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Supermax to address forced labour claims 'expeditiously', divert US-bound gloves elsewhere

Supermax to address forced labour claims 'expeditiously', divert US-bound gloves elsewhere
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KUALA LUMPUR (Oct 21): Supermax Corp Bhd, whose share price lost ground, said the company is taking immediate and necessary steps to address the issue related to the import ban on its products imposed by the US Customs and Border Protection (CBP) caused by forced labour allegations expeditiously.

Following the sanctions imposed by the US, Supermax noted that it will take steps to divert goods bound for the US to other markets where possible.

Supermax revealed in a bourse filing that 20% of its sales are derived from the US market.

At the same time, Supermax announced that its US representatives are in touch with the CBP to obtain more clarity and information on the Withhold Release Order (WRO) issued and the required measures going forward.

To recap, the CBP said it has directed its officers at all US ports of entry to detain disposable gloves produced by Supermax's three subsidiaries served with WRO issued by CBP.

"CBP issued a Withhold Release Order against Supermax Corp Bhd and its subsidiaries based on information that reasonably indicates their use of forced labour in manufacturing operations. CBP identified 10 of the International Labour Organization's (ILO) indicators of forced labour during its investigation," said CBP.

Meanwhile, CBP Office of Trade Executive Assistant Commissioner AnnMarie R Highsmith said with 10 of the 11 forced labour indicators identified during the course of investigation, CBP has ample evidence to conclude that Supermax and its subsidiaries produce gloves in violation of US trade law.

"Until Supermax and its subsidiaries can prove their manufacturing processes are free of forced labour, their goods are not welcome here," she added.

According to Supermax, it has embarked on its undertaking to meet the ILO standards on migrant workers since 2019.

"The process has well started and Supermax is surprised that due consideration has not been given to the fact that corrective steps have started and improvements made to labour welfare. We will speed up the process to come to meeting the ILO standards," it added.

The glove maker said it on Oct 11 commissioned an independent international consulting firm to conduct an audit into the status of foreign workers at its manufacturing facilities focusing on the 11 ILO Forced Labour Indicators.

The audit is currently ongoing.

Supermax's share price fell 20 sen or almost 9% to RM2.05 — its lowest closing since April last year.

At its closing share price of RM2.05, Supermax's market capitalisation stood at RM5.33 billion based on the company's 2.6 billion issued shares.

Read also:
US import ban expected to have significant impact on Supermax's earnings, say analysts
US Customs issues seize order on Supermax products on forced labour finding

Kathy Fong