PROCURE IT

Pathma KrishnanMonitoring 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

Passed relevant skills test

Medical examination completed

Approved employment

contract

Required pre departure completed

Regular Worker

Unknown pre departure

preparation

No legal contract

No medical examination

Skills set unknown

Agency unknownLicensed agency; Legal placement

fee

Irregular Workerversus

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

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

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 brokersPolice, 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 lawThe lack of effective regulation and

enforcement within the countryLabor 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