Glove Manufacturers Repurpose ESG Compliance Into Healthcare

Glove Manufacturers Repurpose ESG Compliance Into Healthcare
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A Better Future From Malaysia To The World

MARGMA's ESG Drivers (From left to right) - CHAN Wone Fu - CEO, Anil Taneja - Social Compliance Task Force Chairman, Lim Kwee Shyan - PP, Hue Kon Fah - VP, Dr. S Supramaniam - President (P), Denis Low - IPP, Dato’ KM Lee - PP, Geerija Menon - ESG Director

The Malaysian Rubber Glove Industry (RGI) is fully committed to upholding total Environmental, Social and Governance (ESG) compliance in its stride to be an exemplary Global Citizen. We are opening a new chapter of total strategic motion in compliance and we brook no excuses as we move forward as the leading producer for the world.

Malaysia is the world's biggest supplier of medical gloves, satisfying 68% of the global demand for this necessity, for the past 30 years. Today, this industry continues to be a significant contributor to Malaysia's Gross Domestic Product with export revenue projected to hit RM55 billion for the year 2021. 

The ongoing global COVID-19 pandemic has shifted how businesses are managing ESG practices with customers, employees, investors, regulators, NGOs and the wider society. 

All our industry members stand together with me to forge ahead to rectify, to remediate and to rediscover our principles in protecting and sustaining our Environment, to ensure the welfare and well-being of all our employees under the social chapter and to safeguard good ethical practices in Governance of our business. 

ENVIRONMENTAL - Targets to Reduce GHG emissions in the operations by 10% and become Carbon Neutral by 2050

The Malaysian RGI regularly ensures carbon dioxide emissions and effluent water discharge conform to the permissible limits set by the Department of Environment. Scrubber systems are upgraded to cap malodour emission limits allowed by the Environmental Quality (Clean Air) Regulation 2014. 

In the 12th Malaysia Plan, Malaysia committed to becoming a carbon-neutral nation where any carbon dioxide released into the atmosphere is balanced by an equivalent amount being sequestered. MARGMA, likewise, declares the glove-making sector to reduce greenhouse gas emissions from factories by 10% and become carbon neutral by 2050.

Extensive R & D is ongoing within the Industry as well as MARGMA's collaborative work with Malaysian Rubber Board (MRB) and Malaysian Rubber Council (MRC), in areas of water conservation, biodegradability, energy efficiency initiatives, alternative energy sources, sustainability and green labelling of Malaysian-made rubber gloves.

A vibrant downstream eco system has been developed wherein, circular economy initiatives have been developed: reclaiming rubber waste for manufacture into other rubber products. Improved biodegradability of gloves, places less stress on landfills. 

SOCIAL - Managing the ILO's 11 indicators of forced labour:  Debt Bondage, Adopted Zero Cost Policy, Achieved Zero fatalities in Health & Safety, Toward Compliance of Social Audits, To Develop an ISO Standard on Social Compliance

The industry considers the entire globe to be its community, and it places a special emphasis on outreach programmes that address healthcare and humanitarian needs. 

We stood up to be counted during the COVID-19 pandemic wherein, the industry players donated gloves to local hospitals, national security frontliners and also the governments of China, Nepal and African countries. Significantly, the top 4 players Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd collectively donated RM400 million to the Malaysian government's COVID-19 fund. Additionally, the MARGMA Foundation accords scholarships and financial aid to children of single mothers and rubber tappers.

Currently, the RGI workforce is made of 45% locals and 55% Foreign Workers (FW), representing less than 1% of total FW in Malaysia. The RGI has a 5-year plan to further reduce the FW ratio to 40%, or roughly 3% per year. This will be facilitated by the last mile automation as well as advancements in manufacturing practices. In an effort to encourage more locals to seek a career path within the Glove Industry, MARGMA is embarking on a focused training for Malaysians desirous of joining the Rubber Glove Industry's workforce. This certification programme to be launched in 2022, designed by MARGMA, is a joint effort with MPIC, MRB and MRC.

MARGMA President : Dr. Supramaniam Shanmugam

As manufacturing industries are maturing in developing countries in Asia, so are the needs to raise the living standards and human rights practices with those of developed countries. MARGMA with inputs and guidance from International Labour Organization (ILO), has enhanced its Code of Conduct on social compliance for all its members. To augment global surveillance, MARGMA members have all agreed via a resolution to be registered with Supplier Ethical Data Exchange (SEDEX) and undergo the Sedex Members Ethical Trade Audit (SMETA). SMETA's measurement criteria is in sync with the Ethical Trading Initiative (ETI) Base Code, which in turn is based on both international standards and ILO conventions. SMETA focuses on the pillars of labour, health, safety and environment to determine good business ethics.

MARGMA is collaborating with various stakeholders to conduct webinars and create awareness among its members. We recently joined hands with University of Nottingham working in partnership with the British High Commission, to conduct training on labour compliances. This was followed by a collaboration with ILO on the decent work in the rubber supply chain project, whereby ILO will provide MARGMA members various trainings on the ILO 11 indicators.  

To stem out debt bondage, MARGMA members since November 2019, have adopted a Zero Cost Policy in Foreign Workers recruitment.  For those FW, who came in prior to 2019, and are still in debt due to high agency fees paid to unscrupulous agents in source countries, our members embarked on an arduous and complicated debt assessments exercise to ascertain, the actual debt, and went ahead to remediate accordingly. Debt bondage is now well managed as most of our members have remediated payments to their workers' on past debts, if any. 

In advocating transparency, MARGMA is collaborating with International Organization for Migration (IoM), a United Nations related organization, to facilitate ethical recruitment practices amongst recruitment agents. With transparent G to G agency fees and ethical recruitment in place, the unscrupulous agents will be weeded out. This, together with Zero cost policy, will ensure debt bondage do not occur moving forward. 

MARGMA members are now working diligently to expand and improve workers' hostels according to the Workers' Minimum Standards of Housing and Amenities Act 1990 (Act 446). It is a capital intensive and time consuming process and MARGMA is constantly engaging with the MoHR and Ministry of Housing and Local Government on this initiative.

GOVERNANCE - Ethical and fair Business Practices

The Rubber Glove Industry is a healthcare manufacturing industry and consistently invest into strict quality control to meets safety and standards. Members currently undergo about four levels of audits including internal audits, customer-driven audits, independent third-party audits and government audits by MoHR.

Recently, one of our members was the only Malaysian healthcare manufacturing company, and one of the three healthcare industry companies to be included on the Dow Jones Sustainability Indices. Some of our other members are on the FTSE4Good Bursa Malaysia Index which assesses Bursa Malaysia-listed companies for eco-friendly practices, anti-corruption, corporate governance and labour standards. This clearly indicates our members' outstanding commitment and dedication towards ESG practices.

MARGMA which represents 95% of glove manufacturers and supply chain associate members, must lead globally, not only by the quantity of gloves exported but shows global leadership for the Rubber Glove Industry. Work has been initiated to set Malaysia up as ; a) The International Rubber Glove Innovation Centre ; b) Permanent Secretariat Office for the International Federation of Glove Manufacturers ; and c) An international glove magazine for global circulation, hosted by Malaysia ; d) A 10-year blueprint development for the Malaysian Rubber Glove Industry.   

The way forward for the RGI in Malaysia, is to enhance on our existing USPs of quality, quantity, on time delivery, price affordability and loyalty. To this we need to add on our new strengths in ESG and global leadership, brought about by all the above initiatives by our Industry members.

By President of MARGMA
Dr Supramaniam Shanmugam