The carmaker is facing questions after serious allegations of child labour being used in one of its US subsidiary steel plants. Australia’s Hyundai Motor Company has distanced itself from serious allegations of child labour in its US company’s subsidiary steel plant.
The allegations come after an investigation from Reuters revealed that several children, one as young as 12, have missed school to work at the Korean carmaker’s subsidiary, called SMART Alabama LLC.
According to the Reuters report, local police, three underage children, eight former and current employees of SMART have all said the flagship assembly employed underage staff to work long shifts.
Hyundai has faced backlash after a Reuters report revealed allegations of child labour at a subsidiary’s steel plant in Alabama. Source: AFP / DIRK WAEM/AFP via Getty Image
In a statement to SBS News, Hyundai Motor Company Australia (HMCA) said it does not receive any car parts from SMART, nor has it received any parts in the past.
“We are aware of reports in the media relating to the subject,” an HMCA spokesperson said.
“The reports relate to operations in another country and have no relevance to HMCA’s supply chain operations.”
HMCA said it is “committed to combating modern slavery in all its forms” and has implemented procedures to identify and assess the risks of modern slavery in its supply chain.
Hyundai’s US branch said that it “does not tolerate illegal employment practices at any Hyundai entity. We have policies and procedures in place that require compliance with all local, state and federal laws”.
In December, the United States traffic and highway authority issued recall notices for more than 100,000 Hyundai and KIA cars that mention vehicles and engines made in the US and Korea.
In Alabama, it’s illegal to allow children under the age of 18 to work in metal stamping and pressing operations due to dangerous hazards that could put them at risk. Children aged under 17 must also be enrolled in school.
Associate professor of modern slavery at the University of Notre Dame, Martijn Boersma, said these working conditions for children fall under the “worst types of child labour”.
“There is a very strong distinction to be made between children working in jobs like having a paper round and still going to school and people being employed at these factories … in harmful conditions.”
HMCA is also at risk of copping “reputational backlash”, Associate Professor Boersma said, even if it is not linked to the US company or its subsidiary that is at the centre of these allegations.
“Hyundai does take a reputational hit, in terms of the brand being associated with child labour and that is very concerning,” he said.
While a brand’s reputation is more easily compromised in simpler, cheaper commodities, if allegations such as those made against the Hyundai-linked steel plant are consistently prevalent, people may start to avoid the carmaker, Associate Professor Boersma said.
“A consumer might actually say when they’re considering buying a new car, ‘I’m not going to buy Hyundai because this car might be tainted by modern slavery”,’ he said.
SMART “denies any allegation that it knowingly employed anyone who is ineligible for employment,” in a statement provided to Reuters.
The company said it relies on temporary work agencies to fill jobs and expects “these agencies to follow the law in recruiting, hiring, and placing workers on its premises.”
The steel plant has a history of complaints made by former employees. It has high employee turnover rates, is regularly short-staffed and has accumulated at least US$48,515 ($69,275) in occupational health and safety penalties since 2013, according to Reuters.