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After US Sanctions, Malaysia Migrant Workers Get Millions in Restitution from Glove Makers

FILE - Workers collect rubber gloves at Top Glove's factory in Klang, outside Kuala Lumpur.
FILE - Workers collect rubber gloves at Top Glove's factory in Klang, outside Kuala Lumpur.

Malaysian rubber glove makers have started paying back thousands of migrant workers for recruitment fees totaling tens of millions of dollars since the U.S. stopped importing from some of them late last year over forced labor claims.

Malaysia supplies nearly 2 in every 3 pairs of disposable rubber gloves used worldwide and has seen demand for the personal protective equipment soar amid the coronavirus pandemic. Most of the factories rely on an army of migrant workers, many of whom pay recruiters hundreds or thousands of dollars for the jobs and take on crippling loans to do so.

Labor advocates call it debt bondage, a prime example of modern-day slavery that can shackle workers to abusive employers for years while they pay off their debts.

In September 2019, U.S. Customs and Border Protection issued a "withhold release order" against Malaysia's WRP Asia Pacific over evidence of forced labor at its factories, blocking imports of its gloves into the U.S. The agency issued a similar order in July against two subsidiaries of Malaysia's Top Glove, the world’s largest rubber glove maker.

The U.S. Customs order against Top Glove cited debt bondage specifically.

Since the orders, both companies have launched efforts to reimburse their migrant workers for the recruitment fees they paid to land their jobs. Top Glove says it has been covering the full recruitment costs of new hires since January 2019. Since the U.S. started blocking its shipments, though, it has begun reimbursing migrant workers hired before 2019.

In recent months, at least three more of Malaysia's leading glove makers not facing U.S. sanctions — Hartalega, Kossan and YTY — have announced similarly sweeping payback schemes of their own.

The Malaysian Rubber Glove Manufactures Association, which represents the sector, said the companies have committed at least $61 million to the effort in all to address the U.S. forced labor claims. It did not say how many workers are due to be paid back, but Top Glove said in an August statement that it alone will be reimbursing more than 9,000.

Hartalega, Top Glove, YTY and the association all turned down VOA's requests for interviews. Kossan and WRP have not replied.

Fear factor

Labor rights advocates say the U.S. sanctions, and even just the fear of them, are helping push the glove makers to address one of the leading labor abuses plaguing the industry.

"These companies are doing it out of fear from sanctions," said Adrian Pereira, executive director of the North South Initiative, a local nongovernment group and a member of the Migrant Workers Right to Redress Coalition.

Having investigated labor abuses in the glove sector and others for many years, he added, "I personally don't think that these companies are doing it out of genuine care and concern for the migrant workers."

Andy Hall, another labor rights advocate, said the U.S. sanctions are "translating into real impact and real money into workers' pockets in remediation and remedy, which is really important."

One Top Glove worker, from Bangladesh, told VOA that his first monthly installment from the company's repayment program showed up on his August pay slip, sliding straight into his bank account. He said all Top Glove workers from Bangladesh have been promised 12 monthly installments totaling about $4,900, roughly what most of them paid recruiters to find them work in Malaysia.

The glove companies have shared few details about their reimbursement plans, but the payment pledges seem to match the average recruitment fees migrant workers from each country have paid, although some may have paid more or less. The Top Glove employee said coworkers from Nepal have been promised about $1,200, roughly what most of them claim to have paid recruiters themselves.

"Everyone [is] really happy getting this money," said the worker, an electrician, who spoke on condition of anonymity for fear of reprisal from the company for speaking to the media without permission.

Coming from Bangladesh, he said he poured all his savings into covering half the recruitment fee up front. He borrowed the rest and spent his first two years at Top Glove paying the loan off.

With the money now pouring back, he plans to spend it on a new, two-story house he and his brother are building back home for them and their parents.

"I feel really great about this. You know I [was] shocked when I heard that TG would pay us back," he said.

Real reform

Labor rights groups, though, say it's tough to judge just how much impact the U.S. import bans are having without more details on how and why the sanctions are being applied and lifted. U.S. Customs and Border Protection won't reveal the evidence of forced labor it uses to sanction companies. When the agency lifted the import ban on WRP in March, it said the company had cleaned up its labor practices but refused to provide specifics.

The U.S. law that makes the sanctions possible "really does have the potential to be one of the strongest pieces of law that can punish corporations or discourage them from profiting from forced labor in their supply chains," said Esmeralda Lopez, legal and policy director for the International Labor Rights Forum, based in Washington.

"But in terms of their effectiveness, we think that without increased transparency as to CBP's enforcement and how that's being done and how many times they are in fact stopping imports and ... the amount, the number, the financial impact, it's really difficult to assess," she added.

Asked about the critique, the agency told VOA it was barred by law from disclosing confidential business information and any other details that were "law enforcement sensitive" or could compromise current investigations.

Advocates also say that targeted U.S. import bans are far from enough to comprehensively address debt bondage in Malaysia, which may be hosting more than 3 million migrant workers, according to the World Bank, many of them undocumented. Each withholds release order can take a year or more of investigation and, by their nature, can only be applied to companies that export to the U.S.

Pereira said debt bondage remains rife in other sectors besides glove-making that also lean heavily on migrant workers, including garments and agriculture, and will only be rooted out among companies and recruiters with a degree of government oversight and enforcement that he believes is still lacking.

He said private-sector payback programs by companies facing or fearing U.S. sanctions were a help, but no substitute for thorough government-led reform.

"It's good," Pereira said, "but it's not a replacement."

The Malaysian Human Resources Ministry and its Labor Department did not reply to multiple requests for an interview.