Jul 14, 2021

Forced labour in the Malaysian medical gloves supply chain

Ethicalprocurement
modernslavery
ESG
Supplychainriskmanagement
4 min
We take a look at the findings of the Modern Slavery PEC report, "Forced labour in the Malaysian medical gloves supply chain during the Covid-19 pandemic”

The  UK-based Modern Slavery and Human Rights Policy and Evidence Centre (the Modern Slavery PEC) have published a report, "Forced labour in the Malaysian medical gloves supply chain during the Covid-19 pandemic.” Research for the report was conducted between August 2020 and April 2021.

"Both before and during the pandemic, the US placed import bans on gloves produced by two major manufacturers in Malaysia due to findings of forced labour. The research sought to evidence the scale of forced labour in the Malaysian medical gloves supply chain during the pandemic and identify opportunities for positive change to prevent and remediate labour issues,”

The study took a supply chain approach, including a survey of 1,491 (mainly migrant) workers in Malaysia, 11 interviews with migrant workers and 14 interviews with manufacturers in Malaysia and with government officials, suppliers, and procurement managers in the UK. Surveyed workers and interviewees were asked about their experiences prior to and during the pandemic.

The report claims, "Issues associated with the indicators of restriction on movement, isolation, abusive working and living conditions, and excessive overtime, are also entrenched but were exacerbated by the pandemic, through the direct health and safety risks of Covid-19 and from pressures placed on production by increased global demand for gloves,” 

According to the July summary report, increased demand for medical gloves during the global pandemic led to a significant change in the operation of the supply chain for medical gloves from Malaysia to the UK’s NHS.

This caused a shift in power dynamics, which favoured manufacturers and put decisions about distribution, pricing, and payment terms more firmly in their court, increased pressure on existing workers and reduced opportunities for ethical procurement.

As evidenced by the ongoing presence of forced labour indicators, current legislative and policy measures do not effectively address labour exploitation, modern slavery, and poor working conditions in supply chains. Although based on International Labour Organization's (ILO) framework, four of the 11 indicators worsened amid increased demand for medical gloves caused by the COVID-19 pandemic, labour issues in the medical glove supply chain have been longstanding.

In addition, there was a significant risk of transmission of COVID-19 among workers within the glove factories.

Debt Bondage

According to the research summary, issues connected with one indicator on debt bondage have, however, improved during the pandemic. However, high recruitment fees and associated loans mean that workers are tied to employers at least until the debt is repaid. 

"Particularly in the first year of their employment, many workers in the medical gloves industry are at high risk of debt bondage. 

"There has been some improvement during the pandemic with movement in the sector towards reimbursing recruitment fees. US import bans in 2019 and 2020 on two Malaysian manufacturers on grounds of forced labour appear to have been influential in promoting wider commitment in the sector to reimbursement. 

"A quarter of surveyed workers reported receiving some reimbursement of fee from their employer,” the summary said.

The Path to More Ethical Supply Chains

"The shift in power to the manufacturers witnessed during the Covid-19 pandemic is unlikely to be permanent, and it is important for improvements in labour standards to be part of future supply chain resilience strategies. One area for further research is to evaluate how UK public procurement performs in relation to issues of social value and the remediation of modern slavery through revisions to UK procurement legislation following EU exit. 

"Evaluation of NHS Supply Chain’s evolving systems for labour standards assurance and the UK government’s training modules for ethical public procurement are other important research areas. We also recommend research into the labour recruitment chains operating between migrant workers’ countries of origin and their country of employment, and to logistics workers in supply chains.

"Manufacturers, the Malaysian government, and governments and recruitment agencies in migrant workers’ countries of origin should work together to monitor and improve labour recruitment processes, especially to eliminate fee payment and provide workers with accessible and accurate information about available jobs. Due diligence in procurement should include prevention, mitigation, and remediation of debt bondage connected to recruitment fees,” the summary said.

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