BFM: The S in ESG in Malaysia is Sorely Lacking

On 13 May, the Malaysian government announced that the US through its Customs Border Protection (US CBP) has agreed to set up a joint working committee to address ht issue of forced labour in Malaysia. While a welcome piece of news, questions naturally arise on whether the committee will positively affect Malaysia’s labour challenges in a meaningful way. Segi Enam Adviser principal Khor Yu Leng was invited on BFM to discuss the matter: The S in ESG in Malaysia is Sorely Lacking

Following the announcement to setup a Malaysia-US working committee on labour issues, we ask Khor Yu Leng, Political Economist, Segi Enam Advisers whether this committee will help clean up Malaysia’s questionable reputation on labour practices?

Image credit: Shutterstock.com; produced by: Moh Heng Ying; presented by: Khoo Hsu Chuang, Tan Chen Li, Philip See

Malaysia Downgraded to Worst Ranking in Human Trafficking Report

Last Thursday, the US State Department released its annual Trafficking in Persons (TIP) Report 2021. The report evaluates a nation’s compliance with the standards as detailed in the Trafficking Victims Protection Act (TVPA) 2000.

Each country is then categorised into one of the four tiers: (1) Tier 1, nations whose governments fulfil the minimum standards under the TVPA 2000; (2) Tier 2, nations whose governments do not fulfil those minimum standards but are making significant efforts to do so; (3) Tier 2 Watch List, the same as Tier 2 but with either a significantly high/increasing number of estimated trafficking victims or a failure to provide evidence of increasing efforts to combat severe forms of human trafficking; (4) Tier 3, nations whose governments do not fulfil the minimum standards under the TVPA 2000 and are not putting significant effort to do so.

In the report, Malaysia has been downgraded from Tier 2 Watch List to Tier 3. One of the main reasons for the downgrade was that while the government has made some effort in 2020 to address trafficking issues raised that year, these efforts were ultimately hindered by, inter alia, the lack of cooperation between official agencies, inadequate avenues for victims to turn to for help, corruption, and the government’s continuous error of conflating human trafficking and migrant smuggling.

The Malaysian government has since responded to the report, promising to review recruitment fee agreements and levies as well as its memorandums of understanding with other countries to identify elements that would pose a risk of labour exploitation.

The downgrade has drawn justifiable concern from various parties, many of whom are calling the government to be more proactive. The Bar Council released a press statement detailing a list of proposals the government may undertake to combat human trafficking. The Human Rights Commissions (SUHAKAM) is urging the government to set up a Royal Commission of Inquiry (RCI) to implement the recommendations made in the TIP report. Even foreign agencies are taking special notice—the British High Commission recently called for project proposals to address the modern slavery problem in Malaysia. Response from the corporate sector suggests the sector is treating the report more cautiously, wary that its findings could have elements of a smear campaign.

Regardless, this downgrade may not come as a surprise to those who have been following the news on labour issues in Malaysia—in the past year alone, three Malaysian-based companies were issued Withhold Release Orders (WRO) by the US Customs and Border Protection (USCBP). These WROs, which prohibit the companies to import their goods into the States, were in response to allegations of forced labour, some of which were concerns raised by NGOs.

Forced Labour: Legislators Seek Tougher Action on Forced Labour

The heat on palm oil companies is turning up. In December 2020, the US House Ways and Means Committee asked the United States Customs and Border Protection whether it had considered a blanket ban on palm imports from Malaysia and Indonesia, citing the Associated Press investigative piece on widespread labour abuses, which include rape, child labour, and hazardous working environments, within the sector. While acknowledging the USCBP’s recent efforts in penalising companies suspected of using forced labour, the 25 legislators in a formal letter raised concerns about the limitations of imposing import bans in curbing forced labour problems as a whole, explaining that “these odious labor practices and their pervasive impact across supply chains highlight the need for an aggressive and effective enforcement strategy.”

