Malaysian companies that supply personal protection equipment (PPE) to hospitals all around the developed world are now being accused of modern-day slavery.
The United States recently placed several of Malaysia's largest rubber glove and palm oil exporters on a no-fly list in response to third-party allegations of human trafficking, exploitation, and forced labour of migrant workers at factories and plantations, reports the Asia Times.
Malaysia has been significantly reliant on migrant labourers, who toil in low-paid, labour-intensive jobs in the manufacturing, agriculture, construction and services sectors that are typically shunned by locals.
Around two million foreigners work in the country of 33 million, with those employed in the glove industry hailing mainly from Bangladesh and Nepal, the report also mentioned.
In reaction to a number of US Customs and Border Protection (CPB) prohibitions on their products that have resulted in hundreds of millions of dollars in damages, glove manufacturers are making extraordinary debt bondage repayments to tens of thousands of their current and former workers.
Malaysian glove makers have opened investigations into forced labour allegations and implemented related reforms in response to mounting pressure from international investors to comply with environmental, social, and governance (ESG) guidelines – though some claim the US complaints lacked merit and transparency.
On January 28, the US Customs and Border Protection issued a so-called withhold release order (WRO) against YTY Group, citing information showing the use of forced labour in its operations, making it the eighth Malaysian business to face an import ban since September 2019. Malaysia has the most WROs (six), more than any other country except China.
Only two Malaysia glove makers – Top Glove Corp and WRP Asia Pacific – have had US import bans on their goods lifted. In both instances, the companies pledged remediation payments to their employees and the CPB deemed their goods admissible for entry into the US after concluding all indicators of forced labour had been addressed.
While many critics of the CPB's actions in Malaysia acknowledge the reality of poor working conditions for migrant workers, many remain skeptical of broad claims of slavery in factories and plantations, and see import bans as a way to impose non-tariff trade barriers to limit imports from developing countries.
However, Malaysian officials have recently been more upfront in their recognition of the problem than in the past. Human Resources Minister Saravanan Murugan said certain corporations operated in "modern slavery" after visiting a glove factory in 2020, and said living circumstances for slaves on British-owned plantations during colonial rule were better than they are today.
Saravanan told parliament in November that forced labour issues had damaged foreign investors’ confidence in the country as a reputable supply hub and in the same month launched a National Action Plan on Forced Labour (NAPFL), which proposes non-binding measures aimed at improving law enforcement and enhance related laws.
The NAPFL was revealed just months after Malaysia was demoted to Tier 3 status in the US State Department's annual "Trafficking in Persons" report, which is designated for the worst offenders such as Myanmar, China, and North Korea. According to the report, the Covid-19 epidemic has contributed to an increase in labour trafficking.
Saravanan conceded that forced labour continues to be a major problem for Malaysia but expressed willingness to work with the US and United Kingdom to address the problem.
