Widespread forced labor in Malaysia’s electronics industry

When it comes to forced labor, Nike is the unfortunate brand name that immediately comes to mind. Their unethical sweatshop practices were first highlighted back in 1991, when Press for Change activist Jeff Ballinger published a report that investigated Indonesia’s low wages and poor working conditions.

Today, Malaysia seems to be next in the firing line. In a report published by Verité, a nonprofit organization focused on labor issues, it was found that one in three workers in Malaysia’s IT manufacturing sector were working under conditions of forced labor.

The two-year study, which was funded by the US Department of Labor, surveyed 501 workers across 200 local companies. The sample included foreign workers from seven countries, as well as Malaysian nationals. The report concludes that “forced labor is present in the Malaysian electronics industry in more than isolated incidents, and can indeed be characterized as widespread”.

No turning back

According to the report, these workers are ‘forced’ to work in overwhelmingly demeaning conditions for a few reasons. They are first and foremost victims of deceptive recruitment:

Twenty-two percent of foreign workers were deceived about their wages, hours, overtime
requirements or pay, provisions regarding termination of employment, or the nature or degree
of difficulty or danger of their jobs.

In fact, the deception is so good that 92 percent of the foreign workers who were surveyed actually paid recruitment fees, which exceeded legal and industry standards equivalent to one month’s wage, in order to get their jobs:

Of workers reporting recruitment fees paid to employment agents in their home countries, 92 percent were excessive. Of respondents reporting fees paid to their employment agent in Malaysia, 99 percent reported excessive levels.

Worse still, 77 percent of these workers had to borrow in order to pay the fees which were levied on them. With a huge debt on their hands, most of them were forced to work, even through poor living conditions and overtime:

92 percent reported feeling compelled to work overtime hours to pay off their debt, and 85 percent felt it was impossible to leave their job before paying off their debt.

Add on the fact that most of their passports were held by the facility or their broker – with 71 percent of the sample claiming that it was impossible or difficult to get their passports back – and you have a case of widespread forced labor.

Global and local repercussions