McDonald’s, Panasonic Respond to Allegations of Workplace Abuses in Malaysia

Shuman Vasu
Kuala Lumpur
161208-MY-migrants-620.jpg A Nepalese man who works 12 hours a day at an electronics factory in Malaysia shows his hands during an interview in Telok Panglima Garang, near Kuala Lumpur, Nov. 11, 2014.

Malaysian affiliates of multinational firms McDonald’s and Panasonic said they are working to address allegations of exploitation of foreign workers similar to those made in a British newspaper’s investigative reports.

Spokespersons for the local branches of the hamburger chain and the electronics giant told BenarNews they had taken action toward recruitment companies, which supply them with manpower, to ensure that migrants are not exploited.

The managing director of Golden Arches Restaurants Sdn Berhad, the Malaysian affiliate of McDonald’s, said it had terminated its contract with a recruitment firm named in one of the articles published last month by The Guardian.

“After several failed attempts to solve such issues with Human Connection HR, McDonald’s decided to end its dealings with the manpower supply company several months ago,” Azmir Jaafar told BenarNews, adding that Golden Arches would cooperate fully with any government investigations into alleged labor abuses.

One of the articles in The Guardian alleged that Nepalese migrants who work for McDonald’s outlets in Malaysia were paid as little as 75 U.S. cents an hour and were “cheated out of months of salary.” Efforts by BenarNews to contact representatives of Human Connection HR and other recruitment firms were unsuccessful.

Malaysia’s workforce counts 2 million undocumented workers who come from Bangladesh, Indonesia, Nepal and other countries.

Among them, there are about 700,000 Nepali workers who are mostly employed on plantations and factories and who send home a total of 5 billion ringgit (U.S. $1.1 billion) in remittances each year – about 40 percent of Nepal’s overall remittance sector – according to an official at Nepal’s embassy in Kuala Lumpur.

Similar allegations of abuses in supply chains against the Malaysian affiliates of Panasonic and Samsung were made by Nepalese migrants in a separate Guardian article on Malaysia’s electronics industry – a huge sector of the national economy. Sources cited in the Nov. 20 article complained that they were working 14-hour days, had been deceived about their salaries and had their passports confiscated.

“We have also, at times, spoken to the companies involved but the problems keep happening. We would like the Malaysian government to intervene to put a stop to such violations,” the Nepal Embassy official told BenarNews. “The government should immediately summon companies named in the reports and ask for explanations.”

Samsung did not respond to inquiries from BenarNews, but a spokesman for Panasonic said it was investigating the allegations and had found that one of its labor-supply contractors had violated regulations. Panasonic has since ordered the contractor to take immediate corrective action, the spokesman said.

“We expect all of our suppliers to strictly comply with our CSR [Corporate Social Responsibility] policy and declaration. These expectations are outlined in Panasonic’s contracted terms and conditions with each supplier. We do not tolerate breaches of these terms,” the spokesman told BenarNews via email.

‘It is rampant’

According to the chairman of a committee that deals with migrant and immigration issues at the Malaysian Bar Council, Malaysia lacks resources to strictly enforce labor laws in protecting workplace rights for foreign workers.

“There is definitely lax enforcement of the laws with respect to the rights of migrant workers in Malaysia. There is also endemic corruption with respect to the whole recruitment and employment of migrant workers at all levels,” committee chairman M. Ramachelvam told BenarNews.

“There is a need for more labor inspectors to conduct spot checks at work sites to ensure workers are not cheated – in terms of their pay and accommodation arrangements,” Adrian Pereira, executive director of the North South Initiative (NSI), a local rights and social justice NGO, told BenarNews.

Meanwhile, the Malaysian Trades Union Congress (MTUC) said it was urging the Ministry of Human Resources to investigate the allegations of exploitation of migrant workers.

“It is rampant but does not get highlighted since workers are not aware [about] how to [complain] and there are no specific avenues for them,” MTUC Secretary General J. Solomon told BenarNews.

A senior official from the Ministry of Human Resources said it had sent a query to the Labor Department about the allegations and was waiting for a response before it could act on the allegations.


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