Monday, April 25, 2011

Wikileaks - Malaysian Government Barely Helped On Forced Labor Case

Recently, Wikileaks has released three cables in regards to the F5 engine. Yesterday, another cable was released yesterday which points out to the Malaysian government's - alluding to human resources and SOSCO -  little assistance rendered in the forced labor case of a Finnish electronic company.

This case was dated back on 24 October 2008.

Summary: Finnish electronics company Polar Electro Group had to pay compensation and provided repatriation for its 40 Vietnamese workers based in the Penang plant when they eventually found out via complaints that their Malaysian partner in the join-venture had committed forced labor practices (withholding passport, paying wages lower than stipulated than contracts and restricting movement of workers) 


2. (SBU) Post, working in conjunction with the Finnish Embassy, was able to facilitate the compensation and 
repatriation of approximately 40 mostly Vietnamese workers from conditions of forced labor in a Penang electronics 
assembly factory.  Polar Electro Group, a Finnish electronics company, holds 60 percent share in Polar Twin Advance, the 
local Malaysian company operating Polar Electro's Malaysian factory in Penang.  Boat People SOS (BPSOS) informed us on 
July 1 that Vietnamese employed by Polar Twin Advance were allegedly working in conditions of forced labor.  Malaysian 
plant managers reportedly had paid the workers at rates far below those in their original contracts; confiscated workers' 
passports; and denied salaries and intimidated workers who complained.  Poloff informed the Finnish Embassy about the 
allegations, provided background information on labor trafficking, and offered suggestions on a course of action. 
As a result, the Finnish Ambassador personally contacted Polar Electro's CEO to brief him on the reports of forced 
labor.  Polar Electro took quick steps to address the situation, including sending an inspection team to the 
factory the following week.  However, the Malaysian joint-owner of the factory refused to allow the inspection 
team onto the factory's premises.  When Finnish executives eventually confronted Malaysian plant managers with the 
allegations of labor exploitation, the plant managers were both confounded and angered that the Finnish parent company 
would raise such issues. 

On 1 July 2008,  the US Embassy was notified of the alleged force labor by the Boat People SOS. The Finnish embassy was in turn notified about the series of events - which was then reported to the CEO of Polar Electro Group (Jorma Kallio). HQ sent an inspection to the Penang plant to investigate and suspicions confirmed when the team was refused entry by its join-venture partner. When Finnish executives confronted the Malaysian plant managers on the allegations of labour exploitation, the plant managers were confounded and angered that the Finnish parent company would raise such issues.

The workers were given legal counsel and advice. In September, a compensation package was worked out and the workers were given a compensation of a total of RM300 000 and paid repatriation of workers back to Vietnam and Indonesia. On October 20, Polcouns and Poloff were briefed on the case by the Finnish executives involved in the problem solving matter. The executives were very frustrated over the lack of cooperation and information sharing by its Malaysian partner - resulting in the decision to divest shareholdings in the Malaysian company and filing a lawsuit against its partner Polar Twin Advance.

Engaging with Government - Little assistance, according to them, but Polar Electro admitted that they had not file any complaint with the relevant authorities. However, a Polar Electro executive described an event of intimidation hinting the Penang police protecting their Malaysian partner: a police officer came into the hotel room the executive was in and questioned him. But they have kept the door with government open with options of communication laid out.

Engagement With Other Parties - Many including the Bar Council being the active party, MICCI and other relevant parties:

Extract below:

6.  (SBU) Besides Post's active involvement in the Polar Electro case, we are engaging the corporate community and 
civil society through an outreach program designed to raise awareness of forced labor and trafficking in persons for 
labor exploitation.  On June 18, Poloff met with the human resource manager committee of the Malaysian International 
Chambers of Commerce and Industry (MICCI) to discuss reports of forced labor in Malaysia and the possible ramifications in 
the international community.  The business executives responded very positively and MICCI requested a follow-up 
presentation, which is set for November 13.  In conjunction with the release of the 2008 TIP report in June, Post briefed 
the Malaysian Bar Council's human rights committee on forced labor and how the Malaysia's 2007 anti-TIP law could be used 
to prosecute forced labor cases.  The Bar Council is an active partner, providing its members with internal training 
on the new TIP law and providing a Bar Council representative to speak at both MICCI outreach events.  In September, Poloff 
discussed labor trafficking and forced labor with the Deputy Speaker of Parliament and officials from the Malaysian Trade 
Union Congress in Sarawak, East Malaysia. 
The full cable on Forced Labor case: (Read here)

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