Forced Labor Rampant In Malaysia’s Electronics Factories: Report

By Avaneesh Pandey on September 17 2014 3:39 AM

Forced labor is rampant in the electronics industry in Malaysia — a manufacturing hub for many of the world’s technology giants — affecting nearly a quarter of the industry’s workers, according to a study conducted by the monitoring group Verité.

The study — conducted over a two-year period between 2012 and 2014, and funded by the United State Department of Labor — found that 28 percent of the industry’s 350,000 workers were employed in conditions of forced labor. The practice was much higher among migrant workers, with 32 percent, or one in three migrants, toiling in jobs they could not quit, according to the report.

“Our report provides a clear sense of the scope of the problem in the industry, as well as the root causes underlying this egregious form of abuse,” Dan Viederman, CEO of Verité, said in a statement released Wednesday.

Basing its findings on interviews with over 500 workers from nearly 200 Malaysian factories, the report alleged that an exorbitantly high “recruitment fee” charged by employers was, to a large extent, responsible for the practice of forced labor in Malaysia.

“Ninety-two percent of all foreign workers surveyed paid recruitment fees in order to get their jobs. The recruitment fees that workers paid for their jobs often exceeded legal and industry standards equivalent to one month’s wage,” the report said. “Seventy-seven percent of workers who were charged fees had to borrow in order to pay them… When workers took on debt to pay for fees, this debt represented a significant and ongoing burden during their stay in Malaysia.”

Taking on debt to find employment has forced many to work overtime and in conditions bordering on human rights abuses, according to the report.

“The rate of forced labor was higher among currently indebted workers (48%) than it was in the general respondent pool (28%). This finding lends credence to the notion that excessive fee charging and the debt that follows increases vulnerability to forced labor,” the report said.

Viederman told The New York Times that many workers faced a “one-two punch” as they were paid less than the promised wage after being charged high recruitment fees.

The report also added that 94 percent of the migrants said in interviews that their passports had been seized by employers in a blatant violation of the country’s laws.

“The problem of forced labor within the Malaysian electronics industry is complex, but many of the solutions are not,” Viederman said, in the statement. “Governments, companies and civil society alike need to increase transparency into the recruitment process for workers.”

The electronics sector is Malaysia’s leading manufacturing industry and a key contributor to the Malaysian economy, accounting for nearly 33 percent of exports and 27 percent of employment in 2013