Malaysia faces global pressure to weed out pervasive forced labour

US and Canadian import bans due to forced labour have plagued Malaysia’s largest glove makers and plantation firms in recent months, but the problem of worker exploitation is pervasive across the country’s industries, experts say. How does Malaysia need to change?

Migrant workers in Malaysai
Despite Malaysia being relatively economically advanced, its migration, labour and employment policies continue to mirror that of developing countries, according to migrant worker rights activist Andy Hall. Image: Freemalaysiatoday

“The garments industry, plastics, electronics, furniture, ceramics, even food processing — these are all industries where there are systemic forced labour problems in Malaysia,” said Andy Hall, a migrant worker rights activist who has been working closely with the country’s largest companies to resolve an issue also known as modern slavery.

As Eco-Business went to press, one of the firms Hall has worked with, Malaysian palm oil grower Sime Darby Plantation (SDP), detailed in a statement how it would improve the way it recruits migrant workers in a bid to improve its battered human rights credentials. SDP was hit with an export ban by United States Customs and Border Protection (CBP) last year after forced labour was allegedly found on its plantations. The company has said it will reimburse 15,078 workers from eight Asian countries RM38.55 million (US$9.2 million) in recruitment fees among measures that it hopes will persuade US customs to lift the ban on the sale of its palm oil. 

Hall, and his colleague Justine Nolan, were part of a panel SDP assembled to address the company’s forced labour concerns, but both quit after six weeks, citing a lack of transparency over labour practices and delays to produce a corrective action plan. SDP has blamed Covid-19 pandemic lockdowns for the delays.

Hall has also advised glove maker Top Glove, and several Malaysian electronics manufacturers on labour practices. He told Eco-Business that under a government with serious transparency and accountability issues, Malaysia’s migration system is a mess. The government does not have any long-term migration management systems, he said, explaining that despite Malaysia being relatively economically advanced, its migration, labour and employment policies continue to mirror that of developing countries. 

It is clear there is a systemic problem in the way workers are recruited and managed in Malaysia.

Justine Nolan, human rights lawyer

The Malaysian government has been vocal about its intention to combat forced labour, having ratified the International Labour Organisation’s (ILO’s) Protocol 29 to eradicate forced labour in November 2021 and subsequently launching the National Forced Labour Action Plan, which aims to fix the problem by 2030. Most recently, Human Resource Minister M Saravanan said that Malaysia is ready to work with the United States and United Kingdom to address human trafficking. 

However, the Labour Law Reform Coalition (LLRC) contends that there continues to be a lack of effective commitment to stop forced labour by official parties, including the Home Ministry, police and embassies. 

“Every action proposed [by the government] so far, such as the Memorandum of Understanding (MOU) with Bangladesh, is riddled with questions that the human resources minister cannot answer. We believe we are going back to square one,” Irene Xavier, co-chairperson of the Labour Law Reform Coalition (LLRC) told Eco-Business. 

LLRC is not the first organisation to voice its frustration over the lack of transparency surrounding the MOU for the recruitment of Bangladeshi workers, which was signed by the Malaysian and Bangladeshi governments. Branches of Transparency International, an anti-corruption advocacy group, have in both countries voiced their “deep concern” over the agreement, which was made following media reports of syndicates controlling the recruitment and hiring process of the 320,000-plus Bangladeshi workers in Malaysia. 

From an immigration perspective, low- and semi-skilled migrant workers entering Malaysia continue to be subject to strict and contentious visa restrictions, which include prohibiting workers from changing employers or employment sectors.  

“There are no two-ways about this. It has to go,” LLRC’s Xavier said of the restriction. “Our experience shows that this has tied up workers to exploitative employers. Workers have a Hobson’s choice: continue the exploitation and remain legal or become undocumented and get a chance to earn some money.” 

Studies show that a significant percentage of workers choose the latter option, with a 2019 World Bank report estimating that the number of undocumented migrant workers in Malaysia is 1.23 million to 1.46 million, more than half the 2.9 million to 3.26 million documented migrant workers. 

Malaysia can learn from laws focused on the reporting of forced labour risks, such as Australia’s modern slavery laws, combined with mandatory due diligence laws that are emerging in the European Union, according to Nolan, who is a human rights lawyer. 

“Both government and business need to be prepared to alter the way in which they are working to address this,” she told Eco-Businesses, giving examples of changes such as more transparency about working conditions, holding directors responsible for reporting on the risks of modern slavery, and requiring that human rights due diligence be conducted in business operations. 

International corporate pressure needed

Amendments to Malaysia’s labour laws, including provisions to combat forced labour, were proposed in 2019 but political turmoil and a change in government in early 2020 interrupted the passing of these laws. 

“You can’t expect Malaysia’s legislation to keep up with [the sustainability standards of] international brands. I think it’s essentially the role of the brands — the buyers, the procurers — to ensure their supply chain in Malaysia is slavery-free,” Hall said.  

“The government has a role to play in ensuring a level playing field, but I would expect the international actors to be more advanced in putting pressure on their suppliers to prevent forced labour,” he added. 

For now, Hall has been busy filing complaints to domestic and foreign government agencies, including the CBP, to bring their attention to labour law violations. Glove manufacturers such as Top Glove and Supermax, which have had their products banned by CBP and the Canadian government on separate occasions, have engaged the activist to advise them on better labour practices, as have Malaysian electronics manufacturing services providers VS Industry and SKP Resources. 

Remedial action taken by Top Glove with the help of Hall and Impactt, an ethical labour consultancy, resulted in its ban being lifted in September 2021. Meanwhile, Supermax announced on 8 February that it has expanded the scope of its remediation payment to include former workers, having already doled out US$6 million to cover recruitment fees and other related costs that migrant workers had previously paid, as well as one-off goodwill payments of 5,000 ringgit (US$1,200). The glove maker had previously increased its minimum wage to 1,400 ringgit for all its workers and adopted an equal pay and benefit structure. 

Working with a multinational brand can help. While still under the US export ban, SDP says that its partnership with Nestle to set up a worker helpline in 2018 to address sexual harrasment complaints has proved useful. The palm oil firm has engaged Impactt to review its current practices and said that it is committed to implementing the consultancy’s recommendations “expeditiously”. 

“In the past, our workers were given the choice of either keeping their own personal documents or leaving it at the estate management office in secure lockers. Now, as advised, we have informed workers that they will need to keep their own documents in secure lockers that have been installed in the houses they stay in,” a SDP spokesperson said.

A global brand recently in the spotlight is British home appliances manufacturer Dyson. Former workers at ATA IMS, a Malaysian supplier to Dyson, are filing a suit against the company on home ground, citing forced labour, forced imprisonment, physical and psychological injuries, as well as hazardous working conditions at the supplier’s factory in Johor. ATA IMS has already been charged with four counts of labour law violations in Malaysia. 

Unless the systemic problem of how workers are recruited and managed is addressed, backed up with a stronger legal framework that protects migrants, Malaysia will continue to face troubling headlines over the exploitation of the people who help to build the country, Nolan cautioned.

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