Posts Tagged ‘electronics industry’

Samsung Galaxy S III

Samsung Galaxy S III (Photo credit: John Biehler)

If ever there was a serious contender for the title “iPhone killer”, the Samsung Galaxy S III is the closest thing I’ve seen. It’s time to take a closer look at its maker.

Samsung already sells considerably more handsets than Apple, but they don’t get anything like the amount of attention that Apple does, at least in English-speaking media. It’s not surprising: Most of their sales are made outside the USA, their stock isn’t listed on the NYSE and their product launches are in the Korean language (and in Seoul).

Korea is a pretty big player. The population of North and South combined is nearing that of Japan. Samsung looms large in South Korea’s national identity. It generates nearly 20% of the country’s GDP, a proportion that hasn’t changed much in years (AMRC, p. 48). The company’s economic output of $250 billion is larger than most national economies. At the World Expo, currently underway in Korea’s port city of Yeosu, Samsung has its own pavilion.

Like other trans-national corporations, Samsung outsources production around the world, often to places where manufacturing has lower wage cost.

The rise of Samsung and its operations throughout Asia are the subject of the first half of the book Labour in Globalising Asian Corporations published by Asia Monitor Resource Center (the second half deals mostly with Toyota).

The chapters are written by different authors and are a little episodic so, other than the general theme, the book doesn’t have an over-arching narrative. Each chapter is a meticulously pieced-together portrait of the company’s workforce, particularly Chapter 1 which makes a sweeping tour through Korea’s economic history right back to the Japanese occupation in the 1930s, the time of Samsung’s formation. It that respect it is an invaluable resource for students and others interested in alternative economics.

The book carefully documents the company’s shortcomings, mostly with respect to wages. In its home country Samsung uses a strategy of providing reasonable pay but banking on its prestige as an employer to squeeze the workforce to work harder and sacking the bottom 5-7% of performers every year as a matter of course.

The company has a declared ‘no union’ policy which it promotes by various means:

  1. Historically when workers in Korea itself start agitating for better pay, the company has given raises, neutering any union message.
  2. Outsourcing to suppliers that are separate companies on paper but actually controlled by Samsung management.
  3. In Korea and South-east Asia the company has succeeded in registering paper unions so that activists can’t obtain official recognition, and/or having real unions dissolved over minor administrative impediments.
  4. In Malaysia it also got the cooperation of the government to prevent unionization as part of the package of sweeteners to bring investment. This sounds outrageous but is possible because Malaysia has not ratified the ILO Convention on freedom of association.

It’s strange that Korea’s corporations are so virulently anti-union when Japanese companies learned a long time ago to work with them.

Samsung, owned and operated from Korea, also presents a challenge unlike anything I’ve covered to date. Whilst it is a public company it is not like other global brands, in which the largest stockholders are pension funds and no single fund owns a substantial holding. Samsung is a chaebol, a colossal interlocking network of companies all controlled by Lee Kun-hee and his family. The national government has only taken timid steps to wind back the chaebol system, despite its weaknesses such as overproduction which became apparent during the 1997-1998 economic crisis.

With no unions, little regulation and not even a fig-leaf of shareholder accountability there aren’t a whole lot of options to counter the power of the Lee Family. Social movement activism seems to be on the rise though. Last month a large meeting of three dozen activist networks took place in Seoul, making ten years of the International Campaign for Responsible Technology and they had Samsung squarely in their sights, holding a large protest outside the company’s headquarters.

The focus of this protest is occupational deaths among Samsung employees resulting from leukemia. The company has taken no action to improve safety (oddly this issue is not covered in Labour in Globalising Asian Corporations, even though it was only published a couple of years ago).

Their campaign is making some headway: on June 21st the country’s National Human Rights Commission requested that the Ministry of Employment and Labor change the rules to make it easier to prove that workplace injury and disease is attributable to the employer.

Chaebols still have to negotiate just like anyone else when their workforce is organised (it’s getting to that point that is the problem in Samsung). Just over a week ago, truck drivers belonging to the Korean Transport Workers Union achieved a 9.9% pay rise after a week-long strike. Samsung doesn’t have magic powers to prevent unionisation, just good lawyers.

Labour in Globalising Asian Corporations is available in hard copy from Asian Monitor Resource Center. It’s also available on their website in PDF. The sections relating to Samsung are:

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Very timely as we’ve heard this week that Samsung has become the world’s number 1 manufacturer of smartphones, outselling Apple 3 to 2. They haven’t had a fraction of the attention Apple has had in the last two years.

Stop Samsung - No More Deaths!

The Occupational Diseases of Electronics/Semiconductor Industry in South Korea
based on the information collected by SHARPS
Update as of March 5th, 2012

(The numbers mean victims and deaths among them respectively)

Total: 154, 61 (i.e. 154 victims found with occupational diseases; 61 deaths)

Samsung Semiconductor: 85, 30
Samsung LCD: 16, 7
Samsung mobile phone and other electronics: 11, 7
Samsung Electromechatronics: 11, 7
Samsung SDI: 10, 2
Samsung Techwin: 4…
(Subtotal of Samsung: 137, 53)

Hynix (Magnachip): 9, 5
Amco Technology Korea (Anam): 2…
Subcontractors of electronics components: 6, 3

These are the reported and known cases; how many more sick victims and deaths might there be which have been unreported?

