From Andy Hall
The darker side to global supply chains was again well illustrated recently in slavery like conditions endured by hundreds of Bangladeshi migrant workers at Kawaguchi Manufacturing Sdn Bhd, a Malaysian supplier of plastic parts for TVs and air conditioners to Sony, Panasonic and Daikin.
Substantial remedy for these workers was eventually provided by the three Japanese consumer goods giants. But state, United Nations, private sector and civil society actors were unable to effectively detect, prevent, mitigate and remediate their suffering in a timely manner.
When 250 of Kawaguchi’s former workers staged a strike in August 2024 over months of unpaid wages, a lack of state and buyer oversight of this labour intensive, export oriented workplace was evident.
The situation was emblematic of systemic forced labour affecting millions of migrants globally.
Vulnerable people from poorer countries seek a better life in Malaysia utilising precarious, unregulated migration channels — and end up in modern slavery.
Allegations in this case were similar to those raised by migrant workers across Malaysia. Long working hours, low wages, unlawful deductions, unsanitary housing, harassment, wrongful dismissal, irregular immigration status, lack of access to healthcare and social security, limited freedom of movement and acute debt bondage from unethical and illicit recruitment processes.
This all violates Malaysian laws and international standards. Commitments to corporate social responsibility and ESG (environmental, social and governance) policies that global brands and their investors publicly endorse were unfulfilled.
Many companies build profitable brands through innovation and quality, yet neglect workers without which they couldn’t operate. Supply chain abuses are often uncovered not through proactive due diligence and monitoring by companies, but by activists or media investigations.
The failure of global brands to identify, prevent, address and remedy modern slavery risks in their suppliers factories results in worker abuse. It also means reputational damage for the brands involved and, if effective advocacy is undertaken also, some level of accountability.
Kawaguchi closed and its owners seemingly disappeared when Sony and Panasonic abruptly stopped buying its products after the abusive working and living conditions went public. Daikin followed suit.
Unable to afford food or support their families, workers became further indebted and destitute. Some suffered serious illness and accidents with no effective access to public healthcare.
Despite media coverage of the workers bravely protesting outside their locked-up factory gates with brand labels visible on banners, and my usual flurry of emails, their suffering was not addressed in a timely manner.
The cost of maintaining the workers was borne by me until Daikin took over to pay for food, a medical assessment and hospital costs for sick workers.
While corporate responsibility is essential in such situations, government oversight is equally important. The absence of any support from Malaysian and Bangladeshi officials to these workers was a serious omission.
UN agencies, international organisations, unions and civil society actors can also play an important role in crisis cases, but here they were missing in action.
A multi-stakeholder dialogue on the crisis eventually happened, facilitated by a UN business human rights expert. Sony, Panasonic and Daikin asked the Responsible Business Alliance (RBA) to give RM20,000 to each worker as a result.
It took five months for this money to reach all workers, despite a digital wallet facilitating timely transfers of funds once it was properly utilised. The inability of the RBA to deliver aid quickly exacerbated the crisis. A lack of clarity in eligibility criteria has left many departed former workers without any support until today.
Voluntary repatriation of over 30 workers to Bangladesh was difficult, owing to the workers’ irregular immigration status, but was eventually successful.
The relocation of workers who wanted to stay and work in Malaysia from unsanitary hostels was chaotic due to official bureaucracy and confusion. But eventually most workers secured better jobs and housing.
Workers expected Kawaguchi to provide RM3 million in unpaid wages following a negotiated labour tribunal agreement. Only RM253,000 has been paid so far and pro-bono lawyers to assist workers in enforcing their entitlement were not accessible.
UN agencies and civil society organisations turned down legal support requests. The Bar Council agreed to step in, but did not. Recently, workers hired a lawyer to represent them to try to claim back wages.
Whilst Daikin agreed to pay its share of workers’ compensation request in late 2024, Sony and Panasonic resisted and a complaint was filed with the Organisation for Economic Co-operation and Development (OECD) against them in Japan. Workers then retained a US lawyer who negotiated a substantial settlement with both companies.
There was much more accountability in financial terms for the brands involved here than is usual when rights violations occur in supply chains. But it’s regrettable this remediation took one year and was not more forthcoming.
More holistic approaches to corporate social responsibility in modern slavery cases like Kawaguchi, prioritising workers’ welfare, crisis assistance and timely remediation are essential.
Brands should implement worker driven social compliance audits to more effectively and proactively monitor their supply chains for abuses.
They should also encourage and contribute financially towards more responsible migrant worker recruitment, employment and living standards generally.
Governments should enforce labour laws more effectively and establish mechanisms to sustain vulnerable workers in crisis.
Timely consular assistance and support for workers to find new employment quickly to sustain and empower them should be prioritised by all state actors.
Responsible migrant recruitment processes should be more strongly promoted by governments to prevent debt bondage of migrants altogether.
UN actors, civil society and unions should ensure victims’ basic needs are met in crisis situations. Pro-bono legal support, shelters, healthcare and food should be accessible.
OECD complaint mechanisms also need to be more effective. The Japanese secretariat should be more proactive on complaints filed with it, calling upon relevant parties to have constructive and good-faith dialogue so lawsuits do not need to be threatened.
Forced labour and modern slavery are frequently detected in global supply chains in places like Malaysia, where systemic impunity and limited rule of law exists. So we all should learn lessons from the Kawaguchi case to do better for vulnerable workers next time.
Andy Hall is an independent migrant worker rights specialist.
The views expressed are those of the writer and do not necessarily reflect those of FMT.