Samsung said Monday it temporarily suspended business with one of its suppliers in China over the suspected use of child workers, following criticism that its monitoring of illegal labor practices was ineffective.
The South Korean electronics giant launched an investigation into the Dongguan Shinyang Electronics Co. after the rights monitoring group China Labor Watch (CLW) reported the factory was employing workers under the age of 16.
"Following the investigation, Samsung decided to temporarily suspend business with the factory in question as it found evidence of suspected child labor at the worksite," the company said in a statement.
Samsung said the Chinese authorities were also looking into the case, and added that if it was proved the factory hired children illegally the business suspension would become permanent.
"Furthermore, Samsung will strengthen its hiring process not only at its production facilities but also at its suppliers to prevent such case from reoccurring," it said.
The company stressed that it maintained a "zero-tolerance" policy on child labor and conducted regular inspections of its suppliers to ensure its implementation.
"It is unfortunate that the (CLW) allegation surfaced despite Samsung's efforts," it said.
In its report, the New York-based watchdog had cited other violations at the same factory, including unpaid overtime wages, excessive overtime, and a lack of social insurance and training.
Samsung said it had audited Dongguan Shinyang Electronics three times since 2013, including an inspection last month.
The executive director of China Labor Watch, Li Qiang, challenged Samsung's commitment, saying its monitoring system was ineffective.
"Samsung's social responsibility reports are just advertisements," Li said.
'Inadequate' labor practices
Samsung has put its energy into audits and the production of these reports, but these things are meant to appease investors and do not have any real value for workers," he added.
The world's largest maker of mobile phones and flat-screen TVs has more than 200 suppliers in China and there have been repeated allegation over working practices in recent years.
A previous CLW report published in 2012 claimed workers at some plants were required to put in excessive overtime and could not sit down while working.
It also reported that one supplier, HEG Electronics in Huizhou, had hired children aged under 16.
Samsung rejected the child labor claim, saying face-to-face ID checks had nor revealed any such case.
However, the company did acknowledge "inadequate" practices including excessive overtime and a system of fines imposed for lateness.
As well as promising to correct the irregularities, Samsung said all suppliers in China would be monitored by a third party audit programme.
In August last year, the Brazilian government filed a lawsuit against Samsung over poor conditions at its factory in the Amazon that employs 6,000 workers.
Brazil's labor ministry said workers at the factory worked up to 15 hours a day and sometimes for 27 days straight.
After years of record growth spurred by surging smartphone sales, Samsung has started to struggle in the face of stiff competition -- particularly from Cheap Chinese devices.
The company said earlier this month its second-quarter operating profit would plunge nearly 25 percent from a year ago.