Samsung arrest casts fresh doubt on group's reform commitment
A Samsung executive was arrested on Tuesday as South Korea’s largest conglomerate contends with allegations that have raised fresh doubts about company pledges to reform and loosen its strict work culture.
Choi Pyeong-seok, a senior official at the after-sales unit of Samsung Electronics — one of the world’s most profitable companies — was detained amid an investigation into alleged sabotage of labour union activities by company management, according to prosecutors.
The case raises fresh questions about the trajectory of Samsung, which — despite its generally positive image abroad as a global electronics brand — has been beset by corruption scandals at home.
Lee Jae-yong, Samsung’s de facto chief, was freed from jail in February, five months after he was convicted on corruption charges, by an appeals court that halved his sentence to two-and-a-half years and suspended it for four years.
Mr Lee has always denied the charges, which included the allegation that he paid bribes to a top aide of the country’s former president Park Geun-hye in exchange for business favours. He, as well as prosecutors, have appealed to South Korea’s supreme court who will make a final ruling on the case later this year.
When he was released from prison, the Samsung scion apologised “for not being able to show my good aspects” and company officials vowed to improve governance, outlining plans to simplify its corporate structure and end the company’s emperor-style of management.
Now the company faces allegations that it used various means, including paying cash bribes, to disrupt and sabotage the activities of unions in violation of Korean labour law, according to the Seoul Central District Prosecutors’ Office.
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Prosecutors on Tuesday raided Samsung Electronics Services offices outside Seoul as part of an investigation into whether the alleged sabotage was ordered by the company’s leadership.
“Samsung has been cracking down on union activities since the company’s creation. It has only come to the surface now with the prosecutors’ investigation,” said Park Sang-in, a professor at Seoul National University.
“I think the company has been systematically involved in anti-union activities . . . it is a problem that a global company like Samsung still follows this anachronistic tradition of managing labour relations.”
The issue comes at a particularly sensitive time, with South Korean President Moon Jae-in pushing for improved rights and conditions for the country’s workers. In March, UN experts voiced concern about the treatment of workers in Samsung’s massive factories in Vietnam.
Samsung said it took the UN allegations seriously, that it was investigating the matter and will co-operate closely with the relevant UN bodies.
The latest allegations follow an unresolved furore from 2013 when lawmaker Sim Sang-jeung released a document — purportedly authored by the company — that outlined how to prevent the formation of unions and how to dissolve them if they are established. Samsung declined to comment on this document, and said it was unable to comment on the latest investigation while it unfolded.
According to the leaked document, one Samsung group — Samsung Mobile Display — compiled files on potentially problematic workers, outlining their personal tastes, close company and drinking habits.
“The managers still seem to view labour as a cost, although it should be seen as human capital. Samsung is in a consumer-facing industry. For a global company, managing labour relations well is also a key responsibility,” said Park Yoo-kyung, an investment adviser on governance at APG Asset Management.
“We hope that [things] will change under Lee Jae-yong’s leadership because the labour environment is also important for long-term investors like us.”
Additional reporting by Kang Buseong
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