While the bad conditions in electronics factories in China have received some attention – supplier names like Foxconn or Yonghong come to mind – Malaysia is another popular outsourcing location of the global electronics giants. How popular? SOMO has just published a new report called Outsourcing Labour by makeITfair on the working conditions of migrant workers in the Malaysian electronics industry. It states that the electronics sector now makes up 27% of Malaysia’s manufacturing output and 49% of its exports.
Malaysia has been quite successful in supplying global corporations with cheap labour. Differently from Chinese factories, which draw their labour force mainly from the domestic countryside, in Malaysia the hardest work is done by migrants from countries like Indonesia, Burma or Nepal. The report summarises interviews with workers at three electronics factories; implicated brand companies that source from these factories are stated as follows: Amtek, Denso, Hitachi, JVC, Mitsubishi, Panasonic, Samsung, SONY, Sharp, Toshiba and TOTO.
If working conditions in the factories are not great in general, the position of migrants is especially weak: They are legal in the country only because of their work contract; if they get fired, they are deported immediately. This vulnerability is exploited by their employers:
- Indirect employment: Workers are generally recruited through agencies, and frequently these agencies also act as their employers. This means that workers cannot join trade unions, as they are not employed by the factory, and their employing agency may also apply their own standards, make deductions from their wages, etc.
- Fraudulent promises: Workers generally receive much less pay than they were promised initially. Many workers signed a contract upon recruitment, but did not receive a copy and cannot prove what they were promised; their work contracts are usually in a language they cannot understand.
- Debt bondage: Workers generally have to take up a lot of debt in order to be able to move to Malaysia; outsourcing agencies generally also charge high fees. Since they receive much less pay than they were promised, it takes them several years to pay back these debts, which binds them to their employer.
- Intrusions into privacy: Workers need to undergo HIV and pregnancy tests, and women have to sign clauses that allow them to be fired if they get pregnant.
- No social benefits: Most of the workers have a very low health ensurance; if they take a sick leave, they will not get paid.
- Long working hours and mandatory overtime: The workers interviewed generally reported working twelve hours a day, six days a week.
- Dangerous working conditions: In some of the factories, the workers were exposed to toxic fumes.
While receiving less pay than their Malaysian colleagues, the migrant workers work longer hours and are treated worse. The report concludes that brand companies should specifically include migrants in their Corporate Social Responsibility guidelines and demand that their suppliers comply with labour rights.
The report also includes a nightmarish testimony of one worker where she and her newly-arrived colleagues were kept in a sort of shed for two months until a working place and hostel could be found for them. Later she is met with arbitrary pay deductions and being kept like a prisoner, sharing a bathroom with 10 people and working 12 hours a day.
Interestingly, two of the brand companies involved, which were contacted by SOMO, were not even aware that they were sourcing goods from the factories. This highlights how difficult it is for brand companies to control their supply chain: the factories were likely second-tier suppliers, delivering to another subcontractor. However, it is also clear that brand companies are not meeting the responsibility they have towards the people who do the work they derive their profits from. Companies like Samsung could detract a small share of their gigantic marketing budgets and purpose it towards auditing their supply chain.
Another interesting issue that we have seen similarly in China is that an estimated 70–80% of the migrant workers are women. The report says that they are perceived by the employers to be more docile and skillful. The production of electronics can thus also be seen as another chapter in the exploitation of women, specifically.