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Samsung Electronics Chairman Indicted For Alleged Union Sabotage

Prosecutors in South Korea have indicted the chairman of the board of Samsung Electronics alongside dozens of other senior executives as an investigation into alleged sabotage of unions gathers pace.

The indictments will be another blow to the reputation of Samsung — one of the world’s largest and richest technology groups — which has been attempting to rehabilitate its image after years of scandal involving the company’s top brass.

Lee Jae-yong, the vice-chairman and de facto chief of the company, is serving a suspended sentence for corruption as he awaits final appeal in a landmark case that has exposed deep-set cronyism between South Korea’s conglomerates, known as chaebol, and the country’s political elite.

Now Lee Sang-hoon, the board chairman, and 31 other officials from various affiliates, face trial for what prosecutors have called “an organized crime that mobilized the whole company to its full capacity”.

Investigators alleged the executives employed a vast array of tactics to hamper union activities, including threats to cut the wages of employees linked to unions and withdraw business from subcontractors who appeared union-friendly.

Samsung declined to comment on the claims, which prosecutors said amounted to a violation of South Korean labor law.

The indictments, which do not entail police detention, follow a five-month investigation that was triggered by the discovery of documents during a separate corruption probe.

Samsung’s treatment of unions has long been a sore spot for labor activists. Only nine of the conglomerate’s nearly 60 units have unions and fewer than 300 of its 200,000 domestic workers are unionized — well below the national average of 10 percent.

While not officially opposed to unions, Samsung has said they create unnecessary conflicts.

“Samsung has no sense of shame,” said Choi Seok, a spokesperson for the labor-friendly Justice party. “The company’s organised and active sabotage efforts are a crime, which should have a corresponding punishment.”

The investigation is the second by prosecutors into alleged union sabotage.

The first was triggered by Sim Sang-jeung, a lawmaker with the Justice party. She released a document in 2013 that cited an instruction purportedly from the company to employees “to co-operate with human resources to dismantle labor unions as soon as they are created. If they can’t dismantle them early, they should be dissolved through long-term pressure.”

Lee Jo-eun, a labor activist, said although the indictments of the 32 officials were unprecedented, authorities failed to previously act on multiple reports of the company’s ill-treatment of unions.

“Samsung have long been accused of organized sabotage and illegal labor activities, but a proper investigation was never conducted,” said Mr Lee, secretary of the People’s Solidarity for Participatory Democracy, a civic group. “The issue has always been dismissed or neglected.”

The case, however, is likely to find support from South Korean President Moon Jae-in, who has been vocal about supporting workers’ rights. He has also sought to tackle the excesses of South Korea’s dominant conglomerates, such as Samsung. – Financial Times

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