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Archive for May, 2016

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Five workers at Samsung’s subcontractors are now at risk of vision loss. Twelve hours a day, without protective goggles, they removed methanol residues from smartphone clad circuits churned out from  computerized cutting machines.  Photo credit: Minbyun

Neither Samsung Electronics Co., Ltd, nor the South Korean government, has taken meaningful action since February 2016 when gasified methanol put five workers at risk of vision loss at the company’s two subcontractors, YN Tech and VN Tech, in the city of Bucheon, The Voice Of The People, the country’s independent news website reported May 26.

 

Samsung Looks The Other Way

In the past four months, Samsung has not even issued a short press statement on the five victims.

The world’s largest technology company did not just outsource high-risk jobs—it looked the other way when these jobs were outsourced again to smaller contractors who depend almost entirely on temporary hires.  Although widely flouted, it is against the law in South Korea to hire people in manufacturing positions on a temporary basis.

There is little evidence that Samsung has reconsidered this illegal labor practice even after press reports on the five victims.

The government has not begun a criminal investigation into the exposure—despite the fact that the Samsung contractors, while violating the law, inflicted irreversible physical harm on the workers.

 

12 Hours A Day, $4.71 An Hour

The victims–one woman and four men in their 20s–landed the jobs through temporary-job recruiters.  Although they worked at two separate subcontractors, the victims shared similar work patterns and hours.

They worked twelve hours a day, rotating night and day shifts every two weeks.  In a country with per-capital GDP of $26,000, the five victims earned KRW 5,700, or U$4.71, an hour while the employers selected methanol over ethanol, which is more hazardous but one-third the price.

They used air-guns to remove methanol residues on smartphone clad circuits.  The splattering residue assailed their eyes. The only protective gear given to them was a pair of cotton gloves and a cotton mask.  Ventilation was poor.  No explanation was given on the dangers of methanol.  According to the Korea Occupational Safety and Health Administration, methanol density was up to 2,220 ppm, about ten times higher than the country’s legal limit, in six areas of YN Tech.

 

Samsung Evades Lawsuit

In April 2106, activist lawyers group Minbyun, also known as Lawyers For a Democratic Society, filed a damages lawsuit on behalf of three of the five victims against their temp agencies, the two Samsung subcontractors YN Tech and VN Tech, and the government.  The lawyers and victims have yet to finalize the amount of the damages.

Samsung is not named in the lawsuit because under current law, an employer is not technically liable for the jobs that are subcontracted out after being outsourced.

 

The UN Intervenes?

A team of investors from the United Nations Forum on Business and Human Rights, part of the UN High Commissioner For Human Rights, is now investigating the methanol exposure, reported the Voice of The People, and will have a press conference in early June.

 

SHARPS’s Sit-in Continues

Since Oct. 7, 2015, SHARPS and its supporters have been staging a sit-in at Samsung’s corporate headquarters in south Seoul, calling for the world’s largest technology company to:

1) institute a permanent, independently verifiable safety program;

2) compensate all victims of occupational disease transparently and sufficiently; and

3) make a sincere and full apology.

 

*** Update at 10:40 pm EST: This post was revised for better clarity (all changes are in italics). 

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At a rally on May 14, SHARPS activists and volunteers performed in a skit where Samsung was the puppet master of South Korea’s workers compensation service and media.  Photo credit: Lee Ki-hwa

 

Since its expression two years ago of regret over whom it said of “employees who became ill or dead as a result of what can be suspected of workplace accidents,” Samsung Electronics Co., Ltd. has still been maneuvering to shirk responsibility and break its own public promises, said a SHARPS activist.

 

Two Years of Treachery

“We’d better ask whether Samsung has ever made good on a single promise, instead of how many promises it has kept,” said Lim Ja-woon, legal counsel with SHARPS, on May 14, in a rally marking the two-year anniversary of Samsung’s first-ever official apology to the 200-plus victims and their families.

In May 2014 when Samsung CEO Kwon Oh-hyun stood before hundreds of reporters to make the apology, SHARPS was skeptical of the sincerity of Samsung’s regret.  Mr. Kwon did not concede that Samsung’s hazardous working conditions and tough labor control were the cause of the cluster.

 

Regrets, Samsung Had A Few

In his cautiously worded statement, Mr. Kwon lamented Samsung’s lack of empathy, not its negligence of workers safety.

