Samsung has created a six-point action plan to improve working conditions in its Chinese factories and has promised to cancel contracts with any suppliers found to violate company labour policies. Samsung made the announcement on the back of a report by China Labour Watch (CLW) that claimed that worker abuse is rife in factories either owned by Samsung or run by Samsung suppliers.
CLW investigated eight factories - including six directly-operated by Samsung and two Samsung suppliers - and found instances of 100 hours of forced overtime per month, unpaid work, employment of underage workers and other abuses.
"Samsung abides by all labour and human right laws in each region it operates and strictly enforces bans on child labour, forced labour and workplace discrimination," Samsung said.
Six-point plan to address potential violations
1. Complete on-site inspections by the end of September for all 105 supplier companies in China who solely produce products for Samsung. Inspections will be conducted by a team of 100 Samsung employees who will be dispatched from headquarters.
2. Review by the end of 2012, via documentation, of 144 more supplier companies in China that produce products for Samsung and other companies to determine if they are compliant and prioritise any additional investigations or on-site inspections that may be required.
3. Contract with the Electronic Industry Citizenship Coalition (EICC) for regular on-site inspections of all supplier companies in China in 2013 and beyond.
4. Establish new guidelines that include business principles, codes of conduct, contractual obligations and management training for supplier companies.
5. Appoint a dedicated team within each regional subsidiary and HQ to oversee labour policies and working conditions at supplier companies to safeguard monitoring and enforcement processes in the future.
6. Through these efforts, if supplier companies are found to be in violation of our policies and corrective actions are not taken, Samsung will terminate its contract with those supplier companies.
Samsung also released the results of a recent audit at the HEG Electronics Factory in Huizhou, China, which is a supplier to the company.
The field audits were conducted in August in response to a report by China Labour Watch.
Samsung said that due to the high staff turnover rate at the HEG facility - which was around 30 percent per month - the audit encountered some limitations. However, through on-site investigations, it audited all HEG employees including face-to-face ID checks, reviewed HR records and conducted one-to-one interviews with student workers.
"Samsung investigators did not identify any underage workers during the site audit at HEG Electronics in Huizhou, but we identified workers under the age of 18 on site. These workers are over the age of 16 and are student workers or interns, and their presence is legal," Samsung's report said.
However, Samsung's audit did identify several instances of inadequate management and potentially unsafe practices.
For example, fines for lateness or absence from work were found to be in operation, overtime went beyond the local regulations of nine hours per week and certain health and safety measures were inadequate, such as a failure to provide access to a medical clinic.
Samsung said it has demanded that HEG immediately improve its working conditions.
"We have formally notified the company that it must comply with all applicable labour laws and Samsung's labour and employment right policies. If HEG fails to meet Samsung's zero tolerance policy on child labour, the contract will be immediately severed," a statement from Samsung said.