Samsung will fix working conditions, keep production in-house

Electronics giant Samsung says it will keep manufacture in-house, but improve the conditions of its Chinese workers.
Written by Charlie Osborne, Contributing Writer
samsung supply chain suppliers working conditions china

Samsung Electronics will keep the majority of its production in-house, but intends to improve working conditions for the firm's Chinese workers.

Following an investigation in to working conditions for workers based in China, the China Labor Watch (CLW) said that employees working for a Samsung supplier sometimes had to work up to 16 hours a day, and were often only given one day off a month.

An internal audit of Samsung's 105 suppliers in China, covering over 65,000 employees, followed CLW's comments and found instances of "inadequate practices" at some facilities. Analyzing 6 Samsung-managed plants and 2 partner suppliers, the audit found 16 instances of staff mistreatment and claimed that underage worker abuse was taking place.

Overtime was found to be in excess of local legislation, some suppliers held back contracts from workers, and employees were fined for being late or absent.

A Samsung senior executive has taken the reports seriously, and the electronics giant will be tightening up its labor practices -- but will keep manufacturing in the country, Reuters reports. Samsung currently manufactures roughly 40 percent of its goods in the Asian country, which include computer chips, home appliances, and smartphones like the Galaxy S model. However, most of the production takes place in its own facilities, with less than 10 percent of manufacture being outsourced.

Mok, vice president of human resources, told the news agency that outsourcing is used to adapt to changing market conditions, and that Samsung's core strength relies on the fact the company manufactures so much in-house. Mok stated:

"Multinationals are increasingly opting for outsourcing for various reasons. But at Samsung, out of over 200,000 staff worldwide, more than half are manufacturing jobs, which indicates we are very much a manufacturing-driven company and it is where our core strength is. Samsung manufactures more than 90 percent of our products internally and only relies on contractors for peripheral products such as components, feature phones and handset cases."

The human resources VP also said that Samsung will work with the CLW to "introduce a better work environment" for employees working for the company's suppliers.

144 more supply chain partners in China are currently being reviewed, and the audit will be completed by the end of 2012.

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