VZCZCXRO9656
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #0460/01 1550840
ZNR UUUUU ZZH
P 030840Z JUN 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 1083
RUEHC/DEPT OF LABOR WASHINGTON DC PRIORITY
INFO RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 02 KUALA LUMPUR 000460 
 
SIPDIS 
 
FOR EAP/MTS, DOL/ILAB - RACHEL RIGBY, DRL/ILCSR - MARK 
MITTELHAUSER, AND G/TIP - STEVE STEINER 
STATE PASS TO USTR - WEISEL AND ROSENBERG 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV ELAB ECON ETRD MY
SUBJECT: FORCED AND CHILD LABOR REPORT - MALAYSIA 
 
REF: REF: STATE 43120 - INSTRUCTIONS 
 
 Introduction 
------------ 
 
¶1.  Embassy sources have reported incidents of forced labor 
in Malaysia's garment industry, and forced labor and 
exploitative child labor in the palm oil sector.  We received 
corroborating reports from multiple sources for most 
information, but Embassy officers have not had the 
opportunity to conduct first-hand verification of the 
reports.  Embassy sources do not have credible estimates of 
the extent of forced labor and exploitative child labor in 
the garment and palm oil sectors, and determining the extent 
of such problems would require further research.  This cable 
responds to the Department of Labor's request for 
information, reftel. 
 
Garments 
-------- 
 
¶2.  Goods: Garments. 
 
¶A.  Type of exploitation:  Forced labor (debt-bondage, 
contract switching, and passport confiscation). 
 
¶B.  Sources of information and years:  Post gathered all 
information during the last 12 months from a credible local 
NGO, the Malaysian Trade Union Congress (MTUC), a credible 
international NGO, the government-sponsored national human 
rights commission (SUHAKAM), interviews with migrant workers, 
and credible journalists.  Most of the information was 
reported by multiple sources. 
 
¶C.  Narrative: All sources agree some laborers working in 
garment factories work in conditions of forced labor, as 
defined reftel.  The majority of foreign laborers, both men 
and women, are from regional countries including Thailand, 
Vietnam, Indonesia, the Philippines, and Bangladesh.  Some 
Malaysians from rural areas also reportedly are subject to 
forced labor in garment factories.  Debt-bondage, contract 
substitution, passport confiscation were the most common 
catalysts for forced labor.  In some cases, sources report 
that employers deny workers the freedom to leave, forcing 
them to live and work on the company's premises. 
 
Most sources informed us that "agents," both officially 
licensed and unlicensed, recruited some workers with promises 
of high paying jobs, later unfulfilled.  Some migrant workers 
signed contracts in their home countries.   Upon arrival, 
some employers required workers to sign new contracts, which 
advantaged the employer and substantially reduced promised 
salaries and/or required workers to work longer hours. 
Debt-bondage is a common factor is such cases.  However, in 
some cases workers accumulated more debt because they had 
access only to company stores for necessities such as food 
and housing.  In one documented case, Vietnamese working in a 
Penang clothing factory that which produces designer clothing 
received 8.90 to 30 ringgit ($2.75 - $9.40) net pay for two 
weeks labor after various deductions from their salaries. 
 
Sources also noted that in some cases, workers are not free 
to leave the factories' premises.  In such instances, 
employers sometimes locked workers inside their quarters, 
located on the factory's compound, to prevent workers from 
leaving.  Also, passports were confiscated and employers 
threaten workers that, if they left, the company would report 
them to Immigration and the workers would be detained as 
illegal migrants. 
 
¶D.  Incidence:  Sources do not have credible estimates on the 
number of persons working in conditions of forced labor, or 
the number of factories using forced labor. 
 
Palm Oil 
-------- 
 
¶3.  Goods: Palm oil. 
 
¶A.  Type of exploitation:  Forced labor (debt-bondage, 
contract switching, and passport confiscation) and child 
labor (family debt-bondage). 
 
¶B.  Sources of information and years:  Post gathered all 
information during the last 18 months from the Malaysian 
Trade Union Congress (MTUC), credible international 
organizations, and credible journalists.  Most of the 
information was reported by multiple sources. 
 
KUALA LUMP 00000460  002 OF 002 
 
 
 
¶C.  Narrative:  We do not have credible estimates of the 
number of palm oil plantation employees working in conditions 
of forced labor.  Sources stated that some plantation workers 
experienced debt-bondage, and some plantations utilize child 
labor.  Migrant workers from Indonesia, the Philippines, and 
Bangladesh, and ethnic Indian Malaysians constitute the 
largest groups working on plantations.  According to sources, 
workers on plantations using forced labor include men, women, 
and children. 
 
A local newspaper described how ethnic Indian Malaysian 
families become subject to forced labor on palm oil 
plantations.  A family's original debt most often occurs when 
a person begins employment on a smaller plantation.  These 
small plantations pay workers with coupons rather than cash. 
The coupons are good only at the company store and traded for 
essentials.  They are not enough to sustain a worker and his 
family for the entire month and debt begins to grow.  Sources 
told us when a worker owes about 10,000 ringgit (about 
$3,125), the "debt" is sold to a larger plantation.  As the 
debt grows, other family members, if they are in Malaysia, 
may be forced to work in an attempt to reduce the debt. 
Eventually, in such cases, the entire family, including 
children, could be forced to work.  Plantations using forced 
labor may continue selling the debt to larger plantations and 
both families and workers could lose their freedom of 
movement. 
 
Some plantations are situated in isolated locations.  Often, 
company stores are the only source of necessities available 
to workers, which adds to their debt.  Some sources report 
workers physically abused for attempting to leave a 
plantation.  Reports indicate that some workers do not leave 
their plantations for several years at a time. 
 
¶D.  Incidence:  Sources did not have credible estimates of 
the number of persons affected by conditions of forced labor 
and exploitative child labor on palm oil plantations. 
Sources, however, expressed concern regarding the conditions 
on palm oil plantations that could lend themselves to 
potential abuse. 
 
Efforts to Combat Forced Labor and Child Labor 
--------------------------------------------- - 
 
¶4.  A government official from the Ministry of Human 
Resources, contacted for the purposes of this report, stated 
that the government of Malaysia (GOM) does not believe forced 
labor to be a significant problem.  The GOM does acknowledge 
that underpayment of wages and working excessive hours does 
occur.  The official stated that the GOM normally launches an 
investigation only after receipt of a formal complaint.  A 
respected journalist noted that the government has yet to 
investigate a case of alleged forced labor at a palm oil 
plantation in the state of Negeri Sembilan.  The victims, 
assisted by local NGOs, first lodged a formal complaint in 
January 2007.  Ishak Mohamed, Director of Immigration 
Enforcement, publicly warned employers in January 2008 they 
could be charged under Malaysia's Anti-Trafficking in Persons 
Act if they abused employees. 
 
¶5.  The government-sanctioned human rights body SUHAKAM 
monitors and reports on labor conditions and exploitation. 
SUHAKAM highlighted some of the labor issues existing in 
Malaysia in its Human Rights Report for 2007, released May 
¶2008.  The report also included recommendations for 
addressing labor exploitation, including adopting the 
principles of the International Labour Office (ILO) 
Declaration on Fundamental Rights and Principles at Work and 
the ratification of the International Convention on the 
Protection of the Rights of All Migrant Workers and Members 
of Their Families.  The MTUC and Bar Council use existing 
Malaysian labor laws to file labor claims for victims of 
forced labor.  Other local NGOs, such as Tenaganita, provide 
counseling and lobby GOM for better protection against forced 
labor. 
SHEAR