Thursday, February 24, 2011

Malaysian Bar Press Release: Defend human rights defenders (Charles Hector) and safeguard migrant workers.

Press Release: Defend human rights defenders and safeguard migrant workers

Monday, 21 February 2011 10:55am

Asahi Kosei (M) Sdn Bhd’s threat to bring a RM10 million defamation lawsuit against Charles Hector, a Member of the Malaysian Bar, is a deplorable and coercive act. The Japanese-owned Malaysian company has demanded this sum over a blog article by Charles Hector in which the latter alleges that, in response to grievances raised by 31 of their workers from Myanmar, the company threatened the workers with termination of employment and possible deportation back to Myanmar. The complaints ranged, it was alleged, from non-payment of agreed wages, unlawful deductions, and monetary penalties for absences from work.

We call on both the Malaysian and Japanese authorities to launch immediate investigations into the authenticity of the allegations that Charles Hector has brought to light, and to act immediately to prevent the committing or continuation of any human rights abuses against migrant workers.

Instead of harassing them and threatening them with incarceration, sedition or, in this case, defamation, state and non-state actors would do well to study the allegations made by human rights defenders like Charles Hector on behalf of voiceless migrant workers. They should also carefully study the terms and conditions of work to which migrant workers are subject, the conditions under which they live, and the restrictions under which they are placed, to ensure that these conform to internationally-accepted standards.

The case also brings to light the practice, permitted by the Immigration Department and the Ministry of Human Resources, of allowing selected companies who have no labour operations themselves to nonetheless recruit foreign workers from overseas, and then to outsource these workers to third parties for a fee.

To avoid any further incidents of abuse against migrant workers, or allegations of the same, the Malaysian Bar calls upon the Government to quickly ratify and implement the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, which was adopted by the UN General Assembly on 18 Dec 1990, and to give full effect to the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers, made on 13 Jan 2007.

The Malaysian Bar also calls on the Government to support and uphold the UN Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms, otherwise known as the Declaration on Human Rights Defenders, which was adopted by the UN General Assembly on 9 Dec 1998. In particular, we urge the Government to take all necessary measures to ensure the protection of these human rights defenders from any violence, threats, retaliation, adverse discrimination, pressure or any other arbitrary action as a consequence of their legitimate exercise of the rights referred to in the Declaration.

This incident gives the Government a clear opportunity to improve its less-than-sterling record of protecting those who stand up for human rights.

Ragunath Kesavan
Malaysian Bar

21 February 2011

Wednesday, February 23, 2011

Migrants for ‘dirty, demeaning and dangerous’ low-end jobs

Locals put off by ‘dirty, demeaning and dangerous’ low-end jobs (Star, 19/2/2011)

EVER walked into a grocery store or a food stall and got greeted by a foreign worker, and then only to be met by a blank stare when you requested for something?

Language barrier is just one of the many gripes of consumers against businesses, especially small establishments, that employ foreign workers.

For these small businesses, hiring foreign labour is not a question of choice. According to many employers in this segment, locals are simply not interested in such low-end jobs.

Shamsuddin Bardan ... ‘The major reason many SMEs hire foreign workers is that they have no choice.’

Malaysian Indian Restaurant Owners Association president Datuk R. Ramalingam Pillai calls this segment of employment the “3D” category.

“Locals consider it dirty, demeaning and dangerous,” he says in jest.

Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan says many local talents just aren't interested to work in small establishments, namely SMEs (small and medium-sized enterprises).

“The major reason many SMEs hire foreign workers is that they have no choice. Being small, they can't attract locals to work for them.

“Locals prefer to work in big organisations because they are career-driven. Foreign workers, especially within the low-income bracket and those that work for small businesses are not. They work here for a few years and return to their home country.”

He adds that previously, most SMEs were family-run businesses but today, the newer generation is not interested in following the footsteps of their forefathers as they prefer to seek opportunities elsewhere.

The Malaysian Indian Hairdressing Saloon Owners Association president K. Kaviarasan says that being a barber, especially of the “old school” kind, is considered “not glamorous” by locals.

