

    Ambulance abuse note woman pleads guilty

    A 26-year-old woman who verbally abused paramedics and left a foul-mouthed note on their ambulance in Stoke-on-Trent has admitted a public order offence. Kirsty Sharman, of Parsonage Street, also accepted writing the handwritten message, which said she did not care "if the whole street collasped [sic]" . Paramedics were dealing with a 999 call in her street in Tunstall on Sunday. At North Staffordshire Justice Centre, chairman of the magistrate said it was an "absolutely despicable incident". 'Abuse not acceptable' The ambulance had been responding to a next door neighbour's emergency call to help his wife, who was "experiencing breathing difficulties", prosecutor Liz Ryder told magistrates.

  • An Unlikely Challenger In The Electric Car Race
    Finance
    Oilprice.com

    An Unlikely Challenger In The Electric Car Race

    Initially, electric and now the development of autonomous cars has been a major disrupter for the auto industry, the effects of which we have only just begun to see. Traditional auto manufacturers were initially written off as having too much legacy investments in the internal combustion engine and insufficient technology to keep up with the development of electric and self-driving cars. While starting from a low base growth has been solid, and although the electric vehicle (EV) challenge has driven much improved economy from the internal combustion engine, EVs are still carving out a place for themselves as battery performance steadily improves and charging infrastructure expands.

  • Ford U.S. chief departs abruptly after behavior probe
    Finance
    Reuters

    Ford U.S. chief departs abruptly after behavior probe

    Ford did not give any details on what that behavior entailed. A company spokesman said the review was launched in the past few weeks after Ford received a report of inappropriate behavior. Nair's departure comes after several high-profile business leaders and politicians have quit or been fired in the past year following accusations of sexual harassment, with the social media movement known as #MeToo pressing for more accountability in corporate cultures.

  • 55 percent of Americans can't define a key tax term
    Business
    CNBC

    55 percent of Americans can't define a key tax term

    If you feel confused or overwhelmed during tax season, you're not alone. According to a new report from NerdWallet , there's a lot of uncertainty when it comes to tax-saving strategies, income tax brackets and the new tax bill in general.

  • Boeing facing criticism for hard-nose supplier approach
    Business
    St. Louis Business Journal

    Boeing facing criticism for hard-nose supplier approach

    Airplane maker The Boeing Co. is facing heat these days for its determined stance in dealing with suppliers. Despite record orders, Boeing is getting some criticism for an initiative calling for some suppliers to cut costs, according to Bloomberg.  Boeing’s Partnering for Success initiative aims to streamline the manufacturer’s supplier chain. And based on financial returns — with its shares doubling since the start of 2017 — Boeing can argue its plan is working. However, Bloomberg cites suppliers who claim Boeing is seeking 10 percent price cuts for their products.  Boeing is coming off a bustling 2017. Boeing secured orders worth more than $90 billion in November alone.  Among the highlights

  • 2 Bargain Stocks You Can Buy Right Now
    Business
    Motley Fool

    2 Bargain Stocks You Can Buy Right Now

    Take, for example, natural gas companies Kinder Morgan (NYSE: KMI) and Antero Resources (NYSE: AR), which currently sell at bargain-basement prices compared to peers. It's a mind-boggling discount since they should trade at a premium valuation given their best-in-class operations. Kinder Morgan's stock has plunged a jaw-dropping 60% over the past three years even though the natural gas pipeline company's distributable cash flow (DCF) has only dipped about 7% from the peak.

  • The Rally in Apple Inc. Stock Is About to End
    Business
    InvestorPlace

    The Rally in Apple Inc. Stock Is About to End

    Shares of Apple Inc. (NASDAQ:AAPL) have rebounded sharply off the post earnings drop, gaining nearly 15% off the Feb. 9 intra-day low of $150.24. Lackluster fundamentals and tired technicals, however, will likely staunch any further upside in AAPL stock. AAPL stock is also no longer a deep value stock, fast approaching a price-to-earnings multiple of 18, which has been a ceiling over the past five years.

  • This Olympic Halfpipe Skier Didn't Do a Single Trick. Here's How She Made It to the Games
    Sports
    Time

    This Olympic Halfpipe Skier Didn't Do a Single Trick. Here's How She Made It to the Games

    Hungarian freeskier Elizabeth Swaney may have made it to the 2018 Winter Olympics, but she took a bit of a different route than the rest of the athletes in PyeongChang. Swaney’s Olympic run began and ended during Monday’s ladies’ halfpipe qualification when she skied a run that featured absolutely zero tricks. There were only 24 quota spots available in women’s ski halfpipe at this year’s Olympics, but injuries combined with countries not using all their spots made it so that the No. 34-ranked Swaney was able to compete in the Games.

  • Blue Skies Ahead For Weatherford?
    Business
    Forbes

    Blue Skies Ahead For Weatherford?

    Weatherford International is the oilfield services company some love to hate. Its previous management has been criticized as incompetent, its suite of services narrower than its peers and its debt load daunting. “The most hated name? That’s easy: WFT,” Seaport Global Securities analysts said in a note recently, referring to the company by its ticker symbol. But there are signs that the company – the smallest of the industry’s big four led by Schlumberger – may be on the mend. On Wednesday Weatherford announced a multi-step debt financing plan that will take some of the pressure off. Its shares jumped by 8% on the news to nearly $3 per share (they later eased back to $2.82). Bill Herbert, senior

  • 7 Must-Own Momentum Stocks to Buy
    Business
    InvestorPlace

    7 Must-Own Momentum Stocks to Buy

    Here are seven of the largest momentum stocks to buy that any market bull has just got to own. Shares are up an incredible 50% from the lows seen in October and were trading for as little as $300 as recently as early 2015. The company will next report results on May 3, after the close.

