Earlier this month, it was reported that hundreds of Bangladeshi workers employed by the plastics manufacturing company were allegedly not paid for up to six months, were forced to work seven days a week, subjected to exorbitant recruitment fees, and were housed in overcrowded and unhygienic accommodation.
International non-profit organisation Business & Human Rights Resource Centre (BHRRC) then invited Sony, Panasonic and Daikin to confirm whether they still sourced components from Kawaguchi.
It also urged the companies to disclose any human rights due diligence that they had undertaken prior to entering into contracts with suppliers, and disclose the steps they had taken to investigate and remedy the violations reported.
In response, the three Japanese electronics firms all confirmed they sourced from Kawaguchi, adding that they were looking to find appropriate solutions to the issues raised by the workers. The responses were posted on BHRRC’s website today.
“Regarding the supplier, we will work with the relevant government authorities and organisations to conduct a thorough fact-checking investigation,” said the senior general manager of Sony Group Corporation’s sustainability department, Mitsu Shippee.
Shippee said it would then take appropriate measures in accordance with Sony’s supply chain code of conduct – which explicitly prohibits the use of forced labour or collection of recruitment fees in its facilities and supply chain.
“In the event that a supplier is confirmed to have committed a major violation of the code, Sony will take appropriate countermeasures, including requesting for the implementation of corrective actions and terminating business with the supplier.”
Tamotsu Namiki from Daikin Industries Ltd’s human rights promotion office said Daikin Malaysia is still purchasing from Kawaguchi and has not decided whether to terminate its contract with the company.
Namiki said Daikin Malaysia visited Kawaguchi’s premises twice this month to discuss the allegations with Kawaguchi, after which it received a written commitment from the company that it would pay its workers’ salaries based on a schedule.
“Daikin Industries Ltd and Daikin Malaysia have been continuously monitoring whether such commitments are being kept,” said Namiki.
“We will make serious efforts to improve the process of human rights due diligence… to ensure that human rights will be respected.”
In its response, Panasonic Holdings Corporation said it is investigating the issue and will consider taking necessary measures in cooperation with relevant Malaysian authorities and other stakeholders.
Panasonic said this includes requesting Kawaguchi to take “corrective action” to safeguard the interests of the impacted workers.
In a Malaysia Gazette report on Sept 9, Kawaguchi president George Wang assured 200 foreign workers and 40 local workers that their salary delays would be resolved by the end of the year.
Wang explained that the delay in salary payments was unavoidable due to a surge in orders from its two main clients, Panasonic and Daikin.
“We had to make advance payments to accommodate the unexpected surge in orders from major electronics players like Panasonic and Daikin. We had to inject significant funds to purchase raw materials to meet our customers’ orders,” he said.
Wang also said he had contacted the company’s customers to explain the rationale behind the temporary delay in paying the workers their salaries.
“They have accepted our explanation, and no immediate action is required from their side. Our business operations continue as usual,” Wang had said.