In his own words: “During Samsung’s growth, countless employees dedicated themselves to working hard for the firm.  Along the way, there were people like them who suffered. This is truly regrettable and heartbreaking.  Also, we were sometimes negligent about the pain and hardships they and their families faced.”

 

Broken Promises, Samsung Has Plenty

Over the past two years, Samsung has proved itself to be a corporate rogue who lacks not only in empathy but also in any sense of responsibility.  Mr. Lim, of SHARPS, went on to explain how Samsung has broken its promises, one-by-one:

First, two years ago, Samsung said it would act on proposals via a mediation structure.  In July and September of last year, Samsung walked out of the mediation committee and began to use its own terms and conditions to pay compensation to some victims. Along the way, it incited divisions among cluster victims many of whom are in dire financial need amid mountainous medical bills.

Second, Samsung promised the victims “rightful compensation.”  However, Samsung imposed a ceiling and timeframe on compensation.  The world’s largest technology company demanded its financially strained former employees sign blank papers without explaining the purpose of their signatures.  Many compensation-seekers ended up getting payouts too small to even cover their medical expenses.

And third, Samsung said it would not intervene in workers compensation proceedings for cluster victims.  Prior to Mr. Kwon’s public statement, Samsung had hired an army of corporate lawyers to meddle in administrative lawsuits sought by the victims seeking workers comp.  The lawyers, in various expert capacities on behalf of KCOMWEL, the country’s workers compensation service, often used delaying tactics during the legal tug-of-war, depleting the victims’ already-meagre financial resources.

While Samsung no longer appears to directly intervene in the proceedings, it still sends lawyers to monitor the hearings and collect court records.  Worse, Samsung has to date refused to disclose the comprehensive data of potential and current occupational-disease victims it began to amass in 2010.

 

Samsung’s Broken Promises Kill                

In the past two years when it reneged on its own promises, Samsung was pushing workplace risks down to the lower ladders of the supply chain, denying some cluster victims compensation and leaving workers dead or maimed:

  • In May 2014,Yeom Ho-seok, 34 years old, a repairman with Samsung’s after-sale contractor, committed suicide in protest of harsh working conditions.
  • In December 2015, Lee Ji-hye, aged 29, died of lung cancer. Her death was the sixth in 2015 alone and the 76th of the cluster. Earlier in January, KCOMWEL threw out her petition for lack of evidence as Samsung had entirely updated the chip lab where she had worked.  Ms. Lee could not receive compensation from Samsung because its compensation scheme does not cover pulmonary conditions.
  • In March 2016, five workers at a component supplier were found to be at risk of vision loss after being exposed to gasified methanol.
  • In May 2016, new evidence shows that the blood disorder cluster has likely spread to some parts of the supply chain as a worker of a Samsung contractor petitioned for workers comp after being diagnosed with leukemia.

 

SHARPS’s Sit-in Continues

Since Oct. 7, 2015, SHARPS and its supporters have been staging a sit-in at Samsung’s corporate headquarters in south Seoul, calling for the world’s largest technology company to:

1) institute a permanent, independently verifiable safety program;

2) compensate all victims of occupational disease transparently and sufficiently; and

3) make a sincere and full apology.

 

 

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Kwon Jeung-nam, chairman and CEO of Taejung Industries, shows a text message he sent to a Samsung executive, in which he said he could not make an extra payout abruptly imposed on his company by Samsung.  Source: Newstapa (YouTube capture)

 

Samsung Electronics Co., Ltd. extracted at least KRW $20 billion (U$17 million) from a group of component suppliers in fiscal 2014 to prop up the sagging consumer electronics segment, independent news service Newstapa reported May10, citing a whistleblower.

 

Verbal Request

Two Samsung executives demanded a group of refrigerator and air-conditioner parts suppliers to raise KRW 20 billion for the company in Sept. 2014 when they attended a dinner get-together of the contractors, Kwon Jeung-nam, chairman and CEO of Taejung Industries, the compressor supplier of 28 years for Samsung, told the news cooperative.

There is no paper trail for the request by the two executives, whose identities Newstapa has yet to disclose.  “They [the Samsung executives] have never come to a dinner meeting before,” said Mr. Kwon. “The two executives verbally made the request.”

