Late last month, the U.S. Customs and Border Protection agency (CBP) revoked its ban on imports from a Malaysian rubber gloves manufacturer accused of engaging in forced labour.

The CBP had previously issued a ‘Withhold Release Order’, barring imports from WRP Asia Pacific Sdn. Bhd. In October, the CBP published a statement indicating that WRP ‘products are produced, in whole or in part, using forced labor’.

Whilst the CBP claims there has been ‘continuous communication’ between the CBP and WRP, no evidence has been provided of prosecutions, remedy provided to workers or changes in corporate practices. Yet the CBP no longer holds concerns over forced labour. It is now confident that WRP is adhering to U.S. and international labour standards. Imports are resuming.

Less than a week before the CBP’s announcement, the US Food and Drug Administration (FDA) documented a shortage of protective rubber gloves in the US. International media organisations also reported on a global ‘impending glove shortage’, which is rapidly intensifying due to increased demand and the impacts of COVID-19 in Malaysia, the world’s largest glove producer. Factories have been closed and restrictions on the movement of people have been imposed.

The timing of this decision by CBP is not coincidental. Governments across the world are desperately trying to acquire and stockpile medical supplies as frontline medical staff report shortages. Demand is outstripping supply, and the US is the largest consumer of gloves per person. Top Glove, which is the world’s largest manufacturer, also based in Malaysia, has said that it is seeing orders for as many as 2.6 billion gloves per week, which is double its full capacity. They are now running production lines 24 hours a day. The EU Ambassador to Malaysia wrote to the International Trade and Industry Minister in March asking Malaysia to urgently increase supply.

The consequences of a lack of medical equipment will likely have dire implications for frontline medical staff. It may also hurt political careers should the shortage stoke public criticism.

Reports of abusive working conditions in the Malaysian glove manufacturing industry are frequent and often involve migrant workers. Statistics on the migrant labour force and undocumented workers vary considerably, but ILO sources indicate that 3 to 4 million migrants currently work in Malaysia, constituting up to 30% of the country’s entire workforce. This includes an estimated 1.3 million undocumented migrant workers, who are not protected by labour-related laws such as the Employment Act.[1]

WRP is not the only company to be associated with rights abuses. The industry has a history of mistreating migrant workers. Professor Philip Alston, the UN Special Rapporteur on extreme poverty and human rights, stated last year that migrant workers in Malaysia are set up for exploitation by a confluence of unscrupulous recruitment agents and employers, harsh immigration policies, and a lack of enforcement of labour protections. The ILO has said that the scapegoating of migrants has contributed to an environment where exploitation and abuse are sometimes viewed as acceptable.

Recruitment agencies, both in the country of origin and in Malaysia, are often found to impose high recruitment fees, rendering migrant workers vulnerable to debt bondage. It is also common for migrant workers to be made to surrender their passports or identify documents, with recruiters then requiring payment of large deposits to access them. Migrant workers without access to their passports are particularly vulnerable to harsh working conditions as well as poor housing and living conditions (further aggravated by wage deductions and low wages).

Given the prevailing context in the industry and the new pressures placed on frontline glove manufacturers and workers to increase production, it is difficult to envisage producers radically altering their processes to align with U.S. and international labour standards. WRP installed new management in January who admitted that workers with irregular status had been hired, pledging to repay outstanding wages. This should be welcomed. The CBP does not claim however that WRP or other Malaysian producers have actually provided this compensation or that they are now adhering to international labour standards. Rather, the CBP ‘provided feedback’ to the company to adjust their practices.

A Faustian bargain looks to have been made. The CBP, possibly under pressure from other US government agencies or officials, had to choose between meeting the immediate needs of the US domestic population, and upholding their ban and continuing work to ensure migrant labourers in Malaysia are not exploited whilst producing goods for the American market.

