This article first appeared in The Edge Malaysia Weekly on February 14, 2022 - February 20, 2022

IN a rare move, the US Customs and Border Protection (CBP) held a roundtable with the Malaysian media last week to clarify the work that the government agency does to combat forced labour.

Its message to Malaysian companies that have been affected by the sanctions it has imposed is simple: Work with the CBP in taking the corrective actions needed, so that they can once again enjoy the benefits of having access to the US market.

According to the CBP’s website, there are six active Withhold Release Orders (WROs) and one Finding issued against several Malaysian companies for various breaches of the International Labour Organisation (ILO)’s 11 Indicators of Forced Labour.

A WRO is issued when the agency has reasonable evidence of the use of forced labour in the manufacturing or production of goods entering the US supply chain, and allows the CBP to detain the products in question unless the importers can prove the absence of forced labour in the products supply chain.

In the case of a Finding, it is issued when the CBP has conclusive evidence of the use of forced labour, and allows the agency to seize the products in question at all US ports of entry.

Palm oil giant Sime Darby Plantation Bhd (SDP) was issued a WRO against its products on Dec 16, 2020. This was subsequently converted into a Finding last month, and the CBP announced that it will seize palm oil products from SDP’s Malaysian operations at all US ports of entry.

In a statement, SDP said that the finding by the CBP is “hugely disappointing”, coming just ahead of the publication of a report to be issued by an independent ethical trade consultancy appointed by SDP.

Asked for a comment, deputy executive assistant commissioner of the CBP’s Office of Trade John P Leonard said that “persistent engagement” with the CBP is key to the US government agency modifying or revoking its WROs.

“We really look forward to SDP coming to us, and working with us, on what they’ve got on their audit. But again, the key to moving these things along is that persistent engagement and leaning in from top levels of the company to show us that they are serious about it,” he explained.

Eric Choy, acting executive director, trade remedy law enforcement at the CBP’s Office of Trade, echoed a similar sentiment. “If a company wants to work with the agency to remediate the WRO or Finding against them, we will engage fully and wholeheartedly with them. It’s not something that we will go and proactively pursue, so [they] need to come and talk to us,” he said at the roundtable discussion.

The CBP cited Top Glove Corp Bhd as an example of a company that did take proactive steps to engage with it.

Issued a WRO in July 2020 and subsequently a Finding in March last year, the world’s largest medical gloves maker had its Finding modified in September last year after it addressed all indicators of forced labour identified at its Malaysian facilities.

“[Top Glove] proactively reached out from the highest level of the company and worked very closely with us. They followed through on strong commitments they made to remediate the working conditions for their workforce, and not only did they pay more than US$30 million to workers trapped in debt bondage, but they also made significant improvements to the working and living conditions in their facilities, which were independently verified,” said Choy, noting the timespan for modification or revocation of a WRO is not a fast process.

“Sometimes, it takes restructuring by the company in order to address these indicators of forced labour. In the case of Top Glove, from the issuance of the WRO to the modification of the Finding, it took about 14 months,” he said.

Leonard observed that for a large company with thousands of employees, rectifying these problems cannot be done in a week or even a month as there are many processes involved, including paying employees back and changing conditions. “Companies can move as quickly as their organisations will allow them,” he said.

On a question of whether most of the allegations of forced labour in Malaysian companies were brought about by migrant worker rights specialist Andy Hall, Leonard said that Hall is not the only source of information that the CBP relies on.

“Hall is frankly just one of many. We gather our information from a variety of sources, be it governments, NGOs, civil society organisations and even the media.

“Hall is out there. He works a lot in this space, but he is by no means a single-focused supplier to the CBP of allegations or information. It is really a wide scope of evidence and intelligence,” he said.

Another company that has been impacted by CBP sanctions is glove maker Supermax Corp Bhd, with its subsidiaries Maxter Glove Manufacturing Sdn Bhd, Maxwell Glove Manufacturing Bhd and Supermax Glove Manufacturing issued WROs in October last year.

Since then, the company has been taking proactive measures to address the sanctions. Recently, it rolled out a new and comprehensive Foreign Worker Management Policy to strengthen its Human Resources management and migrant workers policies and practices. As part of this new policy implementation, Supermax has expanded the remediation payment scope to include former direct hire and contract workers who had left the company before Oct 1, 2019.

In addition, it announced the setting up of a remediation fund for former workers and all other eligible workers according to revised eligibility criteria for remediation. The sinking fund would be reviewed accordingly when it depletes and is governed by an advisory committee consisting of management, consultants and migrant worker rights specialist Hall.

To date, Supermax has paid out a total of RM25.67 million in remediation covering past recruitment fees, ex-gratia and other related costs to its workers. The company has also raised its minimum wage to RM1,400 per month for workers across all categories, which is RM200 more than the current minimum wage in Malaysia.

Adrian Pereira, an executive director with social justice NGO North South Initiative, says that while it is a good move to expand the remediation payment scope,  that alone is not the sole indicator of workers getting justice at the work place.

“There should also be punitive action on the actors involved in causing forced labour conditions against the workers and this is yet to be seen. Labour agents, managers, labour inspectors and government officials who failed to protect the workers should be answerable,” he stressed.

He adds that sinking funds, like the one set up by Supermax, serve as an accountability platform for companies, to ensure transparency to a certain degree on the remediation.

“What is important is the sinking fund has workers’ representatives who understand the issue well with a deep sense of restorative justice. Remediation must also come with long-term accountability mechanisms like enabling the workers to form a union.

“If the workers are unionised and have a collective agreement, they can demand equitable benefits in terms of decent working conditions and other social protections as per ILO standards,” he said.

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