The electronics industry in Malaysia contributes significantly to the country’s GDP and overall economic performance, accounting for approximately one-third of the country’s total exports. The industry also has widespread use of forced labor, one of several forms of modern day slavery and a grave human rights violation.
By Erin Sullivan on October 14, 2014
KUALA LUMPUR, Malaysia — The electronics industry in Malaysia contributes significantly to the country’s GDP and overall economic performance, accounting for approximately one-third of the country’s total exports. The industry also has widespread use of forced labor, one of several forms of modern day slavery and a grave human rights violation.
According to the Malaysian Investment Development Authority, the electronics industry accounts for approximately 32.8 percent of the country’s total manufacturing exports. Approximately 27 percent of the Malaysian population is employed by the industry, according to a 2013 report.
Four sub-sectors comprise the Malaysian electronics industry. Consumer electronics, which includes products such as blue-ray players and TVs, account for $8.7 billion worth of the country’s total exports. Electronic components, such as semiconductors used in cell phones, make up approximately $34 billion of total exports. Industrial electronics, such as computers and telecommunications equipment, account for 27 percent of investments in the industry, while electrical products like washing machines and refrigerators constitute the largest sub-sector in the industry and account for 75.6 percent of investments.
While the Malaysian electronics industry is impressive and has contributed significantly to economic growth and development efforts in the country, it also boasts a horrific human rights record. Forced labor is a serious and widespread problem in the industry, according to a report recently released by the non-profit organization Verité.
According to Verité, an organization that helps companies identify human rights violations, such as forced labor, in their supply chains, one in three of foreign workers interviewed in the Malaysian electronics industry is a victim of forced labor. Over the course of two years, the organization interviewed 501 electronics workers in order to measure the prevalence of forced labor in the industry.
The study found that 28 percent of the workers were victims of forced labor. Thirty-two percent of the foreign workers who were interviewed were involved in forced labor. The study was conducted across all sectors of the electronics industry, included both Malaysian and foreign workers and accounted for workers of both sexes leading researchers at Verité to conclude that forced labor was widespread throughout the industry.
Almost all of the workers interviewed, 92 percent, paid recruitment fees that they were then required to pay off with high interest before being able to leave their job. Approximately one-fifth of those workers were misled about the details of the job or were coerced into taking it. Ninety-four percent were required to surrender their passports upon arrival, and about two-thirds of those who surrendered their passports were denied access to the document. As a result the majority of the workers were unable to leave before paying off their debts and sometimes were not allowed to even leave their place of residence without permission from their employer.
Verité researchers emphasize that they used a narrow definition of forced labor and passport retention while conducting the study in order to collect clear and unambiguous results. The results, however, paint a disturbing picture of the prevalence of forced labor in the Malaysian electronics industry, within which both Malaysian electronic companies and multinational corporations, or MNCs, operate.
A large portion of the electronics and electronics parts sold in the U.S. and Europe come from the Malaysian electronics industry. Verité estimates that “virtually every device on the market today may have come into contact with modern-day slavery.” As a result of similar findings in recent years throughout businesses worldwide, consumers have begun lobbying MNCs to investigate their supply chains for human rights abuses like forced labor. Organizations like Verité have since begun working with MNCs and conducting studies to identify problems and provide suggestions for the best solutions to remedy the situation.
About the Author:
Erin Sullivan is from Littleton, Colorado. She graduated this past May from Gonzaga University with a B.A. in International Relations. Erin admires the Borgen Project’s mission to alleviate global poverty and give a voice to the poor. She views the Borgen Project as one of the most influential poverty alleviation organizations in the United States, and believes everyone should play a part in helping those among us who are not as fortunate. She was a delegate in Gonzaga’s Model United Nations organization and wishes to one day work for the U.N.