“We have to hire foreign workers because nobody (locals) wants the job. I myself am a third-generation barber but my children are not interested in carrying on the legacy,” he tells StarBizWeek.

Kaviarasan says many Malaysians are put off by the long working hours.

“Being a barber means having to work from 9am to 9pm and most Malaysians don't like working long hours. They would rather be the boss of the business and have more flexible working hours.”

Kaviarasan believes that the salary (of barbers) is not the main factor why Malaysians are put off with this line of work.

“The salary of a barber is not great but it's alright. The pay ranges from RM1,300 to RM1,500, depending on how long they've been working.”

Shamsuddin says it is a misconception that foreign workers are paid lower salaries than locals within the same job scope.

“The public perception that foreign labour is cheap is untrue. For employers to hire foreign labour, they must go through an agent and the agency's fee is high. It ranges between RM4,000 and RM5,000 per worker, depending on the situation.

“For those that require three or four foreign workers, the cost is even higher.”

Shamsuddin adds that employers are required by law to pay their foreign worker the same salary as they would a local employee. He says a foreign worker could file a complaint with the labour department if they are underpaid.

Datuk Ramalingam Pillai ... ‘Locals consider it dirty, demeaning and dangerous.’

SMI Association of Malaysia national president Chua Tiam Wee says SMEs in the country are facing a shortage of local employees for these low-end jobs.

“We can't find locals to man a kitchen in a small restaurant, a factory or a retail shop because they don't like the heat or prefer to work in an air-conditioned environment.

Chua adds that SMEs prefer to hire foreign workers because of the high level of absenteeism among locals.

“Locals take leave during holidays or festive seasons and may take medical leave for prolonged periods, but this may not be the case for foreign employees.

“Foreign workers are also willing to work overtime just to earn extra money,” he says.

Sunildeep Singh, who owns and runs the Kedai Serba Aneka Simpang Tiga grocery store in Batu Caves, Selayang, says it is easier to attract foreign labour to work at a sundry shop.

“I also believe that they are more hardworking than locals. Foreign workers are willing to work all day, even on weekends and public holidays.”

“I'm sure that our own locals can do an even better job, but they expect high pay for very little work.”

Sunil runs the shop with his wife and is assisted by a single foreign worker from India.

He says hiring foreign talent is the “norm” these days.

“Foreign talents are not difficult to get. They're abundant. You can spot them in every corner.”

Speaking from experience, Sunil says the only negative issue about hiring a foreign workers is that they may not be very trustworthy, especially with money.

“It's hard to trust them with your cash. You need to keep your eyes on them at all times,” he says, adding that his former (foreign) employee was caught stealing red-handed.

“However, my new worker seems trustworthy,” he adds.

Communication barrier

Sunildeep Singh believes foreign workers are more hardworking than locals.

One of the most common problems with hiring foreign workers is that they cannot communicate in either Bahasa Melayu or English. Shamsuddin says this can cause frustration to customers and deter them from frequenting the premises in future.

“In a lot of instances, the foreign worker is left on their own to man the premises while the proprietor is not around. Locals will end up leaving when they find that the person at the store can't communicate well with them.”

Muslim Wholesalers and Retailers Association executive secretary Kamal Musthaffa believes that language issues will not be a problem if the foreign worker does not deal with the customer directly.

“If they are not working at the front end, then it's not an issue. Foreign workers (that have problem communicating) should be designated at the back of the shop where they don't deal with the customers. They could work on just arranging or packaging of the goods.”

Shamsuddin believes that in the worst-case scenario, the country's brand-image can be affected.

“When tourists come to Malaysia, they are served by foreign workers and this would not look good for the image of our country. We need to look critically into these kinds of businesses. It should be manned by our own people and reflect our culture.”

Kaviarasan concurs that language is a common problem when hiring foreign workers, noting that it takes between one year and two years for them to be able to start conversing with locals properly.

“But they can be trained. It's not an issue.”

Shamsuddin says small businesses should endeavour to train their foreign workers and ultimately, improve their brand-image.

