Supply chains are a highly complex web of business and trading relationships spread across numerous countries, drawing upon human and other resources that come from diverse regions with varying cultures, standards and government regulations.

Globalisation has delivered growth to many countries in Asia by increasing business and employment opportunities for companies, helping them access international markets while creating greater demand for foreign migrant workers. This has led to tremendous growth in the demand for the services of private recruitment agencies (PRAs) to meet the need for sourcing and managing workers who migrate for employment. Malaysia itself is a recipient of foreign migrant workers from 15 approved countries in
Southeast, Central and South Asia, leading to extremely intricate and complex recruitment pathways.

The complexity of recruitment and migration pathways have inevitably increased the vulnerability of migrant workers to potential exploitation; from paying exorbitant recruitment fees resulting in debt bondage to unlawful wage deductions, restrictions to their freedom of movement through the retention of their passports and appalling living conditions. According to United Nations agencies, these are some of the indicators that contribute to the exploitation of 25 million victims of forced labor globally, of which one-fourth are foreign migrant workers.

Due to the COVID-19 pandemic, some factories were forced to shut their operations temporarily while others had to intensify production to meet unprecedented demands for essential products.

The pandemic provided additional insights into improvements that can be made during the recruitment and employment stages of a worker’s journey, particularly for vulnerable migrant workers. Due to the COVID-19 pandemic, some factories were forced to shut their operations temporarily while others had to intensify production to meet unprecedented demands for essential products. At the same time, a number of media stories highlighted how workers had been negatively affected by the pandemic, in particular in the medical supplies and palm oil industries.

However, these challenges do not mean that there have not been positive developments. In the last 3 years, the Malaysian government indicated its interest in addressing these concerns via the development of two national action plans; 1) Business and Human Rights and 2) Forced Labor, in addition to one on Anti-Trafficking in Person which was launched in 2010. These have all benefited from a series of consultations with different stakeholders that have led to renewed efforts to combat forced labour and trafficking in persons. The private sector is a key ally in this fight.

Fair recruitment is ensuring that employers respect human rights when recruiting employees and workers across their supply chain, without any form of exploitation.

Here are some examples of fair recruitment practices:

1. Each job is accompanied by a job advertisement which is posted, accurate, and complete;
2. Workers are being interviewed and selected based on their qualification and skills for the job, without being subjected to any forms of discrimination;
3. Employment contracts are in line with applicable laws and regulations;
4. Employment contract should be in a language understood by the worker;
5. The content of workers' employment contract is explained to them verbally and in their native language prior to signing;
6. Employment contract should be issued and signed at least five days before worker departs to the country of destination;
7. Ensure workers attend a pre-departure orientation (PDO) prior to worker's departure;
8. Any amendments to contracts after arrival in the host country meet local law, provide equal or better terms of employment, and are explained to migrant workers and signed with their full and free consent.

The Responsible Business Alliance (RBA) and its partners, through various programs implemented under its Responsible Labor Initiative (RLI), have identified four common causes of unfair recruitment:

Many workers migrate without information and knowledge about their jobs, employers and countries of destination, creating the potential for exploitation by recruitment agencies. For example, they are subject to deceptive contractual terms whereby the actual job, wage or working hours do not match the reality offered during the recruitment phase.

Workers are often subjected to exorbitant recruitment fees that may lead them into debt bondage. Sometimes they are also subject to the holding of collaterals such as jewellery, livestock and property in lieu of recruitment fees.

Entrenched negative and discriminatory attitudes toward migrant workers reinforce their vulnerability to exploitation by recruitment agencies and employers

Limited access to grievance channels and remedy exacerbates their conditions when they arrive in Malaysia.

In Malaysia, workers’ rights are predominantly governed by these national laws, among others:

1. Employment Act 1955
2. Private Employment Agencies (Amendment) Act 2017
3. Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990
4. Industrial Relations Act 1967
5. Trade Union Act 1959
6. Children and Young Person’s (Employment) Act 1966
7. Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007

At an international level, Malaysia is obliged to abolish forced labour through its ratification of the ILO Convention on Forced Labor (also known as Convention no. 29). At the same time, there is also a moral imperative to uphold other non-binding international standards, such as the United Nations Guiding Principles on Business and Human Rights and the UN Sustainable Development Goals, to ensure the rights and dignity of workers are not being compromised while doing business.

Lastly, due to globalization, companies that manufacture and supply products to international buyers will have to comply with the labour laws of those countries. For example, under the U.S.’s Federal Acquisition Regulation, goods produced by forced labour are prohibited from entering the country. There are many other countries such as the United Kingdom, Australia, France, Germany and Norway that are already or on their way to implementing similar regulations. Most recently, the President of the European Commission, in a policy speech at the European Parliament, formally confirmed that the European Commission will propose an EU import ban on forced labour.

There are several things employers can do:

1. Get educated on forced labour and its implications on workers and your business.
2. Map and understand your workers’ journeys. For example, the criteria for recruiting foreign migrant workers should not be limited to their skills and the cost of their recruitment fees, but also understand the risk of forced labour associated with their journeys from home to the point of arrival in Malaysia.
3. Conduct due diligence on your recruitment partners by ensuring they are licensed and enforcing contractual obligations to comply with fair recruitment practices, including the principle that workers should not pay any recruitment fees. Verification of compliance should be done regularly.
4. Engage with your workers regularly by raising their awareness of labour rights and also receiving feedback from them on their employment experiences.
5. Engage with other stakeholders such as industry associations, government, and civil society organizations to keep abreast of local and global labour policies, learn best practices from industry peers and work on solutions to recruitment challenges together.

The COVID-19 pandemic has indeed presented the business community with unprecedented challenges. It has further exposed risks to workers and it is imperative to review and evaluate opportunities for change and institute corrective actions when needed. Some actions may be implemented over time, but others such as identifying workers at risk of debt bondage, conducting due diligence on your recruitment partners, and providing an effective grievance mechanism for workers are more urgent and require immediate attention.

Footnotes :

1. ILO, Global Estimates of Modern Slavery. 2017
2. ILO, TRIANGLE in ASEAN Quarterly Briefing Note. 2021
3. ILO, TRIANGLE in ASEAN Quarterly Briefing Note. 2021
4. LSE, The Economic Case against the Marginalisation of Migrant Workers in Malaysia. 2020
5. https://globalnaps.org/country/malaysia/
6. Baker McKenzie, Proposed EU Forced Labour Import Ban. 2021

The Author:

Responsible Business Alliance (RBA)