Samsung under pressure amid growing health fears faced by workers working in their plants

June 17, 2013 8:43 am

Samsung under pressure amid growing health fears

By Simon Mundy in Hwaseong

As thousands of workers stream out of Samsung Electronics’ semiconductor plant in the South Korean town of Hwaseong, Mr Lee, a 58-year-old restaurant owner, regards them with mixed emotions. The factory across the road guarantees his livelihood – about two-thirds of his customers work there, he estimates. But his views on the plant have shifted after it suffered two leaks of hydrofluoric acid gas in the past six months, which killed one worker and hospitalised several others.

“Everyone here has the same feeling,” he says. “On the one hand Samsung is great for business, but on the other, perhaps there are health risks. And lots of people are worried about the effect on property prices.” As Samsung has grown into one of the world’s largest corporations, it has found itself under growing scrutiny from activists and official bodies both at home and abroad. In Europe it has become a target for competition authorities, while its Chinese factories were the subject of allegations of illegal practice last year by China Labor Watch, a New York-based group.Samsung has been warned previously over its treatment of workers by several shareholders including the Dutch public pension fund manager APG Asset Management, which said in 2010 that “Samsung’s substandard performance in respecting workers’ rights poses considerable risks to its long-term profitability”, although it now notes significant improvements.

Within South Korea, national pride in Samsung’s achievements is clashing with a growing public distrust of the power wielded by the chaebol conglomerates which dominate the country’s business sector. Park Geun-hye, president since February, has put the drive for “economic democratisation” at the heart of her policy platform and during her election campaign promised to enforce more responsible practices on the chaebol companies.

“There’s a sense in the government that previous administrations were too lenient on the big business groups,” says Shim Jae-hoon, an independent commentator.

There have been signs of a tougher approach to top level corruption by the judiciary. The chairmen of SK Group and Hanwha, two of the country’s biggest groups, are in prison – a contrast with the suspended sentences routinely handed down to top executives in previous years. Meanwhile, the tax authorities are pursuing a major probe of CJ Group, another leading corporation, and raided its chairman’s home two weeks ago.

Samsung, by far the largest chaebol, is also affected by this shift in sentiment, says Kwon Chil-jeung, a member of the centre-left Democratic United party who represents Hwaseong in parliament. “Samsung still has influence over lawmakers, but it is declining. South Korean society is becoming more democratic.”

Following the death of a worker exposed to hydrofluoric acid in January, a government investigation found 1,934 regulatory violations at Samsung’s Hwaseong factory. The ministry of labour responded to the case with promises of stricter oversight on safety rules, and lawmakers including Mr Kwon are proposing a bill that would force companies to provide more information about dangerous chemicals used in their operations. Samsung was also ordered to pay a fine of Won250m ($222,000).

Samsung says it has been “urgently prioritising and addressing each and every observation” made in the report. It has already corrected 80 per cent of the infractions, and will address the remainder by the end of this year.

A second leak of hydrofluoric acid at Hwaseong last month occurred as it was attempting to make changes ordered by the government, Samsung says, adding that it is undertaking preventive measures to avoid any similar incidents.

The accidents at Hwaseong occurred amid a long-running dispute over a series of cancer cases among workers at Giheung – like Hwaseong, one of a cluster of satellite towns to the south of Seoul. Sharps, an activist group, alleges that there have been 136 cases of work-related diseases including leukaemia and aplastic anaemia among Samsung Electronics workers – mainly at Giheung – with 53 deaths.

Samsung says it invests Won1tn every year in environment, health and safety infrastructure, and has established an institute to research ways to improve the health of its employees. Samsung has since 2011 paid bereavement compensation and medical funding to former workers in semiconductor or LCD panel plants suffering from 14 types of cancer.

It points out that a 2008 government study of the South Korean semiconductor industry, including Samsung plants, found no evidence that workers were at increased risk of illness. A second study of Samsung plants, commissioned by the company and done by the US consultancy Environ, came to the same conclusion.

However in December South Korea’s workers’ compensation service, part of the labour ministry, found a “considerable causal relationship” between a woman’s death from breast cancer and her exposure to radiation during five years working at a Samsung factory. Seven months before, it had ruled that a case of aplastic anaemia was also caused by conditions at a Samsung plant, although it has rejected 21 other claims brought before it regarding conditions at the company’s facilities. The previous year, a Seoul court had ruled that the deaths of two Samsung workers from leukaemia were caused by their unsafe working conditions.

One of those workers was Hwang Yu-mi, who died in 2007 at the age of 23. Her father, Hwang Sang-ki, spends much of his income travelling to Seoul six times a month, to lobby for Samsung to claim responsibility for her death.

“I live in a house that’s not properly built, and it leaks when it rains,” says Mr Hwang, who drives a taxi in Sokcho, nearly 200km from the capital. “I don’t know how much money I spend on going to Seoul, and my wife is still being treated for depression. But we will keep on fighting.”