Migrant workers in Malaysia seek unpaid wages from supplier to Japanese companies

Around 280 Bangladeshi migrant workers in Malaysia are demanding hundreds of thousands of dollars in back wages and other money owed to them after their former employer, a plastic parts supplier to big Japanese companies, closed down.

The workers at Kawaguchi Manufacturing's factory in Port Klang, Malaysia's largest port city, were left stranded when the company withheld their wages for up to eight months before shutting down late last year. The workers have filed complaints in Malaysia and back home in Bangladesh.

Such disputes have become a diplomatic sore point between Bangladesh and Malaysia, drawing scrutiny on a small but powerful group of recruitment agencies and middlemen who monopolize such jobs.

Asif Nazrul, an adviser to Bangladesh's expatriate welfare ministry, met with Malaysia's Home Minister Steven Sim Chee Keong in Kuala Lumpur last week. Officials were due to meet again Wednesday in Dhaka, the Bangladesh capital.

The interim government that took over in Bangladesh after the ouster of former Prime Minister Sheikh Hasina has placed a higher priority on the plight of migrant workers who often get trapped in debt after paying exorbitant recruitment fees to work in dismal conditions for little pay.

Labour advocates say the situation is worsening as more people from across South Asia, sometimes losing their livelihoods due to climate change, seek work in Southeast Asia.

Trade tensions between the US and China have accelerated that trend as factories move from China to places in Malaysia, Thailand, Vietnam and elsewhere.

Workers allege abuse The workers have received just 251,000 ringgit (USD 58,101) of the more than 3 million ringgit (USD 694,444) in back wages that a Malaysian labour tribunal ordered Kawaguchi to pay. Many have found new jobs but still have heavy debts after borrowing money to pay hefty recruitment fees.

The workers allege they were sometimes required to work without breaks for 24-hour shifts and on holidays with no paid overtime, making plastic casings for televisions and air conditioners. They say Kawaguchi confiscated their passports, provided inadequate housing and delayed their visa renewals.

The factory shut down in December, soon after Sony Group and Panasonic Holdings Corp., two of Kawaguchi's main customers, halted their orders in response to the allegations against their supplier.

After the factory closed, the workers say Malaysian officials forcibly sent many of them to another city some 360 kilometres away to toil in new factory jobs without giving them any information. They were kept in filthy shipping containers converted into dormitories. Another 80 workers were told to work in palm oil plantations — but refused.

Most made their way back to Port Klang to seek work and chip away at the debts that have been accumulating. It took nearly three months for them to get permission from the Malaysian government to switch jobs.

The Associated Press got no response to multiple requests to Kawaguchi for comment. Malaysia's labour department also didn't respond to requests for comment.

Wider trends across developing Asia Factories in Malaysia and other countries in Southeast Asia rely on migrant workers, often from Bangladesh, Myanmar and Nepal, to fill labour-intensive jobs in manufacturing, plantations, or construction that local workers won't perform for the wages offered.

The cost of recruitment and migration from Bangladesh to Malaysia is among the most expensive in the world, according to the International Labor Organisation's office in Bangladesh.

The official recruitment fee is about USD 650 per worker. But all the workers at Kawaguchi said they paid nearly USD 5,000. The loans they took to pay such sums has pushed them into debt bondage as they labour to pay off ever mounting debts.

In 2023, Malaysian Prime Minister Anwar Ibrahim said Malaysia should end use of recruitment agents, describing the system as "modern slavery." But a 2024 study of Bangladeshi workers in Malaysia found that more than 70 per cent had spent at least half of their wages to pay off recruitment debts. Most have at least two loans and many said they were misled about their wages.

Nearly everyone who migrates overseas from Bangladesh, one of the countries most affected by climate change, has suffered at least one form of modern slavery, like withholding of wages or physical violence, according to a study by the London-based think tank International Institute for Environment and Development.

Seeking help from Japan Panasonic, Sony and Daikin, three of Kawaguchi's former main customers among about a dozen, agreed to cover an estimated USD 1.3 million of the recruitment costs paid by the workers. It's unclear how much each company is contributing.

''This doesn't cover all the workers' costs, including interest rates of up to 30 per cent they must pay on their loans,'' said Andy Hall, a British labour activist who has been helping the workers. Many have also defaulted on their debts after going months without wages.

"They're absolutely desperate and they're at very high risk of falling into even worse situations," Hall said.

Daikin settled with the workers, agreeing to pay them more, although it says it accounted for only 1 per cent to 2 per cent of Kawaguchi's orders. The air conditioner manufacturer told AP it was working with human rights groups to resolve any remaining issues.

Panasonic said it was "proportionally reimbursing the recruitment fees" paid by workers and had asked Kawaguchi to correct labour violations. It said it tried to support Kawaguchi but had to disengage from the company due to its financial woes and anticipated production problems.

Sony told AP its code of conduct prohibits abusive labour practices in its supply chain. After investigating, it demanded corrective measures. "When our demands were not satisfied, we terminated our relationship with this supplier," it said.

The workers are seeking more help and lawyer Terry Collingsworth of US-based International Rights Advocates, who is representing them, said that they were in discussions with Sony and Panasonic.

''We are not asking you to admit liability. We are asking you to comply with your public commitment to remediate when one of your suppliers violates the human rights of its workers," said a Jan. 16 letter from Collingsworth to Sony and Panasonic.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)