Samsung Electronics Co. Ltd’s share price down, faces fresh child labor issues

Samsung Electronics Co., the biggest smartphone manufacturer in the world, made an official e-mailed statement today, saying that it is to investigate accusations of child labor at one of its suppliers. A New York-based labor protection group, China Labor Watch, had said gross violations of Samsungs ethics code were conducted, only days after the company had found no such cases in an internal investigation.

“We are urgently looking into the latest allegations and will take appropriate measures in accordance with our policies to prevent any cases of child labor in our suppliers,” the company stated, cited by the Wall Street Journal. “We are moving as fast as possible to address the labor-related issues that have been identified from our own and third-party audits.”

According to New York-based China Labor Watch, an undercover investigation had found that at least five workers under the age of 16 worked at the Shinyang Electronics plant in Dongguan. The labor protection group revealed that fake identity cards were used when hiring the underage workers, with certain managers ignoring a special verification system implemented by Samsung Electronics in its suppliers system.

The allegations come after just last week Samsung posted its annual sustainability report, where certain other illegal practices were disclosed, including lack of safety training and working hours over legal limits, which it had previously vowed to stop by the end of 2012. The practices in question involved the larger part of its more than 200 suppliers located in China.

The worlds largest smartphone manufacturer explained that there is “zero tolerance” for cases of employing workers under the legal age of 16 and it is doing everything in its strength to find a solution to the labor-related issues.

Samsung Electronics Co. Ltd was 0.15% down to close at 1 306 000 South Korean won per share yesterday, marking a one-year change of +4.65%. According to information published on the Financial Times, the 41 analysts offering 12-month price targets for Samsung Electronics Co. Ltd have a median target of 1,700,000, with a high estimate of 2,200,000 and a low estimate of 1,150,000. The median estimate represents a 29.97% increase from the last price of 1,308,000.