On the 20th and 21st of May, Samsung Electronics and the UN Migration Agency the International Organization for Migration (IOM) came together to host a virtual workshop under the theme of “Modern Slavery and Ethical Recruitment.” The two-day workshop, which was part of an effort to reduce the risk of forced labor in businesses and supply chains, welcomed approximately 50 participants from Samsung Electronics Poland, local suppliers, and business partners in Poland.

It was the third workshop that Samsung Electronics and the IOM have hosted –following the first event in Kuala Lumpur, Malaysia in June 2019 and the second event in Jászfényszaru, Hungary in November 2019 – as part of an ongoing effort to address modern slavery in the electronics industry.

According to statistics released by the ILO(International Labour Organization), around 40 million people worldwide are subjected to modern slavery, of which 25 million find themselves victims of forced labor. One fourth of this number are migrant workers.

During the workshop, participants discussed the definition of modern slavery and the risks of forced labor and unethical employment. They also learned about the Samsung Electronics migrant worker policy (revised in June 2020), that suppliers and partners are required to abide by. In addition, IOM proposed various strategies and activities with the intent of enhancing compliance with Polish law and regulations related to ethical employment, and mitigating the risk of forced labor.

Forced labor remains a pressing global issue. Together with IOM, Samsung Electronics will continue its efforts to raise awareness and strengthen the capabilities of employees, suppliers, and business partners to address forced labor and protect workers’ rights throughout the global supply chain.

Samsung optimizes costs and promotes synergy to ensure economic sustainability, mandates adherence to international regulations and transparency for social sustainability, and insists on only working with certified Eco-Partners the world over. The company works relentlessly to help its suppliers achieve growth according to the belief that Samsung’s success is rooted in the competitiveness of its suppliers at every level.

Selection of Suppliers

Samsung evaluates prospective suppliers based on criteria that include EHS (environment, health and safety), labor and human rights, and Eco-Partner standing. After a company passes the initial screening, in-house experts in each category are deployed to conduct on-site assessments of the prospective supplier. Companies are required to comply with regulations regarding the handling of chemicals of concern, bans on discrimination and inhumane treatment and social and environmental impact, among others.

An open-sourcing program is used to allow companies to apply to become Samsung suppliers. The International Procurement Center (IPC) and Global Supplier Relationship Management System (G-SRM) accept submissions from organizations that want to propose use of their components or materials for Samsung products. Samsung’s IPCs are additionally present in strategically significant locations all over the world to monitor regional technology trends and identify potential suppliers. These methods allow Samsung to ensure that its supply chain remains competitive, as well as sustainable.

Once new suppliers are brought on-board, Samsung looks to heighten transparency by disclosing its list of suppliers with their consent. From there, procurement operations are managed by an integrated procurement system. The company requires suppliers to adhere to the Samsung Supplier Code of Conduct, which ensures that they operate in accordance with local laws and regulations, while helping them maintain responsible management of their working environments.

Supplier Evaluation

Samsung performs in-depth supplier evaluations annually. During these evaluations, suppliers’ competitiveness and ability to maintain sustainability are measured using eight evaluation criteria: technology, quality, responsiveness, delivery, cost, EHS, finance, and law. Several methods are employed in the evaluation of suppliers, including on-site inspection and the review of previously uploaded data. Evaluations are carried out on an ongoing basis throughout the year, allowing suppliers to monitor their performance along the way. In 2018 Samsung evaluated 91% of its total suppliers, with those who had been registered with the company for less than a year excluded from evaluation. The company also requires all primary suppliers to complete annual self-assessments according to 85 criteria set out by the RBA (Responsible Business Alliance), of which Samsung is a member.

Comprehensive Evaluation Items

Samsung also conducts both on-site and third-party audits of its suppliers. On-site audits are led by RBA auditors, and conducted by dedicated teams who interview suppliers’ employees and examine their workplaces. After the audit is carried out, Samsung devises final improvement tasks, which are expected to be completed within 30 days. Applying the same criteria as the RBA, Samsung achieved a compliance rate of 91% for on-site audits in 2018, and the company is making further efforts to continue lifting that number. Also in 2018, Samsung drastically increased the number of third-party supplier audits, especially in the Southeast Asian region, where some concerns around working environments had been raised. Despite the significant increase in the number of third party audits in 2018, compliance rates were relatively consistent with those from 2017, implying that efforts to improve suppliers’ working environments had been successful.

Samsung charges first-tier suppliers with the evaluation of their relevant sub-suppliers, making them responsible for evaluating working conditions and ensuring compliance. Samsung has developed and distributed a safe management guidance to first-tier suppliers that assists them in evaluating the environmental and health and safety performance of lower-tier suppliers. First-tier suppliers are held accountable for ensuring a safe working environment at lower-tier suppliers and honestly reflecting the outcome of evaluations.

