Samsung Halts Business With Chinese Supplier Over Child Labour Fears

Samsung Electronics Co Ltd said on Monday it had suspended business with a Chinese supplier it suspected of employing child labour, less than a week after a U.S. watchdog report accused the supplier of using under-aged workers.

The South Korean smartphone maker said it found an "illegal hiring process" at Dongguan Shinyang Electronics Co Ltd, which supplies mobile phone covers and parts.

Dongguan Shinyang Electronics could not immediately be reached for comment. South Korean firm Shinyang Engineering Co Ltd, which owns all of Dongguan Shinyang, also could not be immediately reached for comment.

Samsung added that it had previously found no child workers at the Chinese company in three audits since 2013. The latest audit ended on June 25.

"The Chinese authorities are also looking into the case," Samsung said in a statement on Monday, adding that it would cut all ties with the supplier if the allegations were true.

"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 labour," it said.

U.S.-based China Labor Watch released a report on Thursday alleging that the Chinese firm used child labour. The U.S. watchdog said it had found "at least five child workers" without contracts at the supplier.

Samsung demands suppliers adopt a hiring process that includes face-to-face interviews and the use of scanners to detect fake IDs, to ensure no child labourers are employed.

But China Labor Watch said that Samsung's monitoring system was ineffective.

The watchdog accused one of Samsung's suppliers of using child labour in 2012. Samsung subsequently said it found no under-aged workers at the facility.

© Thomson Reuters 2014