Samsung wants to be recognized as one of the world's top 10 places to work. That's a core goal of the Korean company's Vision 2020 plan for the future, but to get there it'll have to do a lot to correct working practices at the manufacturing plants where its goods are made. As part of its 2014 Sustainability Report, Samsung commissioned independent inspections at 100 of its suppliers in China and the results make for grim reading.
The majority of suppliers did not comply with China's legally permitted overtime hours, half had workers under 18 handling potentially hazardous chemicals, and a third failed to provide proper social insurance for their employees. Of the inspected sites, 59 lacked adequate safety equipment or appropriate monitoring, three suppliers exceeded permissive environmental limits for dust or noise levels, and 33 failed to properly manage sewage and waste disposal.
Half of Samsung's Chinese suppliers have issues with worker safety
These findings add to an unhappy history of industrial accidents at Samsung's own facilities and will surely be a major worry for the company. For its part, Samsung has consistently mandated and requested better operational practices from its suppliers and also aided them directly with the provision of basic training and equipment like fire extinguishers and evacuation maps. Furthermore, over the past year Samsung has rectified 1,934 work-hazard issues identified in its production plants by the Korean Ministry of Labor and another nine that were pinpointed by the Ministry of Environment. There are now 2,000 "highly trained" inspectors that oversee work operations, including specialists on dangerous chemicals and a dedicated leak-response unit.
It's also encouraging to see that none of the inspected suppliers were shown to be employing underage workers, although Samsung's typical response to improper practices leaves something to be desired. Even the company's zero-tolerance policy against illegal working conditions is subject to giving suppliers a chance to rectify their issues before enforcing the threat of ceasing business with them. Of course, Samsung is hardly alone in having to overcome the conflict of producing goods cheaply without sacrificing worker welfare, but with over $220 billion in sales during 2013, it has the size and influence to bring about real change.
Company CEO Oh-Hyun Kwon introduces the Sustainability Report by saying that Samsung will use it as a compass for guiding its future endeavors. The previous iterations of the report have identified similar issues and the expanded inspections and oversight from Samsung are at least a step in the right direction. This offers some hope that solving the problems identified by the report, and also highlighted by labor issues in other regions like Brazil, will be a priority for the otherwise thriving Korean chaebol.