China may be doing the bulk of the world’s manufacturing but that doesn’t mean its not grappled by issues that threaten business. Major companies who rely upon suppliers in China are increasingly being pushed by labor rights group to ensure that their suppliers don’t employ child labor. Unfortunately there have been many reports about suppliers hiring children under the age of 16 which is prohibited under local labor laws. One of Samsung’s suppliers was found to have done the same and in a bid to hold it responsible Samsung has decided to cut its order to the supplier by 30 percent.
A report from China Labor Watch, a U.S. based activist group, revealed last month that Dongguan Shinyang Electronics had at least five child workers without contracts. Samsung initially suspended its business with the supplier. Later after an investigation it was found that Dongguan Shinyang hadn’t directly employed those children, they had been brought in by a subcontractor through a labor dispatch agency.
Samsung will now work with the supplier once again but in order to hold it responsible for failing to monitor what its subcontractors were doing, the company will pass on 30 percent fewer orders. The company says that this move is in accordance with its zero tolerance policy on child labor.
The Korean juggernaut is facing increasing pressure from activists group which push it to do more in order to weed out labor rights violations from its China-based supply chain. This might be a solid step in that direction.