Workers must be informed about the hazards they face at work; their rights to information and protection must be respected; and their lives must be treasured. Until all these are achieved in the industry, particularly at Samsung, the…

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Hello from Indonesia, readers! Not a lot to say just now however I hope to be able to bring you some voices from Batam in due course.

If you want to read more about the situation of the electronics workers on Batam, there is an excellent write-up on Asia Monitor Resource Center’s website:

Related post:

Stop Samsung - No More Deaths!

Every year an international vote is held for the most shameful corporations, to expose what social and environmental damage the corporate world brings.

Please support the Samsung workers and their families by voting for Samsung as the worst company in this poll by Public Eye

http://www.publiceye.ch/en/vote/samsung/

Read more about the Public Eye Awards here

http://www.publiceye.ch/en/about/

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worker outside KYE factory

KYE worker in Houjie, Guangdong. His working conditions have not improved since media publicity about the factory's conditions over a year ago.

In a perfect world, company executives would not need to be pressured into paying living wages, they would just do it.

In a next-to perfect scenario, producer-nation labour activists and destination-nation consumers would act in concert to bring about positive change in wages and pay conditions.

There are plenty of success stories around: Last year the tantalum mining industry got a shake up with the passage of US Government regulation. Individual companies continue to sign on to the No Dirty Gold pledge. Recent campaigns directed at single companies have seen improvements at Ocean Sky, a footwear maker, Bridgestone, Nestlé and 1800FLOWERS.

However it’s a bit hit-and-miss and I have to wonder whether part of this is because the developed-world NGOs have built-in obstacles to following up.

Why it’s better to say ‘Mission Not Accomplished’

Running a successful corporate embarrassment campaign involves media attention and increased brand awareness and it is at that point that donors become interested. Could it be that the interest level is less when people hear about successful calls to action? There is no dramatic tension in need of resolution. There is no villain. It certainly doesn’t make good media. Unions have for a long time used the ‘Anger-Hope-Action’ model to obtain buy-in; that does not apply when a problem is actually fixed.

I hope this doesn’t sound too cynical. People are attracted to stories and drama, and “this problem has been fixed” just isn’t as interesting as “this is an injustice”.

Moreover, media won’t run a story that amounts to “no change from what we told you before”.

An example: Xbox 360 hardware

Microsoft’s Xbox 360 handheld controllers are manufactured in a locality known as Houjie in China’s Pearl River Delta. The company, KYE Systems, is Taiwanese.

XBox 360 wired controller.

An Xbox 360 controller, manufactured by KYE Systems in Guangdong. Image via Wikipedia

In April 2010, the Institute for Global Labour & Human Rights published a report on conditions in the factory finding that the young workers from inland China were overworked.

There was a fair amount of media coverage at the time and Microsoft undertook to investigate the conditions for itself.

So what has happened? Basically nothing! Four months later a lone journalist at eWeek followed up to see if anything had been done and got a euphemistic response from Microsoft’s PR department, lacking any details (read it here).

So just one news channel has followed up the story. There’s a good chance others have made enquiries but simply decided it was no longer newsworthy.

So, no criticism of the Institute intended but, really, What next? Awareness is all well and good but surely the goal is to actually bring about improvements. I don’t have a solution. My only observation is that a big difference between this situation and the Institute’s successful campaign with Ocean Sky is that, in the latter case, they worked with a local partner.

The locals are always going to be more tenacious because when they wake up tomorrow, they have to deal with the situation, whereas end-users in the developed world don’t have to and need reminding.

Worker dormitories on Batam Island, near Singapore

This photograph is taken at Batamindo Industrial Estate on Batam Island. Batam Island is part of Indonesia but only a short ferry ride from Singapore. Many companies have regional headquarters in Singapore but base their manufacturing operations across the strait in Batam. It enjoyed a brief moment of fame in 2010 when debris fell onto the island from a Qantas A380 experiencing engine failure shortly after take-off from Singapore.

Map showing relative location of Batam and Singapore

Since being set aside for development in 1972, the population of Batam has grown from about 6,000 to one million today.

There are many industrial estates conducting manufacturing. Batamindo, pictured above, employs and houses 80,000 workers. Well known companies with a presence in Batamindo include Casio, Epson, Panasonic, PhilipsSanyo, Sanwa, Siemens, Sony, and TEAC. The components they work on include LCD screens, rechargeable batteries, computer cables and remote control units.

The majority of the workers are young women from small towns and kampungs across Indonesia, who are considered unskilled and easily replaceable. They are given short-term contracts rather than permanent employment, leaving them with no job security (sometimes called ‘precarious employment’).

Wages in light manufacturing are about $100 a month. Because of the nature of Batam, none of the production-line workers live close to their families. They share dormitories in groups of sixteen and sleep on bunk beds. They often send a large part of their earnings back to their home province, to support their families.

We’ll revisit Batam later.

Location of Shenzhen

Location of Shenzhen (Source:RFA)

This is a brief documentary made by people concerned about working conditions at Foxconn, the Taiwanese company subcontracted by Apple and others to assemble electronic devices.

Foxconn has 1 million employees – comparable to McDonald’s which has 1.5 million worldwide. About half of them work in Longhua Science & Technology Park, a single mega-factory in Shenzhen on China’s border with Hong Kong.

In early 2010 a number of Foxconn employees attempted suicide.

The makers of this video are concerned representatives of Hong Kong and mainland universities. They travel to the factory to enquire about the workers’ conditions, interviewing one young woman who survived her attempted suicide.