Monitoring Sustainability of Globalisation (MSN), Malaysia PROCURE IT Pathma Krishnan Monitoring Sustainability of Globalisation (MSN), Malaysia

Agenda Introduction to Malaysia’s E&E sector Infrastructure of Migration State Migrant Policies on Migrant Workers Field Studies Conclusion

Introduction to Malaysia’s E&E sector 1972: First semiconductor plant in Penang 1970s: 577 employees with 4 companies Now, they have more than 1500 companies with more than 600, 000 employees Total investment of RM 108 billion (USD 34.83 billion) 2008: Overall export valued at RM 233.8 billion (USD 75.4 billion)

Infrastructure of Migration Malaysia is a recipient of various communities in Asia It is both a receiving and sending country In the last 18 years, there has been substantial increase in regular and irregular migration into the country 2007: Malaysia recorded 72.7% increase in migrant labor 2010: 2 million registered regular & 1 million irregular migrants

Migrant flow- receiving country

Selection Of factories and profile Two major Electronic Manufacturing Services (EMS): Jabil Circuit and Flextronics JABIL: 15 Fortune 500 company Designs, test, manufacturers ODM and OEM Clients: Cisco System, HP, Echostar, Nokia, Gateway 2000 and others Malaysia : About 5000 over employees, both local and outsourced migrant workers

Continued FLEXTRONICS : Asia Pacific HQ in Singapore Global in 30 countries, 4 continents Electronic Manufactures Service (EMS) Clients: Dell, Microsoft, Motorolla, Palm, HP, Xerox and others Employees : About 7000 and more; locals and outsourced migrant workers

Structure of interviews Questionnaire agreed by WEED and Monitoring Sustainability of Globalisation (MSN) Incorporating ILO Co Labor Standards and Codes (EICC) 46 workers interviewed: 26 from Jabil and 20 from Flextronics with translators Nationality: Nepalese, Bangladesh, Indonesians, Cambodians, Burmese, and Vietnamese Interviews of workers: July 12th and 13th and July 23rd and 24th. At Dormitories and outside dormitories

Regular versus Irregular migrants Regular Worker Irregular Worker versus Agency unknown Licensed agency; Legal placement fee Passed relevant skills test Skills set unknown Medical examination completed No medical examination Approved employment contract No legal contract Unknown pre departure preparation Required pre departure completed

State migrant Policies Malaysia manages migrants from law and order and security perspective Policy measures; work permit, levy, bilateral agreements, memorandum of understanding (MOU) Policy measures needed to monitor and eliminate irregular migration; Biometric security system Detention camps Punishment of whipping Amnesty Special security operations

State migrant Policies Policy instruments Legal Instruments Immigration Act 1959/ 1963: Controls related entry and departure Immigration Regulations 1963 Sect 9(3): Work permit only valid in particular employment; not transferable Employment Act 1955: Apply equal employment opportunity to all workers. Passport Act 1966 Mandatory medical examination Sect 8(3) of the Immigration Act Mandatory medical examination which includes HIV, Hepatitis and pregnancy at selected entry points Yearly pregnancy test required Immigration Act 1959/1963: controls related entry & departure; Entry permit and Work permit Immigration Regulation: Sect 9(3) Immigration Regulation and Employment (Restriction); work permit only valid in the particular employment Work permit is not transferable. Employment Act 1955: Apply equal employment opportunity to all workers. However, in practice, Malaysian law treats migrants workers differently Passport Act

Field studies Key findings Passport withholdings/ Incidents of bonded labor Non payment of wages and/or illegal deductions/ withholdings Contract substitution/ Breach of contract Exorbitant recruitment/ Placement fee Unsafe and poor living and working conditions Lack of redress mechanisms/ No right to association

Physical and verbal harassment Higher medical expenses Threat of imprisonment and forcible deportation from labor brokers Lack of pre departure/ skills training No effective monitoring system for labor brokers Lack of protection under national law

Case studies “Om, 20 years, Nepal, we paid RM170 for accommodation deposit and we were asked to sleep at the dormitory corridors for nearly a week” (worker outsourced to Jabil) Abdul 19, Bangladesh, I was verbally abused, slapped and threatened to be deported because my wages were not paid (4 months) by the labor agent…” (worker outsourced to Flextronics “We had to prostitute ourselves to survive for two months because we did not have work…” (Female workers from Nepal)

Passport Withholding/ Incidents of bonded labor Workers are forced to sign a blank form/ consent form Deposit required to return passport to the holder (RM500 to RM 3000; USD 166 to USD 1000) Non payment of wages and/or illegal deductions/ withholdings Late payment Non payment/ Higher Debt Discipline wages Utilities deduction Accommodation deduction Forced savings deductions Contract substitution/ Breach of contract Terms and conditions of receiving and sending countries differ Contract written in English- A language most migrants do not understand/ speak

Exorbitant recruitment/ placement fee Above legal limit Anywhere between RM2400 to RM 10000(USD 800 to USD 3400 approx.); depending on nationality Unsafe and poor living and working conditions About 500-600 sq ft., 12 to 15 people occupy One bath, one toilet No mattresses, no fan Health and safety hazards - electrical wiring etc. Lack of redress mechanisms The laws of the country do not provide for special complaint or redress mechanisms Increasing headcounts of workers instead or rights protection Sending country more interested in incoming remittances

No right to association The contract prohibits any association/ to join trade union in Malaysia Physical and verbal harassment By labor brokers At work (supervisors, local workers – language barrier) Higher medical expenses Workers have to bear expenses above amount stipulated in contract Threat of imprisonment and forcible deportation from labor brokers Police, RELA and labor brokers

Lack of pre departure/ skills training Inadequate training Misleading information Language barrier No effective monitoring system for labor brokers Poor enforcement in Malaysia Suppliers not managing labor brokers effectively Lack of protection under national law The lack of effective regulation and enforcement within the country Labor workers treated as commodities

Conclusion/ recommendation Government, MNCs, Stakeholders must hold recruiting agents/ outsourcing companies accountable for any violations of migrant workers. Adjust code of conduct to include protection for migrant workers Training and audit for suppliers Most importantly, to make purchasing decision based on ethical treatment of migrant workers