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A broad cross-section of Malaysian business, particularly in the service, construction, agriculture and manufacturing sectors, rely heavily on foreign labour. A vast migrant workforce fill workforce gaps in occupations requiring low- and mid-level skill as more educated Malaysians seek out higher-skilled work. This translates to about 2.1 million registered working age immigrants. Most are male and 39 percent come from Indonesia, followed by Nepal (29 percent) and Bangladesh (14 percent), as well as smaller groups from Myanmar, India and Vietnam. According to the annual Malaysia Economic Monitor: Immigrant Labour, the number of immigrants does not affect the local unemployment rate and labour force participation rates, but may in fact create local jobs. The report suggests that foreign labour contributes 1.1 percent net increase to the gross domestic product and creates employment for Malaysians. For every 10 new migrant workers in a sector in state, there are 5.2 additional Malaysians employed; with two of these Malaysian workers being women. With workforce gaps to be filled, a freeze in the intake of new foreign workers announced by the Malaysian Government two months ago is certainly a decision not welcome by the private sector. Companies involved in labour intensive sectors are struggling with the acute labour shortage following the recruitment freeze. In a survey by the Federation of Malaysian Manufacturers, 84 percent of manufacturers are facing manpower shortages. Despite the obvious economic value of the migrant workforce and pressures to reduce their numbers, numerous reports by NGOs and human rights observers suggest that companies are not placing adequate emphasis on respecting and protecting foreign workers. In fact, poor working conditions are adding to the pressures, e.g. when Indonesia imposed a ban on labour migration to Malaysia from 2009 to 2011 following human rights concerns, the availability of Indonesian workers dwindled and numbers were reduced from around two-thirds of foreign workers to the current 39 percent. The main complaints about the plight of foreign workers is the way in which common business practices are tantamount to bonded or forced labour. Workers are being forced to work for indeterminate period in order to pay off outstanding debt or wage advance, deception about the work, confiscation and withholding of identity papers or travel documents, limited freedom of movement and communication, and no freedom to resign in accordance with legal requirements. As part of a good business practice, companies can view forced labour as another business issue to solve. Here are some ethical business practices shared at a recent multi-industry forum on combating forced labour in global supply chains: Direct employment of foreign migrant workers. In 2014, Hewlett-Packard became the first IT company to require direct employment of foreign migrant workers in their supply chain through the HP Foreign Migrant Worker Standard. In addition to requiring direct employment, the standard reinforced the rights of workers to retain their passports and personal documentation and prohibited worker-paid recruitment fees. Earn trust first and hold two-way dialogue. Companies like Molex worked hard to earn the trust of the workers in order to learn the actual circumstances. Once trust is gained, the workers were willing to admit without fear of retribution on the extra fee they or their families had paid to the recruiting agent in their native country leading them to be in debt bondage. After learning this, the companies reimbursed the excessive fee to foreign workers and worked towards stringent labour supplier processes so that they had full control of the hiring of foreign workers where they were not charged any fees for recruitment or placement. Documents in labours’ native language. IKEA ensures its supplier Code of Conduct, IWAY Standard is central to their human rights approach and is made available in 31 languages. This is an important point that foreign workers should be provided with documentation such as written contracts in a language they understand, with all the terms and conditions explained clearly, and the worker’s agreement obtained without coercion. No retention of passports. Foreign workers should have free and complete access to their own identity papers or travel documents, and enjoy freedom of movement. Western Digital did not only return all passports to their workers in 2014 but also communicated and educated to their workers on the safekeeping of their passports as well as the channels they can go to in the event they lose their passports. Companies in Malaysia certainly need to double their efforts in ensuring the retention of their existing foreign labour pool. This ethical business practice should rightfully continue even if the Malaysian government decides to lift the ban on hiring new foreign workers, which will be a welcome decision by companies.
Keywords
Malaysia, construction, agriculture, foreign labour, migrant workforce, Myanmar, India, unemployment rate, labour force participation
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