 

Exceptional Cooperation

However, Samsung’s verbal request is corroborated by a text message the contractors who lead the supplier groupings sent to all members after the dinner, on Sept. 14, 2014.

The carefully worded text message reads:  “We are in a position in which we have to reply by today to the collaborative request made by Samsung.  We, the [Samsung] partners, all are currently in a difficult and tough situation, but we are at the point needing a resolute decision for a new leap for the consumer electronics segment of [Samsung].  I am asking you for exceptional cooperation.”

On the same day the leading contractors, whom Newstapa has yet to identify, texted another message reading:  “Please be advised: the amount assigned to each partner should be paid by year-end.”

 

“Please Be Generous and Forgive Me”

Samsung’s KRW 20 billion request came down to KRW 100 million (U$85,000) for each of about 20 suppliers.  Mr. Kwon refused to pay.  Taejung was on the verge of receivership, after years of Samsung’s unilateral cuts in unit prices of compressors.

In a text message to one of the two executives who attended dinner, Mr. Kwon said:  “We are in the process of getting court approval for receivership… As many matters are examined by court judges, we could not come around a way to cooperate with you on the collaborative request made by Samsung.  There is little room for me to maneuver…  Please be generous and forgive me.”

The executive did not reply, and Samsung severed its 28-year ties with Mr. Kwon’s company in 2015.  Taejung is now in receivership.

 

A Tough Year For Samsung

For Samsung, fiscal 2014 ending Dec. 31 was a tough one.  Galaxy S5, the then-latest addition to its smartphone line, fell behind Apple’s IPhone and was steadily caught up with by Chinese knock-offs.

That year, the tech giant posted a fall in earnings for the first time in three years.  Yearly net profit fell 27 percent to KRW 23.4 trillion (U$21.3 billion) from KRW 30.5 trillion.  The fall could have been bigger if it had not been for a 36 percent rise in semiconductor operating earnings.

Air-conditioners and refrigerators are money-losing laggards of Samsung’s diverse product lines; they are buttressed largely by smartphones and memory chips.  The company masks the losses by categorizing them into the consumer electronics division, side-by-side with popular digital TVs and monitors. 

“The consumer electronics division was under extraordinary pressure because of cumulative losses,” said a former Samsung vendor who, on condition of anonymity, confirmed the attendance by the two executive to the dinner.

 

Fatal Years For Workers

Samsung’s request, in effect extortion, was in breach of contracts and regulations.  It is unclear how Samsung booked these ill-gotten gains in the ledger, casting doubt over its financial integrity.  Also, it has yet to be confirmed whether and how Samsung made similar requests to contractors for other Samsung divisions.

What is clear:  Samsung’s attempts to slash costs and outsource risk by squeezing suppliers are hurting workers there.  In 2013-14, three repairmen who worked separately for Samsung’s after-sale service contractors, died of overwork or committed suicide in protest of harsh working conditions.

Beginning in 2013, dangerous working conditions faced by workers at Samsung’s memory-chip contractors came to light, attracting the notice of activists.

Five workers are now at risk of vision loss, after exposure to high-density gasified methanol at Samsung’s subcontractor, where they cut smartphone clad circuits.  The five victims earned KRW 5,700, or U$4.71, an hour while the employers selected methanol over ethanol, which is more hazardous than but half the price, for its production processes.

New evidence shows that the occupational disease cluster could be spreading from Samsung to a supplier owned by a sibling of its chairman, Lee Kun-hee.

 

On Newstapa

Newstapa, founded in 2012 by a small group of investigative TV journalists who were forcedly dismissed for their demand for editorial independence, files and distributes reports via YouTube and local podcasting platforms.  It is a form of cooperative run by donations.

As sole Korean part of the Panama Papers Project by the International Consortium of Investigative Journalists, Newstapa recently unearthed shell companies owned by POSCO, South Korea’s steelmaker, and children of the country’s former military dictators.

 

SHARPS’s Sit-in Continues

Since Oct. 7, 2015, SHARPS and its supporters have been staging a sit-in at Samsung’s corporate headquarters in south Seoul, calling for the world’s largest technology company to: 1) institute a permanent, independently verifiable safety program; 2) compensate all victims of occupational disease transparently and sufficiently; and 3) make a sincere and full apology.

