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Malaysia’s labour abuse contentions a risk to transfer growth model

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Experts warn that unless Malaysia’s government and businesses address mounting allegations of workplace abuse of migrant workers who fuel the country’s economy, the country’s export-reliant growth model will be jeopardized.

Malaysia has relied on migrant workers to power its mainstay manufacturing and agriculture for decades, becoming an important part of the global supply chain for semiconductors, iPhone components, medical gloves, and palm oil.

However, as the reliance on foreign labor has grown, so has the number of complaints about abusive working and living conditions for workers, most of whom are from Indonesia, Bangladesh, and Nepal.

According to 11 analysts, rating agencies, researchers, corporate consultants, and activists interviewed by Reuters, Southeast Asia’s third-largest economy needs to reform its labor laws and improve enforcement, while businesses should invest to ensure better working conditions.

Seven Malaysian companies, including the world’s largest glove maker and palm oil producer, have faced import bans from the United States in the last two years due to allegations of forced labor.

Dyson Ltd, a high- tech home appliance manufacturer, severed ties with its largest supplier, a Malaysian firm, last month over labor conditions. “It is a wakeup call,” said Anthony Dass, head of AmBank Research in Kuala Lumpur.

“If Malaysia does not change and with the global focus on environmental, social and governance practices, businesses could move to other countries.”

Story by : Norvisi Mawunyegah