“There are a lot of small businesses that are operating outside the law. It is doubtful whether some of them even have proper insurance or subscribe to Socso.

“By upgrading themselves and improving their brand-image, there is no reason why they cannot hire locals.”

Shamsuddin says the local authority can also step in and improve the working conditions of small establishments that employed foreign workers.

“Many of the businesses in Petaling Street or Chow Kit are operated by foreigners. If we could may be have a building to house these businesses, it would provide a more appropriate avenue to work.

“If this happened, they (the businesses) won't face the hassle of having to push their carts and facing storage problems or being harassed by the authorities.”

Shamsuddin says the Government is trying to reduce the number of foreign workers coming into the country and has proposed to increase the levy on foreigner workers by 400% by 2015.

“But we (MEF) have objected to this. We believe not all the employers should be penalised by the levy.

“Some businesses hire foreigners as a matter of choice and intentionally don't hire locals, while others do it out of necessity (they have no choice but to hire foreigners).”

Monday, February 21, 2011

84% of Western Union's total global revenues of US$5.2bil comes from migrant remitances

Remittance business picks up steam(Star, 19/2/2011)

THE remittance business is enjoying good growth and will march on following the inflow of foreign workers into the country amid the Government's various projects to propel the local economy.

Industry observers feel the Government's open-door policy of bringing in such workers, unskilled and skilled ones, to boost certain sectors of the Malaysian economy will see the remittance business gaining prominence as a revenue generator for remittance service providers (RSPs) despite the competition in this business.

Remittance growth

According to the Malaysian Immigration Department 2009, the migrant workers population in Malaysia totalled 1.92 million of which 80% were from Indonesia, Bangladesh and Nepal.

Currently, there are 62 RSPs in Malaysia of which 22 are commercial banks, two are national saving banks and 38 are non-bank RSPs, among others like Western Union and MoneyGram. The emergence of non-bank RSPs less than a decade ago has made the remittance business more competitive.

RAM’s Dr Yeah Kim Leng says the remittance of migrant funds is expected to rise further by 10%-15% this year.

RAM Holdings Bhd chief economist Dr Yeah Kim Leng says that with the continuous rise in the intake of unskilled foreign workers in response to the needs of the expanding plantation and services sectors, the remittance of migrant funds is expected to rise further by 10%-15% this year.

The stronger remittance, he adds, is also underpinned by the expected rise in the number of skilled expatriates and Malaysian returnees attracted to the country's Economic Transformation Programme (ETP) and accompanying investment activities.

“Remittance flows are the second largest source of external funding for developing countries behind foreign direct investment. A rough gauge of the size of banking remittance business in Malaysia can be gleaned from the country's balance of payment statistics.

“Based on the total inward and outward current transfers and compensation of employees, the remittance business exhibits a steadily rising trend. Over the 2005-2009 period, the total value of inward and outward flows averaged RM30bil annually, a 60% rise over the average for the preceding five-year period, he says.

The estimated total remittances rose by 22% to RM36.5bil in 2009 and recorded a further 12% increase in the first three quarters of 2010.

On the types of transactions performed by migrant workers, Maybank's deputy president and head of community financial services Lim Hong Tat says basically there are two types. The first involves where the fund is credited into a bank account of a beneficiary in the receiving country, and the second one is where the fund is collected in cash over the counter at the overseas appointed agent.

Most of the RSPs, Lim says, are using the Swift system or batch file processing for account crediting remittance service and usually the funds can be received within two to three working days.

The existence of non-bank RSPs like Western Union and MoneyGram in Malaysia has moved the remittance business into a new and higher level of service where the customer may opt for instant cash collection over the counter.

Apart from partnering with MoneyGram, one of the world's largest remittance service provider, it has also launched a new remittance platform known as Maybank Money Express (MME) in September 2010 which is capable of offering both account crediting and instant cash collection service.

MME is the first such service offered by a Malaysian bank that also offers instant cash collection over the counter.

