KUALA LUMPUR, May 19 (Reuters) – In December 2020, as coronavirus infections spread rapidly through factories and worker dormitories in Malaysia, officials raided latex glove maker Brightway Holdings near Kuala Lumpur. They said they found workers living in shipping containers, in conditions so squalid that Human Resources Minister Mr Saravanan later compared them to “modern slavery”.
Nineteen months earlier, inspectors from a social audit firm – private contractors who help companies monitor environmental, social and other ethical standards in industries ranging from toys to palm oil – had visited the same three facilities. In three reports of more than 350 pages, they had detailed 61 violations of global ethical standards and ticked boxes for 50 violations of Malaysian labor laws.
Even so, the executive summary of each report concluded, “There is no forced, bonded, or involuntary hired prison labor at this facility.”
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Brightway’s customers include some of the world’s largest suppliers of personal care and protective equipment. The company’s chief executive, G. Baskaran, shared the 2019 and 2020 audit reports with Reuters in April, saying they show “we do not practice any form of forced labor or modern slavery.”
These contrasting findings highlight little-known flaws in global efforts to monitor working conditions. Social audits – independent reports used by global brands to verify that their suppliers meet ethical standards – are not always effective in identifying work-related risks, and may even mask them, more than two dozen workers told Reuters. auditors, watchdogs, factory workers and labor rights groups. .
Laws around the world prohibit the use of forced labor, but there are no rules governing the quality of audits, which are voluntary, auditing firms told Reuters. Auditors are usually paid by the companies they audit, which raises potential conflicts of interest if inspectors feel compelled to give positive reports to keep their business. Beyond that, Brightway inspectors and workers told Reuters that companies can manipulate what auditors see on-site.
There is no evidence of impropriety on the part of Brightway’s auditor, UK-based Intertek Group (ITRK.L), which declined to comment on Brightway. Intertek said its audits meet strict operating procedures with rigorous standards and are themselves subject to regular and thorough independent audits. He didn’t say by whom.
Neither Saravanan, the Malaysian cabinet minister who criticized Brightway on national television, nor his ministry responded to requests for further comment.
About a month after the raids in Malaysia, US Customs and Border Protection opened investigations into Brightway. US Customs is investigating allegations of forced labor, including debt bondage, excessive overtime and poor quality housing, according to a letter the agency sent to Nepal-based independent workers’ rights activist Andy Hall after drawing the agency’s attention to the details of the audit report. Reuters reviewed a copy of the letter.
In response, Brightway said US Customs did not request any details from the company.
US Customs said it does not comment if it investigates specific entities. The companies he examines submit audit reports during this process, and some reports he has seen have been “insufficient”, a customs official told Reuters.
“Many companies are unwilling to get a candid assessment of their vulnerabilities to forced labor because of the implications it can have on their reputation, profitability and shareholders,” said Ana Hinojosa, executive director of CBP’s trade office, which forced labor investigation. labor allegations.
Two other social auditors who reviewed the Brightway reports for Reuters said some of the findings could point to forced labor as defined by the International Labor Organization, which has set out 11 indicators indicating “the possible existence of a case of forced labor”. The relevant findings of the Brightway reports were: excessive working hours, high recruitment fees paid by workers to agents, and unsafe living and working conditions.
Labor activist Hall said the conclusions of Brightway’s reports were “completely misleading” because they ignored the evidence in the reports themselves. Clients who only read executive summaries would miss such evidence, he said.
WHAT THE AUDITOR SAW
Malaysia is a manufacturing hub for everything from palm oil to iPhone components. Companies there employ migrants from countries like Bangladesh and Nepal and have faced the most U.S. sanctions over allegations of forced labor after China. In the past two years, US Customs excluded purchases from four Malaysian companies after finding what they called reasonable evidence of forced labor.