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Cousins Lee Jae-yong (left) and Cho Yeon-joo (right) are due to inherit Samsung Electronics Co., Ltd. and Hansol Chemical Co., Ltd. respectively; both companies are infected with a blood-disorder cluster.

 

An employee of Samsung Electronics Co., Lt.’s chemicals supplier has petitioned for workers compensation after being diagnosed with leukemia—yet another sign that Samsung’s cosmetic efforts to improve workers safety, and brazen attempts to deny rightful compensation to victims of its blood-disorder cluster, are backfiring as safety negligence has plagued its supply chain.

Acute Lymphoblastic Leukemia

On April 28, the 31-year-old male, identified only by his last name Yi at his request, filed for workers compensation, claiming that he developed acute lymphoblastic leukemia in 2016 as a result of long working hours and exposure to hazardous chemicals while working at the chemicals supplier.

Overtime

Between 2012 and 2015, Mr. Yi mixed chemicals unknown to him to make cleaners and moisture-proof insulators at the Wanju plant of Hansol Chemical  Co., Ltd.  for Samsung’s organic light-emitting diode operations in China.

When Mr. Yi worked, chemicals splattered onto his bare skin and eyes.  He often inhaled chemical fumes. Chemical stains on his work suits were strong.  “Although there were ventilation fans at the shop, chemical odors were serious,” Mr. Yi told The Pressian, an independent news site.

Over the two years of employment, he was not given even a single safety training session or an explanation of the chemicals he was told to mix.

All In The Family

Hansol Chemical is no ordinary supplier for Samsung.  It is a unit of Hansol Group, the conglomerate spun off from Samsung Group and given to Lee In-hee, the eldest daughter of Samsung founder Lee Byung-chul, who died in 1987. Lee In-hee is also a sister to Lee Kun-hee, Samsung’s current chairman, who remains comatose after suffering a heart attack in May 2014.

Father and Daughter; Father and Son

Currently, Hansol Chemical is effectively controlled by Cho Dong-hyeok, the 61-year-old son of Ms. Lee, and his 37-year-old daughter, Cho Yeon-joo.

The daughter was seated on the board of directors in 2014.  Mr. Cho, not seated on the board, retains the title of chairman—a typical way for conglomerate honchos to control their companies without care about fiduciary duty.   Lee Kun-hee and Lee Jae-yong, his son and heir apparent, hold chairman and vice chairman titles respectively, without seats on the board of directors of Samsung. 

Undisclosed

For fiscal 2015, Hansol Chemical posted a 73.7 percent increase in operating income, boosted by sales of chemical components to Samsung, according to a number of local news reports.  The company is not required by law to disclose the volume of such sales because, in legal terms, they are not related-party transactions as Samsung and Hansol split almost three decades ago.

Bounded by Family; United In Bad Behavior

However, its strong family and business ties would mean that Samsung is well-positioned to urge Hansol to improve workers safety.  Samsung would not do that probably because it does not want to.  Rather, bounded by family ties, Samsung and Hansol are abetting each other in neglecting workplace safety.

 400

It has yet to be determined whether his chemical exposure has directly caused the Hansol worker the acute blood disorder.  However, SHARPS has to date profiled about 400 electronics workers diagnosed with leukemia, brain tumors, and multiple sclerosis.  Also, Mr. Yi often worked more than 100 hours of overtime.

“Recently, the court ruled that excessive overtime can be cause for such rare conditions as ovarian cancer and brain tumors, said Lim Ja-woon, a lawyer and a full-timer with SHARPS.  “Since Mr. Yi worked 100 hours of overtime almost every month, overtime alone may have caused leukemia.”

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April 22 marked the 200th day of SHARPS’s sit-in amid new evidence that Samsung’s occupational disease cluster appears to be plaguing much of its supply chain.

 

Sit-in Continues

Since Oct. 8, 2015, SHARPS and its supporters have been staging a sit-in at Samsung’s corporate headquarters in south Seoul, calling for the world’s largest technology company to: 1) institute a permanent, independently verifiable safety program; 2) compensate all victims of occupational disease transparently and sufficiently; and 3) make a sincere and full apology.

 

*On May 1, this post was updated to include a better description of Hansol Chemical Co. Ltd., where the victim allegedly became afflicted with leukemia.

 

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