AMHERST, MA: A report from Verité, a human rights watchdog, says 32 percent of an estimated 350,000 migrant workers in Malaysia's electronics industry are working in conditions of forced labor.
Malaysia has become a major global manufacturing hub for the electrical and electronics industry with a large number of multinational companies from the USA, Japan, Europe, Taiwan and South Korea. Foreign investment last year totalled US$2.68 billion.
The sector is a key driver of the country's economy, contributing 32.8 percent of exports and 27.2 percent of employment in 2013.
"Verité's study is the most comprehensive look at forced labor in the Malaysian electronics sector to date," said Dan Viederman, CEO of Verité. "Our report provides a clear sense of the scope of the problem in the industry, as well as the root causes underlying this egregious form of abuse, which center on unlawful and unethical recruitment practices."
The report says the widespread reliance on third-party agents for the recruitment, management and employment of foreign workers limits their protections and blurs accountability for labor conditions.
Other factors include unlawful passport retention, high and hidden recruitment fees resulting in widespread indebtedness that can trap workers in their jobs, deceptive recruitment practices, highly constrained freedom of movement, poor living conditions, fines and other penalties that prevent workers from being able to resign, and inadequate legal protections.
"The problem of forced labor within the Malaysian electronics industry is complex, but many of the solutions are not," said Viederman. "Governments, companies and civil society alike need to increase transparency into the recruitment process for workers."
Verité says that with such widespread abuse, many electronics products reaching American consumers are produced using coerced workers.