Zuraida: Rubber firms sanctioned by US paid up to get on with business

Malaysian companies sanctioned by the United States Customs Border and Protection (CBP) only made remedial repayments to workers in order to get on with their business, said Plantation Industries and Commodities Minister Zuraida Kamaruddin.

Due to the CBP sanctions based on forced labour elements found in the production of goods, four companies in the rubber industry had recorded losses of more than RM1.8 billion, said Malaysian Rubber Glove Manufacturers’ Association (Margma) president S Supramaniam.

He said the losses incurred were mainly from logistics when goods were returned over a varying duration of six to 14 months between 2020 and 2022.

Speaking to the media after launching the Practical Guide for Malaysian Employers Addressing, Preventing, and Eliminating Forced Labour in the Rubber Industry in Malaysia, both Zuraida (above) and Supramaniam said the verification process of alleged forced labour before a company was banned was unfair.

“As far as we are concerned, the companies involved in the CBP sanctions are all clear of the charges actually.

“Because they (companies sanctioned) want to carry on with their business. They remediate and life can go on.

“We want them to make a proper verification process that is fair to us,” Zuraida said.

The minister said the lack of specifics provided by CBP made it hard for companies to rectify allegedly wrongful practices, if any, and that drastic action was sometimes taken based on a single complaint.

RM55 billion profits

Meanwhile, Supramaniam said most of the remediation payments went towards correcting allegations of recruitment fee deductions and overtime.

However, he said the industry earned up to RM55 billion in profits in 2021, at the height of the Covid-19 pandemic.

Malaysian Rubber Glove Manufacturers’ Association president S Supramaniam

He said the RM1.8 billion was about 5 or 6 percent of the profits and the US only represented 30 percent of their exports.

Having met with CBP officials in June, Supramaniam also agreed with Zuraida that there was no verification process.

He said Margma has 75 members, all of whom were asked to make remediation payments which amounted to a total of RM350 million to RM400 million since 2020.

Supramaniam said Margma had since clinched a quarterly dialogue session with CBP officials and a delegation would be going to Washington next January.

During their initial dialogue with CBP, the association had put forward their concerns which also included the uncertainty over the duration of which the CBP would impose the withhold release order, where goods are not permitted to enter the country.

“CBP has said that they are guided by the rules and regulations set by the US government, but Margma has made it clear that we needed things to be more transparent,” he said.

Explaining the losses incurred when goods were stopped at the US border, Supramaniam said: “Products came back to us and we had to export to other countries.”

He said four companies still had sanctions imposed against them and they were Supermax Glove Manufacturing, YTY Industries Holdings Sdn Bhd, Smart Glove, and Brightway Holdings Sdn Bhd.

A check with the CBP portal revealed that the list included Maxter Glove Manufacturing Sdn Bhd and Maxwell Glove manufacturing Berhad.

The portal also named Laglove (M) Sdn Bhd and Biopro (M) Sdn Bhd under the Brightway Group.

Companies named under the YTY Group were YTY Industries Sdn Bhd, Green Prospect Sdn Bhd and GP Lumut.

Under the oil palm industries, Sime Darby Plantation Berhad and FGV Holdings Berhad were also listed under the “active” status for the withhold release order.

Schools for migrant children

When asked how Malaysia would implement the recruitment fee to be borne by employers without a policy addressing the matter, Zuraida said the foreign worker centralised management system (FWCMS) ensures zero recruitment fee from the moment they enter the country, all paid by the employer.

Zuraida also announced that big industry players in the rubber and oil palm industry will look into setting up education centres for local and migrant children to attend.

“If their parents are working in plantations, their owners are responsible,” she explained.

The Practical Guide on eliminating forced labour that was launched today was a collaboration between the Malaysian Rubber Council and the International Labour Organization (ILO) through the support of the European Union.

ILO deputy regional director for Asia and Pacific Panudda Boonpala said by investing in a decent workplace and enabling an environment for sustainable enterprises, Malaysia had the unique opportunity to create better jobs, increase productivity and skills and support growth across the rubber glove supply chain. - Mkini