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"Migrant Worker Abuse Remains a Problem in Malaysia", a Commentary by Lee Hwok-Aun

2016/85 15 December 2016

The Guardian’s exposé of severe worker exploitation in Samsung, Panasonic and McDonald’s shines an accusing spotlight on Malaysia’s labour practices again (please click here and here to read more). This investigative report by the UK newspaper comes two years after the NGO Verité’s extensive survey (please click here to read more) concluded that about one third of workers in electronics factories experience forced labour conditions, and five years after Malaysia pronounced a policy decision to phase out indirect recruitment through labour outsourcing, a systemic factor in violations against decent work and human rights.

There are over two million registered foreign workers in Malaysia. The estimated number of undocumented workers varies widely, between two and five million. In sum, foreign workers comprise 25% to 40% of the workforce.

The electronics industry remains Malaysia’s manufacturing linchpin and top export sector, contributing to about half of manufacturing exports and one third of total exports.  Services constitute the majority of employment and GDP. The nation aspires to be a high income economy driven by a high-skilled workforce, and to be regionally and globally recognized as an advanced society. Labour exploitation violates the dignity of the affected migrant workers, and compromises Malaysia’s progress by perpetuating low-skilled production, precarious employment, and dependency on cheap labour.

The abuses uncovered by The Guardian implicate outsourcing companies in Malaysia and recruitment agents in Nepal, the workers’ country of origin.  This system blurs the responsibilities and obligations of factory operators toward workers, who are in the thrall of the labour supply industry which maximizes profits by charging high fees and heavily indebting workers, deceiving them with false promises, imposing agonizingly long work and minimal rest, suppressing worker organization, and housing them in deplorable conditions.

The Guardian’s investigations were not sector wide, but the persisting presence of labour outsourcing suggests that forced labour prevails in many workplaces. Industrial accords, such as the Electronics Industry Citizenship Coalition, provide one layer of checks against labour abuse. Samsung, a member of the EICC, declared its compliance with the organization’s Code of Conduct and vowed action against violations. Panasonic is not a member, but also promised a full investigation and if necessary, corrective action.

The Malaysian government bears greater monitoring and enforcement responsibility, and has previously signalled intent to make the system treat migrant workers better. It has not publicly responded to the latest exposé. However, migrant labour will remain a major policy issue in Malaysia.

Dr Lee Hwok-Aun is Senior Fellow at ISEAS - Yusof Ishak Institute.

The facts and views expressed are solely that of the author/authors and do not necessarily reflect that of ISEAS – Yusof Ishak Institute.  No part of this publication may be reproduced in any form without permission.