It may be harder to allay lawmakers’ concern without clear data evidence from producer companies and countries about incidence rates and measured improvements. Segi Enam principal Khor Yu Leng pointed that while there is a Jakarta-based council set up to address the concerns linked to palm oil production, the council has yet to “show any muscle.” There is also an newly established ASEAN-EU ministerial-level Joint Working Group on Palm Oil, which seeks to address sustainability concerns associated with palm oil. With the first meeting just only held in late January 2021, its true effect on the industry remains to be seen.

Faith Leaders: Evangelicals, Trump, and the 2020 US Elections

Faith leaders and voters are storming heaven with prayers as the US presidential election remains inconclusive with several states having yet to tabulate all votes. Trump’s special advisor, Paula White-Cain, has been in the forefront leading prayers for the president in a video that has since gone viral.

Khor Report’s PolTracker has gathered social media data on key faith leaders in the US. Read our results here.

The Final Countdown: The Eve of the 2020 US Elections

It’s time for the 2020 US elections, and social media is again playing its huge part as it did four years ago. While the PolTracker team has extracted data on Twitter mentions and sentiments on the current Presidential and Vice Presidential candidates, being halfway across the world makes analysing said data a bit more difficult. Instead, we had the team give their personal thoughts. Click here to read more.

Coronavirus Impact on Food and Markets via Migrant Workers?

New developments amid Malaysia’s Covid-19 recovery phase: several markets in Kuala Lumpur and Selangor areas—namely the Selayang Wholesale Market, the Taman Megah wet market, the PJ Old Town wet market, and the Raja Bot market—have recently been temporarily closed down following reports of coronavirus infections. Interestingly, 10 foreign workers told to self-quarantine on 25 March after being found to have attended the Seri Petaling Mosque tabligh event were employed at the Selayang Wholesale Market. There are also rumours of uncertainties with regard to the testing results and SOPs for operating food markets.

The domino effect of market closures seems to have parallels with the meat packing plants in the US, where employees often work in close quarters under difficult environments; the infection rate around the plants were found to be 75% higher than that of other US counties. In an official statement dated 23 Apr 2020, the United Food and Commercial Workers (UFWC) International Union disclosed that 13 processing plants have closed in the past two months, impacting over 24,500 workers (one-third of the US meatpacking industry are immigrants) and resulting in a 10% and 25% reduction in beef and pork slaughter capacity. USDA data reflects this reduced capacity, showing a decline of 27% and 20% in beef and pork processing respectively compared to this time in 2019. Various problems abound for the industry, including farmers considering euthanizing their animals to avoid overcrowding.

Migrant worker populations may be a common theme here. In 2018, Khor Reports has previously analysed Malaysia’s structural reliance on foreign labour based on 2016 data, which showed that Sabah’s share of foreign labour was the highest in the country at about 37%, followed by Selangor at 11%. An update on the most recent data will be conducted in due course.

Returning to the Covid-19 situation, in the case of the Malaysian capital’s wholesale market, approximately 16,000 Pusat Bandar Utara residents have been placed under a two-week Enhanced Movement Control Order (EMCO) from 20 April, with around 90% of residents comprising foreigners. That being said, the Malaysian Health Director General reiterated that screening for foreign workers will be done on a targeted approach on high risk groups, and that screening for all six million workers is not possible.

Source: https://twitter.com/MelGohCNA/status/1254700504539488256

Interestingly, this latest statement on the number of foreign workers affirms our previous estimate of six million workers in 2018, which was derived from official and industry comments as seen in our report preview below.

A preview of our 2018 analysis report. Note our estimate of six million foreign workers, both documented and undocumented, in Malaysia at the bottom right.

The news has given rise to alarming hostility on social media against the Rohingya community—there were even online petitions urging the government to deport Rohingyas from Malaysia, with one purportedly garnering 200,000 signatures and was later removed after being reported as hate speech. The PN leadership has yet to address and reflect on their current policy regarding Myanmar refugees and the de facto open migrant policy.

While the virus problem has brought down air pollution (and may even be one of the drivers behind lower meat consumption), experts have warned that it could be only temporary, especially if no concerted efforts follow after the outbreak dies down. But the issue it has wrought for poor migrant communities may be longer lasting; integration and social cohesion have been identified to be potential issues in future thanks to the growing discrimination and scapegoat attempts—aggravated by misinformation and fake news—against these communities.