Forced labour’ rife in electronic factories

September 17, 2014

Several US, European, Japanese and South
Korean multinationals have operations in Malaysia, including Samsung
Electronics Co Ltd, Sony Corp, Advanced Micro Devices, Intel, and Bosch
Ltd.

KUALA
LUMPUR: Nearly a third of some 350,000 workers in Malaysia’s
electronics industry – a crucial link in the international consumer
supply chain – suffer from conditions of modern-day slavery such as debt
bondage, according to a study funded by the US Department of Labor.




The survey by Verite, an international labour rights group, found
that abuse of workers’ rights – particularly the tens of thousands from
low-wage countries like Nepal, Myanmar and Indonesia – was rife in a $75
billion sector that is a mainstay of the country’s export-driven
economy.




Several US, European, Japanese and South Korean multinationals have
operations in Malaysia, including Samsung Electronics Co Ltd, Sony Corp,
Advanced Micro Devices, Intel, and Bosch Ltd.




Some big brands use suppliers such as Flextronics, Venture
Corporation, Jabil Circuit, and JCY International to make parts for
smartphones, computers and printers.




The US government funding adds credibility to the report which is likely to come as a surprise to many consumers.




Malaysia is a middle-income country where labour standards have been
seen as better than in some of its Asian neighbours such as China, where
questionable labour practices have drawn scrutiny in recent years.




Verite did not single out any companies in its report, released on
Wednesday, but blamed a system in which government and industry policies
have given Malaysian recruitment firms increasing control over workers’
pay and other conditions.




“These results suggest that forced labour is present in the Malaysian
electronics industry in more than isolated incidents, and can indeed be
characterised as widespread,” the group said.




Several US companies with operations in Malaysia told Reuters they
could not comment until seeing the full report. An Intel spokesman said
most of the chipmaker’s 8,200 employees in the country were Malaysian
and it did not use contractors. Flextronics said it was aware of issues
related to foreign workers and had “rigorous” policies to prevent
abuses.




Malaysian government officials did not immediately respond to requests for comment.




The study comes three months after Malaysia was downgraded to Tier 3
in the US State Department’s annual Trafficking in Persons report, which
cited a lack of progress in protecting the rights of about four million
foreign workers.




The report, based on interviews with 501 workers, found that 28 per
cent of employees were in situations of “forced labour”, where work is
coerced through factors including indebtedness from excessive fees
charged by recruiters.




That figure rose to 32 per cent for foreign workers, who are often
mislead about salary and other conditions when they are recruited in
their home countries, and are commonly charged excessive fees that lead
to indebtedness.




Verite said the numbers were based on conservative definitions. It
found that 73 per cent of workers displayed “some characteristics” of
forced labour.




Stability


Malaysia’s electronics and electrical industry made up 33 per cent of
exports in 2013. In 2011, foreign investment in the sector accounted
for $2.68 billion, or 86.5 per cent of the total.




Malaysia has benefited in recent years from a reputation for
stability and low costs, gaining fresh investments after floods in
Thailand in 2011 crippled factory operations there.




On average, workers in the survey were found to have paid 2,985
ringgit to brokers in their home country and in Malaysia as payment for
their passage and jobs. That is more than the average per-capita annual
income in Nepal.




Unable to afford a lump sum upfront, more than two thirds of workers who paid broker fees had to borrow money.




One in five immigrants were working more than the suggested 60 hours
of overtime a week – the industry’s international standard limit – the
group said. Malaysian law allows employees to clock up to 72 hours of
overtime.




Malaysian laws have been amended in recent years to encourage the
growth of recruitment companies that provide workforce services to
multinationals, including paying, accommodating and disciplining
employees.




“Liability over violations of worker rights is obscured, creating
vulnerability on the part of the worker to exploitation and abuse,” the
group said.




The group found workers’ passports were often confiscated by
recruitment firms, which is illegal in Malaysia. Some firms were found
to charge more than $1,000 for a worker to “borrow” his or her own
passport. - Reuters