Taking a Closer Look at Migrant Workers in Malaysia

June 9, 2016
  • Jaewon Kim

    Former Associate Director, BSR

As highlighted in the U.S. State Department’s most recent annual “Trafficking in Persons Report,” trafficking and related human rights violations continue to plague countries throughout the world. In the report, the State Department also made a controversial decision to move Malaysia from Tier 3 to Tier 2, citing the country’s efforts to eliminate human trafficking. Malaysia’s Tier 2 “promotion” brings attention to the fact that despite progress, significant trafficking issues still occur there, particularly in migrant worker communities. Since many businesses have suppliers who operate in Malaysia—especially those that source significant raw materials and labor from the region, such as the electronics; consumer products; and food, beverage, and agriculture industries—it is important for companies to take a deeper look inside their supply chains and the migrant workforce in them.

Due to political issues and lack of wealth and opportunities in their home countries, people migrate to Malaysia to earn a living and provide for their families back home. However, lack of accountability in the recruitment and hiring processes and an absence of support for workers leads to poor working conditions, to exploitative and forced labor and other infringements on human rights, and to companies not knowing who they are actually hiring.

While these issues occur at the local level with recruiters and employers, companies whose suppliers operate in the Malaysia region can take the lead and help create more transparency and accountability in their supply chains. In order to make the greatest impact, they need to look at the entire process, from when migrant workers first read their job descriptions, to when they’re on the job, to when they return home. By shedding more light on the nebulous areas where migrant workers might be exploited, businesses not only benefit workers, they also create business value.

Companies should take a closer look into and offer support for:

  • Recruitment. One of the major impediments to migrant workers’ prosperity is recruitment fees, which put them at a disadvantage from the very beginning. They often pay exorbitant fees just to get placed into jobs, and are in massive debt upon arrival. One set of guidelines for how to improve the process is the Electronic Industry Citizenship Coalition’s Code of Conduct, which is a set of standards on social, environmental, and ethical issues in the electronics supply chain, and states that “workers shall not be required to pay employers’ or agents’ recruitment fees.”
  • Working and living conditions. Migrant workers, especially those working for second-tier suppliers, often suffer in poor working conditions, contributing long hours for low pay. And even if their working conditions are acceptable, many of them live in substandard housing conditions and lack electricity, running water, and food.
  • Communication. Most migrant workers face language barriers, and, therefore, are unable to understand and communicate on issues related to health and safety, equipment operation, and personal wellness, among others.
  • Post-employment process. In many cases, migrant workers are unable to pay their debts and can’t return to their home countries during or after their contract. Businesses can take a deeper look at the terms of employment contracts, and what happens after a contract terminates, and offer support for migration costs.

BSR works with companies whose suppliers operate in the Malaysia region—and in surrounding areas—to take a closer look at their supply chains where migrant workers are present and make improvements. We help companies through:

  • Site-level assessments. BSR helps businesses conduct field studies and issue mapping to identify relevant issues in their supply chains. Most recently, we worked with NESTE to assess social risk related to migrant workers on palm oil plantations in its supply chain.
  • Recommendations. As part of the onsite assessments, we help companies identify where they need to take a closer look—be it the recruitment process, compensation, working conditions, or health and wellness. We identify what questions they need to ask and then make recommendations for improving the management of migrant workers in their supply chains.
  • Communication and engagement. We help workers understand their rights, the parameters of their jobs, and the rules they have to follow for working in Malaysia, and enhance communication on both ends—workers and middle management. We provide trainings to both workers and their managers on these issues to break language barriers, create two-way communication, and eliminate the lack of information.

Improving the quality of life of migrant workers means advancing the quality of your workers. If you have supply chain operations in regions where migrant worker issues are prevalent, particularly in Malaysia and other areas of Southeast Asia, BSR can help you identify areas of focus, create a stable workforce in your supply chain, and drive business value. 

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.

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