VZCZCXRO3100
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #0940/01 2980816
ZNR UUUUU ZZH
P 240816Z OCT 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC PRIORITY 1817
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
RUEHHE/AMEMBASSY HELSINKI 0022
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 KUALA LUMPUR 000940 
 
SENSITIVE 
SIPDIS 
 
FOR EAP/MTS AND G/TIP 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV ELAB KTIP FI VM ID MY
SUBJECT: FINNISH COMPANY POLAR ELECTRO ASSISTS FORCED LABOR 
VICTIMS 
 
Summary and Comment 
------------------- 
 
¶1. (SBU) Finnish company Polar Electro recently provided 
compensation and repatriation assistance to 40 forced labor 
victims from its Malaysian joint-venture company, following 
interventions by an international NGO and Post.  The Polar 
Electro case appears illustrative of the challenges facing 
some foreign companies when dealing with allegations of 
forced labor at their Malaysian suppliers' facilities.  These 
challenges include the mindset among some Malaysian employers 
that confiscating the passports of migrant workers, contract 
swapping, and restricting the movement of foreign workers are 
acceptable practices.  Employers holding the passports of 
migrant workers is the standard in Malaysia, which renders 
the workers more vulnerable, but we do not have data on the 
incidence of labor trafficking in Malaysian factories.  In 
addition to the Polar case, Embassy Kuala Lumpur continues to 
engage the corporate community and civil society through 
outreach programs designed to raise awareness of forced labor 
and trafficking in persons for labor exploitation.  End 
Summary and Comment. 
 
Finnish Company and U.S. Mission Respond to Reports 
--------------------------------------------- ------ 
 
¶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. 
 
¶3.  (SBU) Polar Electro then worked with BPSOS, which 
provided the laborers with legal counsel to develop a 
compensation package for the estimated 40 plus mostly 
Vietnamese workers, even though the Finnish parent company 
was not directly responsible for the mistreatment of the 
workers.  Post continued to engage with the Finnish embassy 
on the issue, and on September 9 the Finnish DCM informed 
Poloff that Polar Electro provided the workers involved a 
compensation package totaling at least 300,000 ringgit (about 
$91,000) for unpaid back salaries.  Polar Electro also paid 
to repatriate the workers to their home countries (Vietnam 
and Indonesia), a process arranged with assistance from local 
NGO Tenaganita.  (Note:  In an earlier forced labor case 
involving the Esquel company, the Embassy had linked BPSOS to 
Tenaganita, a longstanding anti-trafficking partner that 
receives USG support.) 
 
¶4.  (SBU) The Finnish Ambassador, Finnish DCM, and two Polar 
Electro executives from Finland briefed PolCouns and Poloff 
on October 20 regarding Polar Electro's ongoing efforts with 
the Malaysian plant.  We were told that the Malaysian 
partner, in addition to allegedly mistreating employees, has 
denied Polar Electro access to its factory and may have 
embezzled funds.  The Polar Electro executives expressed 
their frustration with the local partner's lack of 
cooperation or information sharing on the forced labor 
reports.  Polar Electro wishes to divest shareholdings in the 
Malaysian company and intends to file a lawsuit in Malaysia's 
legal system against Polar Twin Advance. 
 
Engaging the Malaysian Government 
--------------------------------- 
 
 
KUALA LUMP 00000940  002 OF 002 
 
 
¶5. (SBU) The Polar Electro executives said they received 
little assistance from the Malaysian government to date, but 
also admitted that they had not filed any complaints with the 
authorities related to this forced labor case.  Likewise, the 
executives were unaware if other parties, such as Tenaganita 
and BPSOS, filed criminal or civil complaints over the forced 
labor conditions.  Polar Electro speculated that some police 
officials in Penang appear to be protecting the Malaysian 
partner.  One of the executives described an incident where a 
policeman came to his hotel to question him as a form of 
intimidation.  Post provided Polar Electro with additional 
points of contact in the Malaysian government for them to 
pursue the case should they choose to do so. 
 
Outreach Efforts 
---------------- 
 
¶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. 
KEITH