Wednesday, October 12, 2016
Samsung's dodgy business practices
It's bad enough that Samsung put out a product that is capable of killing its user which sparked (no pun intended) a global recall, then an apparent safe second version was given to customers, where it was found that it too can be a silent killer.
So what's the deal with Samsung?
Can they really be trusted?
Could Samsung's BP Chemicals be the responsible entity for the exploding phone?
Let's take a closer look at the business practices of this global giant.
Samsung BP Chemicals, based in Ulsan, is a 49:51 joint venture between Samsung and the UK-based BP, which was established in 1989 to produce and supply high-value-added chemical products. Its products are used in rechargeable batteries and liquid crystal display
Samsung was the subject of several complaints about child labour in its supply chain from 2012 to 2015.
One of Samsung's Chinese supplier factories, HEG, was criticized for using underage workers by China Labor Watch (CLW) in July 2014. HEG denied the charges and has sued China Labor Watch.
In July 2014, Samsung cut its contract with Shinyang Electronics after it received a complaint about the company violating child labour laws. Samsung says that its investigation turned up evidence of Shinyang using underage workers and that it severed relations immediately per its "zero tolerance" policy for child labour violations.
CLW issued a statement in August 2014 claiming that HEG employed over ten children under the age of 16 at a factory in Huizhou, Guangdong. The group said the youngest child identified was 14 years old. Samsung said that it conducted an onsite investigation of the production line that included one-on-one interviews but found no evidence of child labour being used. CLW responded that HEG had already dismissed the workers described in its statement before Samsung's investigators arrived.
CLW also claimed that HEG violated overtime rules for adult workers. CLW said a female college student was only paid her standard wage despite working four hours of overtime per day even though Chinese law requires overtime pay at 1.5 to 2.0 times standard wages.
In 2013 New Zealand news media reported a number of Samsung washing machines spontaneously caught fire.
On October 19, 2011, Samsung was fined EUR 145,727,000 for being part of a price cartel of ten companies for DRAMs which lasted from 1 July 1998 to 15 June 2002. The company received, like most of the other members of the cartel, a 10-% reduction for acknowledging the facts to investigators. Samsung had to pay 90% of their share of the settlement, but Micron avoided payment as a result of having initially revealed the case to investigators.
In Canada, during 1999, Some D-RAM micro chip manufacturers conspired to price fix, among the accused included Samsung. The price fix was investigated in 2002. A recession started to occur that year, and the price fix ended, however in 2014, the Canadian government reopened the case and investigated silently. Sufficient evidence was found and presented to Samsung and two other manufacturers during a class action lawsuit hearing. The companies agreed upon a $120 Million agreement, with $40 million as a fine, and $80 Million to be paid back to Canadians who purchased a computer, printer, MP3 player, gaming console or camera from April 1999 to June 2002
"You can even say the Samsung chairman is more powerful than the President of South Korea.
[South] Korean people have come to think of Samsung as invincible and above the law", said Woo Suk-hoon, host of a popular economics podcast in a Washington Post article headlined "In South Korea, the Republic of Samsung", published on 9 December 2012. Critics claimed that Samsung knocked out smaller businesses, limiting choices for South Korean consumers, and sometimes colluded with fellow giants to fix prices while bullying those who investigate. Lee Jung-hee, a South Korean presidential candidate, said in a debate, "Samsung has the government in its hands. Samsung manages the legal world, the press, the academics and bureaucracy".
In 2007, former Samsung chief lawyer Kim Yong Chul claimed that he was involved in bribing and fabricating evidence on behalf of the group's chairman Lee Kun-hee and the company. Kim said that Samsung lawyers trained executives to serve as scapegoats in a "fabricated scenario" to protect Lee, even though those executives were not involved. Kim also told the media that he was "sidelined" by Samsung after he refused to pay a $3.3 million bribe to the U.S. Federal District Court judge presiding over a case where two of their executives were found guilty on charges related to memory chip price fixing. Kim revealed that the company had raised a large amount of secret funds through bank accounts illegally opened under the names of up to 1,000 Samsung executives—under his own name, four accounts were opened to manage 5 billion won.
The Fair Trade Commission of Taiwan is investigating Samsung and its local Taiwanese advertising agency for false advertising. The case was commenced after the Commission received complaints stating that the agency hired students to attack competitors of Samsung Electronics in online forums. Samsung Taiwan made an announcement on its Facebook page in which it stated that it had not interfered with any evaluation report and had stopped online marketing campaigns that constituted posting or responding to content in online forums