Buyers act on discreet approach to Malaysia labour abuses - Just Style
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Buyers act on discreet approach to Malaysia labour abuses

By Giacomo Lee 04 Jul 2019 (Last Updated July 4th, 2019 15:18)

Buyers act on discreet approach to Malaysia labour abuses

Buyers have taken action in Malaysia after an 18-month investigation conducted by non-profit Transparentem uncovered evidence that some garment workers making clothes for major retailers in the Asian country were working in conditions that included indicators of forced labour.

US-based Transparentem says it spoke with “dozens” of current and former workers employed at five factories during its investigation, including migrant workers from countries such as Bangladesh, Nepal, and Indonesia. 

Some told the organisation they had gone deep into debt to pay fees to recruitment agents for jobs in Malaysia. Upon arrival, however, many workers discovered they had been deceived by the recruitment agents who had promised them different jobs and better wages than they were paid, Transparentem says.

In addition, many of the workers’ new employers confiscated their passports, making it virtually impossible for them to leave their jobs and return home. Some found themselves sleeping on floors in squalid, over-crowded company dormitories, the non-profit reports, while others said they experienced abusive working conditions at the factories.

The investigation revealed a number of indicators and risk factors for human trafficking, including the following:

Recruitment fees: Nearly 90% of the workers Transparentem spoke with reported paying recruitment fees, which ranged from more than US$700 to nearly $4,500. For context, Transparentem says the yearly per capita gross national income in Bangladesh, home country of many migrants in Malaysia, was $1,470 at the time of the investigation. In Nepal, another common source of migrant labour, it was only $790. And in Indonesia, it was $3,540. Some workers sold land or borrowed money to pay these fees, going deep into debt with the expectation of earning financial security. 

Deceptive recruitment: Migrant workers from several different countries told Transparentem that recruiters had deceived them about their salaries, the nature of their new job, and fees and salary deductions.

Retention of passports: Workers at all five factories investigated by Transparentem said the factories had taken their passports and charged a deposit if workers needed to use their documents for any reason.

Poor living conditions: Workers at four of the five factories said they lived in dormitories that were overcrowded, dirty, cramped, or without adequate kitchens or bathrooms, or even sufficient protection from the weather.

Abuse of vulnerability and abusive working conditions: At two factories, workers said supervisors sometimes physically abused and threatened them.

Buyers’ response

Transparentem is unusual in its approach to addressing such concerns in that it does not release the complete details of its investigations to the public. Instead, it liaises first with what it calls those who can “rapidly transform markets.”

“We commit to telling those recipients – principally brands and retailers – what they may not, but should, know about those with whom they do business. This includes the activities of their direct and indirect suppliers,” it says on its website.

After providing grace periods to begin remediation, the organisation discloses consolidated and updated reports to strategic intermediaries such as investors, regulators, and select journalists. This targeted disclosure builds a sense of urgency to mobilise resources and remedy highlighted problems.

“Our goal is for brands to move beyond quick public relations fixes and towards strategic, sustained and responsible sourcing,” it adds.

In the spring of last year, Transparentem contacted 23 major apparel brands it had identified as likely having recent or ongoing buying or licensing relationships with the five Malaysia factories it investigated.

“We sat down with leaders of many of these companies, presented what we had learned about the hardships faced by the workers in their supply chains, and urged them to act,” the organisation says.

Most of the brands took action. Of the 23 companies, 15 collaborated on remediation efforts, one worked independently, and one later joined remediation efforts after a change in ownership at the company. “The remaining companies, to our knowledge, declined to participate in remediation.”

In addition, Transparentem says buyers commissioned audits or assessments at four of the five facilities, which confirmed many of its findings and secured commitments for remediation, including reimbursing recruitment fees and returning passports.

Two buyers chose to share the cost of recruitment-fee reimbursement with their supplying factory, even though one of those buyers had ended their purchasing relationship with the factory in 2015. Two additional buyers who were no longer sourcing from the factories re-engaged and assumed leadership roles in the remediation process. And four of the buyers at one factory elected to expand their remediation efforts to a related Malaysian factory that was not part of Transparentem’s investigation.

“As of May 2019, the total amount of recruitment fees already paid back or scheduled to be refunded to workers was more than $1.7m, and 1,600 passports had been returned to workers,” the organisation says. “An additional factory had already begun returning passports shortly before Transparentem engaged with buyers. According to one audit report at another factory, five workers who recovered their passports immediately stopped working and left.”

Despite this progress, the non-profit notes more work remains to be done and continues to monitor conditions at the five facilities and in Malaysia more broadly.

“With Malaysian and foreign governments taking notice, and Western brands putting pressure on their suppliers, we look forward to a Malaysian garment industry where forced labour is a practice of the past,” it says.

Despite efforts to crack down on modern slavery in supply chains, some 24.9m people remain trapped in forced labour worldwide. Yet there are a number of red flags that brands and retailers should be aware of – as well as steps they can take to mitigate the problem: Red flags for modern slavery in fashion supply chains.