DoL reveals $5M fund to combat forced and child labour in Malaysia
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Palm oil plantation in Klias, Beaufort Sabah, Malaysia

The US Department of Labor has made $5m available in grant funding to combat forced and child labour abuses in Malaysia’s palm oil and garment industries.

The announcement follows the downgrading of the Southeast Asia nation to the lowest tier in the US State Department’s annual report on human trafficking released on 2 July.

Malaysia dropped to Tier 3 in the latest “Trafficking in Persons” report which cited the country’s conflation of human trafficking with migrant smuggling and a failure to pursue allegations of labour trafficking in the rubber manufacturing industry and palm oil sector.

“The sectors primarily where we see the greatest forced labour – which is the predominant form of the crime within Malaysia – includes on palm oil and agriculture plantations, in construction sites, in the electronics, garment, and rubber product industries,” the State Department's acting director of trafficking, Kari Johnstone, told reporters last week.

The world’s second-largest producer of palm oil, Malaysia exports much of it for use in US products including cookies, crackers, soap, and laundry detergent. The Malaysian government owns 33% of FGV Holdings Berhad, the third-largest palm oil company in the world, which along with Sime Darby Berhad has had its product blocked from entering the US due to concerns over labour violation.

It is reported that some palm oil plantation operators subject workers to a form of debt bondage – where recruiters use unfair schemes to trap people in a job that pairs high recruitment fees and low wages – and exploit child labour while exposing workers to toxic chemicals, and other risks, according to the US Labour Department.

Similarly, in Malaysia’s garment sector, migrant workers may work in abusive labour conditions and fall prey to deceptive recruiters who subject workers to debt bondage, illegal wage deductions, and substandard living conditions.

Recommendations for Malaysia from the State Department report include: increase efforts to identify trafficking victims among vulnerable populations; increase efforts to prosecute more trafficking cases as distinct from migrant smuggling; and make public the results of investigations involving corrupt officials to increase transparency and deterrence.

The expansion of labour protections for domestic workers; steps to eliminate recruitment fees charged to workers; the expansion of efforts to inform migrant workers of their rights and Malaysian labour laws; and enforcing the law prohibiting employers from retaining passports without employees’ consent were also recommended.

In response to the report, Malaysia’s human resources minister, M Saravanan, reportedly said his government would ramp up efforts to battle human trafficking, including prosecutions of companies involved in forced labour.

On 23 June, the Bureau of International Labor Affairs (ILAB) released its updated list of goods produced by child and forced labour as required under the Trafficking Victims Protection Reauthorization Act.

Migrant labourers from Bangladesh, India, Myanmar, and Nepal are forced to produce rubber gloves in more than 100 factories throughout Malaysia, according to ILAB’s latest findings.

Reports indicate there are an estimated 42,500 migrant workers employed in the Malaysian rubber glove industry. Many are subject to debt bondage and forced to work excessive overtime in factories where temperatures can reach dangerous levels.

Additionally, labourers work under the threat of penalties, which include the withholding of wages, restricted movement, and the withholding of their identification documents.

The US has already banned products from the world’s largest rubber glove maker, Top Glove, due to allegations of forced labour and other abuses.

Administered by the ILAB, the new $5m funding from the Labor Department aims to support Malaysian workers and civil society in their efforts to advocate for the elimination of forced and child labour in the country.

In a statement, the department said the project would strengthen the role of the worker voice in employer initiatives to prevent and redress labour abuses in their business operations and supply chains.