On Monday, the Malaysian glove manufacturer Supermax Corp announced that it has introduced a new foreign worker management policy, two months after the U.S. government halted imports of the firm’s products over alleged labor abuses.
In October, U.S. Customs and Border Protection (CBP) made the move following an investigation in which it found Supermax and its subsidiaries in breach of 10 of the 11 forced labor indicators outlined by the International Labour Organisation (ILO). Canada followed suit in November.
Supermax said in a statement that it was introducing changes that would bring the firm and its suppliers into line with the ILO’s forced labor standards, Reuters reported. “The effectiveness and implementation of these policies will be inspected by different levels of ongoing audits with at least two auditing processes, and two additional U.S.-based auditors,” it said.
Whether this turns out to be anything more than human resources sophistry remains to be seen, but it is a sign of the increasing pressure that Malaysian firms are facing for their heavy reliance on masses of poorly treated laborers. Over the past two years, seven Malaysian firms have faced U.S. import bans over allegations of forced labor and its associated practices including physical and sexual violence, intimidation and threats, and the retention of workers’ identity documents.
In March last year, the U.S. government banned imports from the world’s largest glove maker, Top Glove, saying it had found reasonable evidence of forced labor practices at the company’s production facilities in Malaysia. (The ban was lifted in September after the company said it had resolved all indicators of forced labor in its operations, citing a report by an independent consultant.) Later in the year, the U.S. also banned imports from the palm oil plantation giants FGV Holdings Berhad and Sime Darby Berhad on similar grounds.
In November, the high-tech home appliance maker Dyson cut ties with its biggest supplier, the Malaysian firm ATA IMS Bhd, following allegations by an unidentified whistleblower and an independent audit that found poor living conditions, concerns of retaliation, and unpaid allowances, among other issues.
For these reasons, in its most recent Trafficking in Persons (TIP) report, released in July, the U.S. State Department dropped Malaysia to “Tier 3,” its lowest ranking, putting it alongside North Korea, Myanmar, China, Syria, and Turkmenistan.
The sheer number of cases suggests that Malaysia’s fast-growing export economy has developed a systemic dependence on the mass exploitation of workers, many of them migrants from other parts of Southeast Asia – and many of them undocumented.
As Reuters noted in a detailed analysis published last month, part of the news agency’s unparalleled coverage of labor issues in Malaysia, the country has “for decades banked on migrant workers to power mainstay manufacturing and agriculture,” which has helped the country become “an integral part of the global supply chain for products as diverse as semiconductors, iPhone components, medical gloves, and palm oil.”
But with foreign countries increasingly aware of the situation on the ground in Malaysian factories and on plantations – Reuters quoted an analyst for the London-based ethical trade consultancy Impactt as saying that Malaysia had become “the poster child” for forced labor issues – it is only a matter of time before things begins affecting future investment plans and supply contracts.
The Malaysian government no doubt recognizes this. Like Supermax, it has pledged to drag itself into compliance with internationally recognized labor standards, and last month charged the Dyson supplier ATA with a number of labor law violations.
“The government will continue to give attention to challenges in addressing forced labor issues, especially those involving foreign workers, and will continue to implement various improvements to existing initiatives,” Human Resources Minister M. Saravanan said after Malaysia was downgraded by the State Department’s TIP report.
However, assuming the government has a genuine desire to get to the bottom of the problem, it remains unclear how quickly and effectively its regulators can address abuses that occur on remote plantations and in the far reaches of the network of sub-contractors that make up the Malaysian supply chain. Kuala Lumpur may soon discover that a bad reputation, having been acquired, is hard to shed.