Samsung Electronics has suspended business ties with a Chinese factory after an activist group alleged the factory employed children who were forced to work as long as 11 hours a day.
The China Labor Watch alleges a factory called Shinyang Electronics, located in Dongguan, China, would hire children during its busy season. The young workers would toil for as long as 11 hours a day without overtime pay, and the factory allegedly failed to purchase social insurance, which the group said was required by law.
Samsung said the allegation was "unfortunate," given its efforts to halt child labor at its suppliers. It added that it routinely inspects its suppliers' factories to make sure the companies are following Samsung's "zero tolerance policy on child labor."
Charges of child labor violations have dogged companies that rely on Chinese manufacturing, including Mattel (MAT) and Apple (AAPL). For its part, Samsung had started inspecting Chinese suppliers after China Labor Watch raised questions in 2012.
For Samsung, the latest report from China Labor Watch tarnishes its pledge to stamp out child labor abuses from its suppliers. The company had recently finished an audit and found no cases of child labor.
"Samsung's social responsibility reports are just advertisement. Samsung has put its energy into audits and the production of these reports, but these things are meant to appease investors and don't have any real value for workers," said China Labor Watch executive director Li Qiang in a statement.
A report from China Labor Watch alleges that the Shinyang factory, where workers make Samsung phone covers and parts, had 15 sets of labor violations, including employing children under 16 years old and paying them one-third less than adult workers. The child workers were allegedly also paid for 10 hours of daily work, while actually working for 11 hours per day.
"This situation also meets International Labor Organization's definition of child labor, including work that is mentally or physically dangerous or harmful to children," the report notes.
Samsung said that its most recent audit, which took place on June 25, found no cases of child labor at Shinyang, but that an investigation after the allegations arose found evidences of illegal hiring on June 29. It said that the Chinese authorities are investigating.
"If the investigations conclude that the supplier indeed hired children illegally, Samsung will permanently halt business with the supplier in accordance with its zero tolerance policy on child labor," Samsung said in its statement.
The China Labor Watch report was based on an undercover investigator who was employed by the factory as a production line worker, as well as more than 30 worker interviews. The study found at least five child workers, or children under the Chinese legal working age of 16, although it said more may have been present.