The original decision, based on Section 307 of the Tariff Act (1930), which prohibits the importation of merchandise produced by forced labour, was commendable. It is rare for abusive labour conditions to be a determinative factor in public procurement decisions. However, the welfare of the American population may have taken precedent over the welfare of those less fortunate working elsewhere.

Rather than benefitting from safe and decent employment, migrant workers in Malaysian supply chains are likely to be amongst the hardest hit by the pandemic. They already suffer from dangerous, insecure, poorly paid work, often with no safety nets for themselves or their families.

One can sympathise with the dilemma facing the CBP and the pressure they must be facing.  However, the risks to vulnerable workers can be mitigated by coordinated action. This need not be a choice between the welfare of one group over another.

The goal here should be to protect victims, facilitate remedy and to prevent re-occurrence. The complex nature of the glove manufacturing supply chain suggests that interventions by several different stakeholders are required to achieve this. Financial incentives need to be reconfigured, and the culture of indifference to and disrespect for migrant workers need to be addressed in Malaysia. Business decisions must not exacerbate the risk of health or economic harm from the pandemic.

Given the seriousness of the issues identified, establishing clear, effective and transparent systems for workers to submit complaints and to obtain remedy will help ensure that companies supplying health equipment to the US meet their responsibility to protect workers’ rights. Governments and businesses have a collective responsibility here. Here is how the CBP could approach this.

• The CBP, with its private sector and U.S. Government agency partners, should be working in coordination with Malaysia’s Human Resources Ministry, the Labour Department and the Industrial Relations Department, as well as exporting businesses and unions, to focus on the safety and welfare of migrant workers across the sector. Coordinated action is key to creating the incentives and legal enforcement regime necessary for systemic change.
• When allegations are made, understand the nature and severity of the incident, including by engaging directly with the affected workers. Don’t cut and run; U.S. companies should commit to resolving the issues. Investigate, identify what the affected worker/s needs, and respond proactively. Where remedy is provided, follow up with the affected workers.
• Actions taken should not further endanger workers’ safety or risk retaliation, particularly if local police are known to be corrupt. Affected workers should be supported in finding alternative employment. Actions and outcomes should be reported to facilitate transparency and accountability. The CBP should revise its Responsible Business Practices process and require a worker-centred remedial strategy at importing partners in Malaysia.
• A trade union agreement and management system should form part of a grievance mechanism at WRP and other importers capable of addressing individual grievances and collective disputes.

There are distinct advantages of enhancing access to remedy in supply chains. This includes demonstrating responsibility for the welfare of workers, early identification of risks and early resolution of disputes, which benefits all stakeholders. Given the severity of the claims made against WRP, an independent and trusted whistleblowing mechanism should also be established across the industry to allow workers to flag concerns or abuses safely.

The CBP has taken firm action to address abusive employment practices in the past. It cannot guarantee decent work for all. But it can set conditions upon which to rescind a ban on imports into the US. And it can deliver a degree of transparency on the actions of producers.

Some of the most vulnerable people are now producing equipment for US healthcare professionals. We owe it to them to do more to ensure that they enjoy safe, decent work, and are not exploited in the process.

 

Ben Rutledge is a Research Fellow at the Corporate Responsibility Initiative, Harvard Kennedy School. He has previously worked on business and human rights issues and cases with the UN Office of the High Commissioner for Human Rights and the Ethical Trading Initiative. The views expressed above are those of the author alone and do represent the views of the Harvard Kennedy School.

 

[1] European Commission. Sustainability Impact Assessment (SIA) in support of Free Trade Agreement (FTA) negotiations between the European Union and Malaysia. Interim Report. December 2018. http://trade.ec.europa.eu/doclib/docs/2018/december/tradoc_157583.pdf.

See also: Counting Migrant Workers in Malaysia: A Needlessly Persisting Conundrum. Yusof Ishak Institute. Lee Hwok-Aun and Khor Yu Leng. 2018. https://www.iseas.edu.sg/images/pdf/ISEAS_Perspective_2018_25@50.pdf