Strengthening Competitiveness^*

Samsung prioritizes improving the market competitiveness of its suppliers at all levels to create a healthy, sustainable corporate ecosystem.

Samsung seeks to strengthen the training and hiring capabilities of its first, second and third-tier suppliers by providing programs in leadership, global, R&D, procurement, sales, and business innovation. Furthermore, the company holds annual job fairs to help ensure that suppliers are able to secure top talent.

Samsung also runs funding programs to support suppliers that are experiencing financial difficulties. These include low-interest loans, as well as support funds that provide zero-interest loans to allow companies to make cash payments to sub-suppliers within a 30-day window.

Samsung also supports the competitive enhancement of its suppliers. To ensure that its suppliers remain innovative, the company offers worksite consulting, product stabilization and EHS consultation to its first, second and third-tier suppliers, as well as enterprises that it has not previously worked with. The company also runs programs that get suppliers acquainted with the newest technology trends to ensure that they remain up to date.

Finally, Samsung offers its suppliers sales channel support. The company helps identify new avenues for potential sales, and provides things like PR work, international marketing campaigns and information sessions for enterprises that want to sell their products through online retailers.

Recent Efforts

Since 2018 Samsung has been providing training sessions for Vietnamese industry experts under its Vietnamese Industrial Consultant Training Program. Participants include consultants, public officials and professors, and the goal of the program is to help nurture local human resources in the technology sector and lift the rate of production for locally produced components. The program offers two tiers of training – local consultant and master consultant – and is aiming to train 200 local and 60 master consultants by 2020.

In 2015 Samsung launched the Smart Factory Construction program, which aimed to share technological expertise regarding the establishment of smart factories with Korean SMEs. Smart factories can improve production efficiency, reduce costs and minimize environmental impact and workplace risks. 1,086 small and medium-sized enterprises took part in the smart factory program between 2015 and 2017 and saw a 54% increase in quality and a 58% increase in productivity.  Samsung is planning to reach out to 2,500 further SMEs in Korea between 2018 and 2022, with the focus of the expanded project being on sustainable growth in the era of industry 4.0.

Recently, Samsung investigated the working environments of migrant workers at its first-tier suppliers in Malaysia. Migrant workers remain a vulnerable demographic, and Samsung demonstrated its commitment to ensuring that they are treated fairly with its 2019 Ethical Recruitment and Fair Labor Practice Training Session, held in conjunction with the International Organization for Migration (IOM). The training drew around 80 managers from Samsung’s Malaysian supply chain, and covered issues such as ethical recruitment, due diligence, and how to identify and combat unethical employment practices.

Samsung has developed its Responsible Sourcing of Minerals policy in order to ensure the ethical sourcing of minerals throughout its supply chain. The company takes the issues of environmental deterioration and human rights violations in conflict areas in 10 African countries seriously, and has banned the use of minerals that are mined illegally in conflict regions. In order to help address unethical mining practices in the Democratic Republic of Congo specifically, Samsung Electronics has started the Cobalt for Development program in partnership with other multinational companies. This program aims to improve the labor conditions and the living environments at specific cobalt mines in the country.

^*Samsung’s supplier support initiatives vary from market to market

According to the International Labor Organization (ILO), around 40 million people worldwide are unfortunately the victims of modern slavery which today takes many different forms. Of these 40 million, 25 million people find themselves the victim of forced labor, often hidden in plain sight yet working across all kinds of industries and geographies. One-fourth of this number are migrant workers, meaning they are working in a country other than that in which they were born. Achieving safe labor migration requires the involvement of various actors across countries of origin, transit and destination.

This training for the Malaysian corporation and supply partners on forced labor and ethical recruitment was held at the Setia City Convention Center in Setia Alam, Malaysia, and gathered around 80 managers working in Samsung’s supply chain.

Participants learnt about the key characteristics and risks of modern slavery, as well as best practices to counter it. This included ethical recruitment, due diligence, and strategies to identify and tackle unethical employment practices. The discussions also highlighted to the attendees the various policies and regulations currently in force in Malaysia to prevent modern-day slavery.

This training is part Samsung Electronics’ ongoing efforts towards building the business capacity to address modern slavery. A key focus point of these efforts is to raise awareness within the company and its business partners of the protection of the labor rights of migrant workers active in its supply chains; Samsung’s commitment to prevent, identify and mitigate unethical recruitment practices is laid out in its Migrant Worker Guidelines.

Despite their key role in today’s globalized economy, migrant workers remain a vulnerable group. IOM and Samsung Electronics are collaborating to raise awareness and inspire action among all its employees, sub-contractors and stakeholders to help eradicate forced labor.