Malaysia Paying The Price For Labour Abuses

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Let’s be clear, Indonesia has stopped sending people to work in Malaysia because they are at risk of abuse here.
These risks range from low pay, dangerous working conditions and an absence of legal protection through to inhuman living conditions, denial of basic human rights and physical abuse. Even in cases where foreign workers die, those responsible regularly escape accountability.
The issues with the Indonesian workers reflect the determination of Indonesia to protect its people when Malaysian law does not. According to the Indonesian government, their attempt to change recruitment practices to reduce forced labour risks appears to have been ignored.
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The US downgraded Malaysia to the lowest Tier 3 level in its 2021 human trafficking report saying “the government of Malaysia does not fully meet the minimum standards for the elimination of trafficking and is not making significant efforts to do so”.
It added that “despite ongoing concerns that corruption facilitated trafficking, the government arrested and investigated, but did not prosecute or convict, officials who were allegedly complicit in trafficking-related crimes”.
The fact is that over many years conditions for foreign workers in Malaysia have deteriorated so much that foreign governments and international agencies are putting a stop to supply or banning products allegedly involving forced labour in Malaysia.
In fairness the Malaysian government has acknowledged these concerns but efforts by human resources minister M Saravanan to improve living conditions for workers during the pandemic for example caused significant push-back from errant employers who claimed they were not ready, able or willing to make the necessary changes.
In March this year Malaysia adopted the National Action Plan on Forced Labour (2021-2025) in collaboration with the International Labour Organisation (ILO) but already, in light of the Indonesia ban, it does not look credible.
This reflects an absence of enforceable law which will have wider repercussions because the rule of law is fundamental to a properly functioning economy.
The economic damage is not important compared to the harm caused by human rights abuses but it must be addressed.
In the short-term the shortage of workers will harm recovery and may cause closure of Malaysian companies. According to industry sources Malaysia is short of more than a million people across multiple key sectors including manufacturing, construction, plantations, chip-making and hotels, restaurants and tourism.
It will not be as easy as it sounds to source foreign workers from other countries in the numbers and with the skills that are required. To do it quickly given the urgency of demand will be even more challenging.
It is less attractive in economic terms to come to Malaysia as a foreign worker because salaries are poor, agency fees are high, legal protection is ineffective and opportunities at home are improving. In Indonesia for example mega-projects in their new capital city offer jobs, salaries and better protection for Indonesians living closer to their own homes and families.
More widely, the product bans on multiple Malaysian companies and the termination of supply agreements with multinationals, all due to forced labour issues, show how deep-rooted this problem is. At least two of the eight companies that faced product bans in the US and Canada are GLCs.
This adds to the perception that Malaysia has an antiquated labour system, an absence of the rule of law and an idea that it can ignore international stakeholder concerns. This is very damaging for the look and feel of the country and will close markets and scare investors away.
A full reform of the foreign worker framework is necessary to ensure that the Indonesia problem does not escalate and cause significant damage. Middlemen and forced labour risks must be removed and changes made to free up the market, allowing foreign workers to stay longer and move jobs between companies for example.
If Malaysia does not make the changes required for the international market it may lose those markets for good. - FMT
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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