  • Billionaire David Einhorn's Greenlight Bought 6M JC Penney Shares: 13F
    Business
    Investopedia

    Billionaire David Einhorn's Greenlight Bought 6M JC Penney Shares: 13F

    Billionaire David Einhorn, the head of Greenlight Capital, disclosed last week in his company's quarterly 13F report that he established 19 new positions during the fourth quarter of 2017. One of the most significant purchases that he made was in J.C. Penney (JCP), the retail giant which has become "moderately distressed," according to a report by Guru Focus. At a time when many analysts showed interest in retail, Einhorn helped to solidify the trend. Why might he have decided to focus his efforts on JCP stock in the past quarter? Nearly 6.4 Million Shares of JCP Greenlight Capital acquired close to 6.4 million shares of J.C. Penney stock in the final three months of 2017. The average purchase

  • FC Barcelona President Says Messi Won't Be Sold
    Sports
    Bloomberg Video

    FC Barcelona President Says Messi Won't Be Sold

    Feb.20 -- FC Barcelona President Josep Bartomeu discusses the value of star player Lionel Messi. He speaks exclusively to Bloomberg's Ed Ludlow in London.

  • Here's How Internet Darlings Tessa Virtue and Scott Moir Respond to Those Relationship Theories
    Celebrity
    Time

    Here's How Internet Darlings Tessa Virtue and Scott Moir Respond to Those Relationship Theories

    It’s the question on everyone’s lips: are Tessa Virtue and Scott Moir dating? Leave it to Today Show hosts Hoda Kotb and Savannah Guthrie to try to get to the bottom of the mystery. In an interview with the skaters following their win, Kotb and Guthrie came right out with the question, asking about their dating status and calling their chemistry “undeniable.” “Would you guys just give us a little 411 on that situation?” Kotb asked.

  • Better Stock: Walmart Inc. (WMT) vs. Costco Wholesale Corporation (COST)
    Business
    Motley Fool

    Better Stock: Walmart Inc. (WMT) vs. Costco Wholesale Corporation (COST)

    Over the last five years, the membership-based model of Costco has helped the company's stock double the returns of Walmart. Will Costco's outperformance continue? In the investing world, there's nothing more important to evaluate than the sustainable competitive advantages of companies that you want to own.

  • Is It Too Late To Buy Hecla Mining Company (NYSE:HL)?
    Business
    Simply Wall St.

    Is It Too Late To Buy Hecla Mining Company (NYSE:HL)?

    Hecla Mining Company (NYSE:HL), a metals and mining company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $4.49 at one point, and dropping to the lows of $3.46. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Hecla Mining’s current trading price of $3.75 reflective of the actual value of the small-cap?

  • General Electric affirms commitment to Baker Hughes, shares rise
    Finance
    Reuters

    General Electric affirms commitment to Baker Hughes, shares rise

    Shares of General Electric Co's Baker Hughes rose on Wednesday after the parent company said it would not shed its holdings in the oilfield services business before the expiration of a two-year lockup period, reversing an earlier stance that had cast uncertainty around the stock. General Electric last November said it was considering shedding its Baker Hughes holdings to refocus its business and boost cash flows. The announcement came just months after the conglomerate had purchased a 63 percent stake in the firm under a deal that combined its oil and gas services and equipment business with Baker Hughes to create the second largest oilfield services firm by revenue.

  • Finance
    Investopedia

    The Top 3 Boeing Shareholders

    Founded in 1916, just a few years after the Wright brothers' famous Kitty Hawk flight, The Boeing Company ( BA) has grown to become one of the largest aircraft manufacturers in the world and the most well-known name in the aerospace sector and defense industry in the United States. Boeing Capital Corporation supports all three divisions by providing financing for Boeing customers. Boeing's chief financial officer and executive vice president of Enterprise Performance & Strategy, Gregory Smith, is the largest insider shareholder of the company.

  • 3 Stocks Warren Buffett Would Buy if He Were a Millennial
    Business
    Motley Fool

    3 Stocks Warren Buffett Would Buy if He Were a Millennial

    It's easy to see why Warren Buffett is considered the greatest investor of all time. His company Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) has become one of the most valuable in the world largely due to his investments, both in stocks and the companies

  • Business
    Forbes

    3 Biotech Stocks To Avoid

    Hope stocks. Fads. Castles in the sky. Those are the words I think of when I see a stock that sells for 100 times revenue or more. In my view, you almost have to be crazy to invest in them. Over the years, a typical stock has usually sold for about 1.4 times revenue. In today’s rich market the prevailing ratio is 2.25. So, we’re talking about stocks that sell for 44 times prevailing valuations, which are themselves rich. The vast majority of these stocks are biotech stocks, and proponents argue that they are worth the inflated multiples. These companies are searching for treatments for cancer, heart disease, multiple sclerosis or other diseases that terribly afflict humankind. Why shouldn’t they

  • Finance
    U.S.News & World Report

    It's Time to Reconsider Intel Corporation (INTC) Stock

    Semiconductor stocks have been on fire in recent years, but Intel Corporation (Nasdaq: INTC) has mostly lagged behind smaller, high-growth competitors. In Intel's most recent earnings report, the company reported earnings and revenue beats and reassured shareholders that the Meltdown and Spectre vulnerabilities identified in Intel chips in January would not be a long-term concern. In fact, Intel rewarded loyal shareholders with a 10 percent dividend hike.