SAMSUNG Electronics Co Ltd said it halted business with a supplier in China over suspected use of child workers, the first time it has taken such a step, after criticism that its monitoring of labor practices at suppliers was inadequate.
The decision, announced on Monday, comes less than a week after U.S.-based China Labor Watch said it found "at least five child workers" without contracts at the supplier and called Samsung's monitoring process to halt such practices "ineffective."
Samsung, the world's biggest smartphone maker, said it conducted three audits since 2013 of the supplier, a wholly owned subsidiary of South Korea's Shinyang Engineering Co Ltd, the latest of which ended on June 25.
But another investigation prompted by the watchdog's report led to evidence of what Samsung called suspected child labor, pointing to holes in the tech giant's ability to enforce its labour guidelines for Chinese suppliers.
"The Chinese authorities are also looking into the case," Samsung said in its statement on Monday.
It said it would permanently cut all ties with the supplier if the allegations were true, in line with its zero-tolerance policy on child workers.
Dongguan Shinyang Electronics and Shinyang Engineering could not be reached for comment despite multiple attempts to contact them by phone on Monday.
Labour practices at Samsung suppliers have come under scrutiny since 2012, when China Labor Watch said seven children younger than 16 were working for one of the electronics giant's China-based suppliers.
Chinese labour law forbids hiring workers under 16.
The South Korean firm later said it found no evidence of child labour following those accusations, although acknowledging other problems including overtime hours in excess of regulations.
In November 2012, Samsung established a code of conduct for suppliers in line with standards set by the Electronic Industry Citizenship Coalition. It also asked suppliers to sign a compliance agreement to prevent child labour.
Samsung also demands that suppliers adopt a strict hiring process that includes face-to-face interviews and the use of scanners to detect fake IDs to ensure no child labourers are employed. In its annual sustainability report, published on June 30, the firm said a third-party audit of 100 Chinese suppliers found no instances of child labor.