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Slap on the wrist for
Malaysian glove makers

Malaysia’s biggest export earners from the glove making and palm oil industries have had their goods blacklisted by the United States over the last two years in response to third-party complaints of human trafficking, exploitation and forced labor endured by migrant workers in plantations and factories across the Southeast Asian nation.
 
In response to a string of US Customs and Border Protection (CPB) bans, major medical glove makers have made unprecedented debt bondage repayments to tens of thousands of their current and former workers and undertaken reforms. But so-called Withhold Release Orders continue to remain active on six of the eight Malaysian companies sanctioned. 
 
Asia Times’ correspondent and Southeast Asia Insider editor Nile Bowie reported on the topic this week, interviewing both YTY Group, the latest company slapped by a US ban, and the labor activist who reported the firm to US authorities over forced labor indicators at their facilities. Bowie shared his views on the issue in this week’s Q&A. 
 
Why has the CPB moved much more aggressively against companies accused of using forced labor in recent years than previously?
 
There are several reasons. But an important one is the fact that the Barack Obama administration closed a legal loophole in 2016 that had allowed for the import of goods produced by forced or child labor. The so-called consumptive demand exception was part of a law dating back to the 1930s that had allowed goods, including those produced with forced labor, that are not produced in the United States to enter the US market in instances when domestic production could not meet consumer demand. That provision was repealed as part of much broader customs legislation that rights advocates at the time hailed as it allowed victims of forced labor and their advocates to press US customs officials to better enforce trade law. That is exactly what has happened in the years since. 
 
Prior to the repeal of the consumptive demand exception, CPB import bans were seen as being somewhat toothless. Under the more protectionist Donald Trump administration, import bans were increasingly and more powerfully applied by the CPB, which has no capacity to conduct on-the-ground investigations and relies on evidence of forced labor or lack thereof submitted by third-parties and auditors. 

Labor activists like Andy Hall, who I interviewed for my story, are admirably committed to improving conditions for workers, and nearly all of his complaints to the CPB have resulted in sanctions being implemented on companies – in some cases after considerable improvements have been made and issues seemingly rectified. Apart from activist pressure, there is also undoubtedly lobbying by US companies against foreign competitors accused of forced labor practices.  

Has the CPB established clear guidelines for companies getting their import bans lifted? 
 
The US Customs agency has told companies under WROs that persistent and consistent engagement to show that forced labor conditions have been remedied and verified by independent auditors is required to get the import bans reversed. To date, eight Malaysian companies have had their products barred from entering the US, but only two companies – Top Glove Corp and WRP Asia Pacific – have had the bans lifted. Labor activists say that while those firms did take measures to improve conditions, some argue that demand for medical gloves amid the Covid-19 pandemic led to a premature lifting of the WROs against them. 

The CBP’s acting executive director of trade remedy and law enforcement, Eric Choy, held a press conference on February 10 where he cited Top Glove, which was under a WRO for 14 months, as an example for blacklisted firms to emulate to have the bans against their products lifted. Malaysia’s Human Resources Minister Saravanan Murugan has also cited both of those companies as examples to follow. But remedying forced labor findings is not an overnight process, so industry experts believe newly blacklisted firms like YTY Group will be under import bans for at least several months. 
 
Is Malaysia’s government serious about ridding the country of forced labor conditions?
 
Many who have followed labor issues in Malaysia note that authorities have not been committed to remedying these problems in the past and have the impression that meaningful labor reforms aren’t possible in the present governance climate in Malaysia. Labor activists say that systemic corruption and abuses of power are the principal causes behind most of the forced labor in the country and the reason why credible allegations of labor trafficking are often not criminally pursued. 

Nonetheless, recent developments are encouraging. While companies in the gloves industry have made unprecedented payments to reimburse their workers for recruitment fees to ward off US sanctions or get import bans lifted, the government itself has for the first time introduced a National Action Plan on Forced Labor (NAPFL). Granted, there are indications that this framework isn’t as strong as it could be. But authorities are beginning to recognize that mounting allegations of forced labor violations pose a major risk to Malaysia’s export-reliant growth model, so I do expect that more remedial measures will be pursued going forward than was the case previously. But it all comes down to meaningful labor reform that dials up enforcement and significantly raises the costs for offenders, and that remains to be seen. 

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