The Brightway raid came as the United States banned another glove maker, Top Glove (TPGC.KL), over allegations of forced labor. Top Glove said in April it had resolved the issues that led to the ban, but sanctions remain in place and US authorities seized two shipments of gloves from the company this month.
At the time of the Brightway raid, Malaysian authorities were inspecting businesses across the country to try to ensure worker accommodation did not become a vector for COVID-19 infection and to avoid further allegations of abuse. of workers.
As part of efforts to have the bans revoked, Malaysian companies gave workers millions of dollars to reimburse recruitment fees that workers paid to intermediaries. These fees can be onerous and force workers into debt.
In the Brightway case, recruitment fees were among the issues that inspectors highlighted in the body of the reports. The 78 workers interviewed at the three facilities told inspectors they had paid recruitment fees of up to $4,200 each to officers.
Other points noted by inspectors include a dormitory in the same compound as the factory and a dormitory with no beds or mattresses; different signatures on the passports of some workers than on their employment contracts; and people working up to 15 hours a day.
Malaysia’s constitution prohibits forced labor, and the country has several laws that address safety, housing, working hours, and other worker rights. Brightway now faces a total of 30 charges for breaching a minimum housing and amenities standards law, the Malaysian Labor Department said in December.
Brightway has not commented on these accusations. Asked about authorities’ claim that the workers were living in shipping containers, Brightway’s Baskaran told Reuters that government inspectors were wrong: the workers’ quarters were covered with metal decking, which would have could be misinterpreted as containers, he said.
Brightway says it is not responsible for alleged violations such as recruiters charging hiring fees or imposing long hours because it does not charge fees and overtime was in accordance with Malaysian laws. He said his dorms were crowded, “purely due to the COVID situation”, as he had converted a warehouse into temporary accommodation.
After the December raid, Brightway paid its 2,719 workers 38 million ringgit ($9.21 million) to reimburse their recruitment costs, Baskaran said.
Asked about the findings of the audit on indicators of forced labour, he replied that “it depends on how you interpret forced labour”.
Brightway’s customers include Kimberly Clark (KMB.N) of the United States, whose brands include Kleenex and Andrex; Ansell, Australian supplier of personal protective equipment (ANN.AX); and the UK National Health Service. All declined to comment in detail on Intertek’s reports. Ansell told Reuters that the audits, when he inspected them, “unveiled several non-compliances with labor standards.”
Both Ansell and Kimberly-Clark said Brightway has fixed some of those issues since the government raid in December.
Kimberly-Clark spokesman Terry Balluck said the company was “highly aware of the real challenges of an effective audit”, but added that each audit identifies “a problem or an opportunity” and that audits continue to be an effective tool to protect workers at all levels.
Ansell said audits are a key tool that needs to be complemented by dialogue and communication with suppliers. The NHS has made inquiries to the UK Department of Health and Social Care. A spokesperson said “all of our suppliers must adhere to the highest legal and ethical standards or they may be barred from applying for future contracts.”
The International Labor Organization did not comment on Brightway’s audit, but said it was aware of doubts about the effectiveness of these private initiatives in protecting workers’ rights.
“There is also the question of what happens before and after the audits, and how the violations detected are dealt with,” the UN agency said in an email.
Five Brightway employees told Reuters they were told in advance by their supervisors of the planned audits. They said they were asked to clean their hostels in advance and only provide positive feedback about the company regarding their food, hostel facilities and passport access.
All five, speaking on condition of anonymity, said Brightway typically withholds workers’ passports but places them in their personal lockers on auditor visit days. Withholding of passports by an employer is considered an indicator of forced labor by the ILO.
Brightway’s Baskaran said workers can access their passports at any time in the lockers, to which they have the keys. Brightway does not prepare workers for the audit, but efforts are being made to clean up hostels, he said.
“During audits, like everything else, it’s normal to put in the extra effort to clean up the place, among other activities,” he said.
($1 = 4.1250 ringgit)
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Edited by Sara Ledwith
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