Exemplary Businesses: Samsung takes stand against child labour

When I was around age 17, someone told me that Nestle was committing atrocities in the Third World. Some readers may remember the stories about powdered milk being given to mothers so they stopped breast feeding and then became reliant on Nestle powdered milk. After hearing this, I refused to eat Nestle products from thereon in, and have largely refused to buy Nestle products for the last 20 years! For all I know the story may have been complete fabrication: I only heard it from one person and had no way of finding out if it was true. But this leads me to the reason why I am writing this article. Most of us probably try to put Third World suffering out of our minds when we buy our products: we don’t really know what is going on during the manufacture of our consumer items, and it seems impossible to do anything meaningful with regard to something about which we understand so little. Can anything be done to combat the problem of abuse in supply chains? ACCA (Association of Chartered Certified Accountants) has recently joined forces with UNICEF (United Nations International Children's Emergency Fund) and presented a report on child abuses within company supply chains. ACCA is calling for companies to take the initiative to adequately investigate and begin to report their findings concerning child abuses that are occurring within factories owned by their suppliers. However, the big problem facing a company that chooses to undertake a thorough investigation in this manner, is that it is likely to uncover some uncomfortable truths, since the truth is, as Helen Brand, chief executive of ACCA has commented, ‘Considering the scale and scope of child labour around the world, the uncomfortable truth is that any company committed to identifying, managing and reporting on its impacts is likely to uncover instances of abuse. ‘ This is a huge problem, since, as can be seen by the Nestle situation, consumer response can be to boycott a company once abuses have come to light. Consequently, companies are likely to shy away from trying to find out about any malpractice that might be found in their supply chain. But, as Helen Brand rightly says, this is unacceptable. Our businesses must take responsibility for the impact they are having on the world and the people who live within it. Samsung has recently done exactly that. On uncovering ‘child labour issues’ within its supply chain, Samsung has made these violations public and in response to the situation, has penalised the Chinese parts supplier responsible for the issues by reducing its business with that supplier by 30%. Samsung’s public condemnation and decision to reduce business with the offending supplier, is likely to have a strong impact on the supplier’s profitability, not only due to loss of business with Samsung, but also as a result of the marred reputation resulting from the bad publicity. If more companies take the initiative in this way, then it will force suppliers to act more ethically in order to ensure they are able to continue to obtain business relations with their clients. Photo: Jeanne Menj