PETALING JAYA: Rubber glove maker Top Glove, which has in recent years suffered a reputational crisis, has a strong incentive to convince outsiders it is committed to employee welfare and business ethics.
Until the Covid-19 pandemic, the group had led an industry that produced up to two-thirds of the world’s rubber gloves. Top Glove alone claims a 26% market share.
However, soaring demand for personal protective equipment also drew international attention to the sector. Top Glove was hit with allegations of forced labour in its factories, leading to a US ban on its products. Similar bans have since been placed on three other groups.
Britain’s National Health Service (NHS) last year made a commitment to procure gloves only from companies that had been independently audited for labour abuses, following a legal challenge against the decision to add Malaysian glove maker Supermax to the NHS supplier list.
Concerns about forced labour are not unique to the Malaysian glove-making industry. But the sector has faced one of the most notable regulatory crackdowns in Asia since manufacturing shifted eastward.
As western policymakers tighten scrutiny of global supply chains, its struggles could be an indicator of the trouble to come for other industries.
“It’s nothing specific to gloves. (Other) intensive industries with migrant workers have the same (problems),” Andy Hall, a labour rights campaigner in Asia, told the Financial Times.
“But until they are under pressure, nothing changes.”
Dodgy dormitories
The controversy surrounding Malaysia’s glove-making industry has centred on the dormitories and factories where many workers, typically poor migrants from across Asia, live and work.
At one Top Glove dormitory, about a 30-minute drive from its headquarters, the control that the company exerts over its workers remained clear.
Surrounded by a 3m-high wall lined with barbed wire and security cameras, a three-storey complex housed scores of migrant workers in dingily lit rooms.
In Top Glove factories and facilities like this, an independent report in 2020 identified as many as 10 indicators of forced labour, as defined by the International Labour Organization.
Wages and identity documents of workers had been withheld and 8% of the 331 workers interviewed alleged they had suffered abuse. Some 93% said they had paid fees to secure a job, leaving many in debt bondage.
Top Glove needs to do more
Top Glove has declared each of these problems resolved, citing an independent assessment that confirmed forced labour was no longer a systemic issue in its direct operations and more than US$36 million (RM158.6 million) had been paid to workers to refund their recruitment fees.
The US ban on its products was lifted in 2021. But people who have worked closely with Top Glove suggest it will have to go further to live up to its claim to be a “leading employer”.
“It was clear Top Glove didn’t want to go any further than the minimum (to get off the US sanctions list),” said Hall, who said he was appointed to a Top Glove governance committee as an adviser.
He argued that the company had a responsibility to compensate workers for labour abuses as well.
Puvan Selvanathan, a former UN human rights adviser, said Top Glove convened in 2021 a “working group” of experts from seven non-governmental organisations, which advised the company on complying with labour regulations and other issues.
But he said the engagement ended without the company adopting its two key suggestions: to conduct a human rights due diligence assessment and to carry out a comprehensive survey of workers’ experiences.
“Is Top Glove ready for (stricter legislation on labour rights)? I would have to say no,” he told the Financial Times.
“Unless you have learnt how to make your management system more robust to recognise these symptoms in the future, (problems could happen again).”
Top Glove pushes back
Top Glove has pushed back against suggestions it is still falling short on governance standards. It told the Financial Times it had been recognised as a leading employer through various awards and ESG leaderboards, including S&P Global’s “Sustainability Yearbook 2022”.
It said the governance committee had served its purpose of remediating recruitment fees and that the company had implemented “some good feedback” that it received from conversations with other groups.
Top Glove said “endeavours towards improving employee engagement and welfare are an ongoing effort”. It added that barbed wire and security personnel “are common security measures used even in private housing areas in Malaysia”.
Besides questions over corporate responsibility, Top Glove and many of its peers face immediate financial pressures, as demand plunges in the wake of the pandemic.
Customers have built up huge stocks of unused gloves during the health crisis, depressing prices further. In the three months to last August, Top Glove said sales had more than halved over the previous year to US$990 million (RM4.36 billion).
Malaysian glove makers are also warning of intensifying competition from rivals in countries such as China and Thailand, while the shares of Top Glove, Supermax and their peers have been on the slide.
Top Glove’s MD, Lim Cheong Guan, has acknowledged that the industry was facing “challenging times”. The group’s expansion plans have been deferred, he said, adding that some struggling factories would have to close. - FMT
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.