Samsung and Panasonic accused over supply chain labour
abuses in Malaysia
Migrant
workers making goods for the global electronics brands claim they are trapped
and exploited in Malaysia
A man walks past a Samsung billboard at Kuala Lumpur
convention centre in Malaysia. Photograph: Ismail/NurPhoto/Alamy
Sunday 20 November
2016 22.00 ESTLast modified on Monday 21 November 2016 09.51 EST
Samsung and Panasonic,
two of the world’s leading electronics brands, are facing allegations that
workers in their supply chains are being duped, exploited and underpaid in
Malaysia.
The two companies have launched investigations
into allegations of abuse made by Nepalese workers after a Guardian
investigation raised multiple concerns about their treatment.
The men said they had been deceived about pay,
had their passports confiscated and had been told that they must pay large
fines if they wanted to return to Nepal before the end of their contract. They
also claimed they were forced to work for up to 14 hours on their feet without
adequate rest, and with restricted toilet breaks, in an attempt to settle
recruitment fees of up to £1,000 – they said they had to pay this money to
secure their jobs
They said they felt “cheated” and trapped in
their factory jobs making or assembling components for household electrical
goods sold on the global market.
“My heart is aching,” said one young man who
works in a factory making Samsung microwaves.
“I was not given the job I was promised. I am doing very difficult work. I
haven’t got the salary they said I would get.”
The Guardian spoke to 30 Nepalese migrants
making products for Samsung and Panasonic. Some of those working for Samsung are
employed directly by the company, but the majority are hired through a labour
supply company. The workers assembling or making parts for Panasonic are
employed by subcontracting companies.
Both Panasonic and Samsung forbid their
suppliers from confiscating passports or charging migrant workers recruitment
fees. Yet all the men interviewed by the Guardian claimed they paid up to
£1,000 to recruitment agents in Nepal to secure their jobs in Malaysia.
They all also claimed that their passports were confiscated on arrival in the
country, illegal under Malaysian employment law.
Workers said this restricts their freedom of
movement and leaves them open to detention by the authorities. Without their
passports, the workers said they couldn’t freely leave their jobs and return
home without paying fines equivalent to three or four months’ basic salary.
Both Samsung and Panasonic have said they are
opening investigations into the conduct of their suppliers following the
claims.
The use of labour supply companies and
subcontractors is common practice for foreign firms making goods for export in
Malaysia but is a system ripe for abuse, according to labour rights groups in
the country. Workers making Samsung products said they were threatened by
supervisors at their labour supply company when they said they were unhappy
with their work and wanted to return home. “They told us, ‘If you don’t work,
or leave without paying, we’ll bury you in Malaysia,’” said one man.
Workers for the labour supply company used by
Samsung also claimed they were deceived about the nature and conditions of
their work. They said they had been forced to pay illegal fees by recruitment
agents used by their labour supply company hours before they departed for their
new jobs. Some said the salary they were promised in Nepal was higher than the
pay they were now receiving in Malaysia.
“I wouldn’t have come here if I had known the
real conditions and salary. I was manipulated,” said one man.
“[The labour supply company in Nepal] are
using the name of Samsung to cheat people,” said another worker. “We have been
cheated, but we don’t want others to be cheated.”
Other Nepalese workers said they paid between
90,000-115,000 rupees (£685-£875) to a labour recruitment agency in Kathmandu
used by Samsung, despite a 2015 cap on recruitment fees set at 10,000 rupees (£75) by
the Nepalese government in 2015.
“I paid 115,000 rupees, but the agent only
gave me a receipt for 10,000 rupees. He told me that if I was stopped at the
airport I should say that that is all I paid,” said one man working at
Samsung’s microwave plant. “I knew the agent was cheating me, but what could I
do?”
A spokesperson from Samsung said: “As a
committed member of the Electronics Industry Citizenship Coalition (EICC), we
comply fully with the EICC’s Code of Conduct and have found no evidence of
violations in the hiring process of migrant workers hired directly by our
manufacturing facility in Malaysia. Once there is any complaint, we take swift
actions to investigate.
“We are currently conducting on-site
investigations of labour supply companies we work with in Malaysia and the
migrant employees hired by these companies. If any violations are uncovered, we
will make immediate corrective actions and moving forward we will suspend our
business with companies that are found to be in violation.”
In a factory in the capital, exhausted workers
making parts for Panasonic spoke of having to work week after week of 14-hour
shifts to try to repay the money they gave to recruitment agents in Nepal. Some
said they were still far off paying their debts 15 months after arriving in
Malaysia. Others claimed they had been told by their companies they must pay
the equivalent of three months’ wages if they left before the end of their
contract.
“If I could find a way to go back, I’d leave
right now but I am trapped by my debts,” said one Nepalese worker, who makes
parts for Panasonic. “95% of workers here would do the same.”
Workers assembling Panasonic products in the
southern city of Johor Bahru said that they sometimes only received 700 ringgit
(£133) a month – half of what they were promised – after production slowed due
to a lack of orders.
“We know our earnings are below minimum wage,
but what can we do about it?” said one of the workers. “We feel terrible
because we have a big loan to pay back. You have to work for three years just
to pay it off.”
Life beyond the assembly line is difficult
too. In accommodation visited by the Guardian, workers were living in a grim
hostel in an industrial area in Johor with 14 men crammed into one mouldy room.
They all shared one broken toilet and two shower cubicles, which opened
directly on to a cooking area with a single gas cooker.
In an emailed statement, Panasonic said,
“Panasonic will conduct a full investigation into the claims made by the
Guardian. We are taking these allegations very seriously and if, in fact, we
discover that one of our suppliers has violated such laws or regulations, we
will ensure and require them to take necessary corrective action immediately.
“We expect all of our suppliers to strictly
comply with our CSR [Corporate Social Responsibility] policy and declaration.
These expectations are outlined in Panasonic’s contracted terms and conditions
with each supplier. We do not tolerate breaches of these terms.”
The workers interviewed by the Guardian also
complained about conditions inside the factories.
“The work is extremely difficult,” said one
worker at a Samsung electronics plant making microwave ovens. “You get only 45
minutes in a 12-hour shift to eat, and seven minutes every two hours to drink
water.”
Other workers making parts and assembling
products for Panasonic said that they stood all day without decent breaks. One
worker claimed they were only allowed to stop work to go to the toilet twice in
a 12-hour shift.
The electronics sector in Malaysia, which
accounts for nearly 35% of the country’s export economy,
has faced international scrutiny for its treatment of migrant workers. In 2014 a
report by supply chain watchdog Verité found that nearly one
third of workers in Malaysia’s electronics sector are in forced labour, and
called for wide reforms of the policies of foreign companies operating there.
“Brands working in Malaysia have to recognise
that the standard operating procedure for labour contractors is debt bondage
and this has ramifications,” said Phil Robertson, deputy director of Human
Rights Watch in Asia.
“Taking someone from Nepal and putting them in
a factory in Malaysia costs money, and if these costs are not being factored
into the price of a phone, or a microwave or a speaker, then they are complicit
in a system that expects the workers to suffer as a result.”
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