After a scathing report revealed evidence of child labor at a supplier factory used by Samsung, the corporation’s damage control kicked into high gear. The firm immediately announced it would halt its business with the Dongguan Shinyang Electronics for now, stating that it had “decided to temporarily suspend business with the factory,” and that this was in line with its “zero tolerance” policy for ethical sourcing.
So the moral corrective had been issued on paper. But it did not translate so well for the Chinese workers. The New York Times reported afterward that, according to Shinyang, “the factory was preparing to lay off its 600 workers.” The supplier also blamed the underaged hires on an outside employment agency, rather than Shinyang’s management.
China Labor Watch (CLW) was not impressed. The watchdog group that issued the report stated on July 16:
The suspension of business with Shinyang will lead to lay-offs of hundreds of workers who are not to blame for the mistakes made by Shinyang management and labor dispatch companies. If these workers are fired due to the sudden reduction of Samsung’s production orders, Samsung is responsible for the fair and legal compensation of these workers, who will need to support themselves and their families without a job.
Child labor and other worker abuses have occurred in Samsung’s supply chain, yet its solution is to punish even more workers. This reflects Samsung’s lack of respect for workers’ rights.
Though it is unclear whether Samsung will take any further remedial steps (media inquiries have not been returned), its PR calculus makes sense. Having just put out a laudatory “sustainability report” touting its ethical production standards, the company might have figured abandoning a scandalized supplier would be more cost-effective than investing in actual improvements to Shinyang’s working conditions. For workers, however, Samsung’s “sustainability” means massive disruption to an already precarious existence.
This is the perennial dilemma of ethical sourcing programs led by companies with no stake in the well-being of the impacted communities; cleaning up a tarnished record comes at the expense of workers’ livelihoods. (Not unlike consumer boycotts of brands with bad human rights records, which might deprive a company of sales but do nothing to change corporate practices.)
Since multinationals, as profit-making entities by design, can’t be expected to atone for ethical violations, their “corrective actions” aim more for shoring up reputation than raising standards. Samsung has dealt with child labor allegations in the past, also raised by CLW, by deploying a “zero tolerance” corrective action plan that included a supposedly state-of-the-art facial-recognition ID screening system, along with a grievance hotline and other workplace reforms. Yet CLW has continued to criticize its weak regulation of child labor, and the Times reported that several teens found it easy to circumvent the screening with false documents. The root cause of child labor isn’t lax screening but a volatile, unregulated labor market that absorbs anyone who needs the work, including school kids.