Lim says MME leverages on Maybank's regional presence to provide remittance touch points in seven countries like Brunei, Cambodia, Indonesia, Pakistan, the Philippines, Singapore and Vietnam. It will expand to India and the Middle East by year-end, he adds.

Judging from the number of foreign workers in Malaysia and RSPs in the country, the remittance business is competitive and a profitable one.

Profitable though competitive

Yeah feel the remittance business is a profitable one for banks as margins from transaction charges and exchange rate conversion provides a lucrative revenue line and an incentive for banks to tap the growing remittance and cross-border banking business services.

As banks' interest margins come under pressure this year, remittance services will become an even more important segment of the banks' non-interest income stream, he notes.

Banks which have invested heavily in technology and regional network infrastructure are well positioned to service the banking needs of the ever growing pool of internationally and regionally mobile skilled and unskilled labour, Yeah adds.

United Overseas Bank (Malaysia) Bhd head of transaction banking division Andre Lee agrees. He says migrant workers' remittance business is a profitable business for banks, especially in Malaysia which is dependent on migrant workers for certain industries.

Those working in Malaysia usually commit a certain portion of their wages to support their family back home and this type of remittance happens monthly for most migrant workers during their payroll week, he notes.

Western Union’s Ratheesh Kumar says the remittance market is growing and has strong potential.

For UOB Malaysia, Lee says the bank has seen an upward trend of remittance from a transaction record of 24,000 in 2008 to 95,000 in 2009. On a month-to-month comparison, January 2011 versus January 2010, the bank's remittance figure rose by 25%.

Overall, Lee says the remittance business of migrant workers contribute about 9% of the bank's total remittance business revenue and hope to drive this business further.

Ratheesh Kumar, who is Western Union's regional vice-president for South Asia & South East Asia, says the remittance market is growing and has strong potential.

“While the Western Union service offers our agents including banks an additional fee based income, more importantly it also helps bring in customer footfalls which can be easily translated into incremental business for the bank's portfolio of products. In short, a win-win situation for both the bank and Western Union,'' he explains.

In 2010, Western Union completed 214 million consumer-to-consumer transactions worldwide, moving US$76bil of principal between consumers, and 405 million business payment.

As for 2011, Ratheesh says given the dynamic nature of the remittance industry, it would be too early to forecast the growth of the market for the year.

The company's global consumer to consumer business (migrant remittances) accounts for around 84% of Western Union's total global revenues of US$5.2bil as of last year.

Lim says the presence of a large number of about 1,800 touch points nationwide where remittance services are provided is an indication of the profitability of this business although the high number of RSPs does affect margins for the remittance business.

Maybank is targeting the migrant workers remittance business to increase 10% in 2011 from last year with the introduction of its MME service. Without churning numbers, he says Maybank's remittance business is sizeable and migrant worker remittance business consist a reasonable portion of it.

The need for formal channels

Moving forward, although the remittance business is poised for strong growth in view of the higher demand for foreign workers amid more projects taking shape to steer the economy, there is a need to make the service more efficient.

Yeah says that besides upgrading facilities for funds remittance, the expansion of branch networks of banks or tie-ups with foreign banks is needed to cater to the large number of workers looking for formal banking channels to remit funds.

In turn, this will help to curb the large illicit flows transfers through informal and illegal channels as highlighted in a recent international report, he notes.

Lim says that based on a study from World Bank Conference 2007 in Bali, about 90% of remittance outflows from Malaysia to Indonesia occur through informal channels.

The lack of requisite identification/status documents required to open bank accounts or interact with formal RSPs has been the main reason that some migrant workers opt for Hawala or Hundi (informal channels), he notes.

Hawala is an informal value transfer system based on the performance and honour of a huge network of money brokers, who are primarily located in the Middle East, North Africa, the Horn of Africa and South Asia.

The challenge for commercial banks is to create greater awareness among those who use informal channels to change to an efficient, much safer and reliable remittance services offered via formal channels.

By leveraging on Maybank's presence in the region, Lim says this will provide greater confidence to migrant workers who are familiar with or who may have accounts with Maybank branches or partner banks in their respective countries.

Another approach, he adds, is by offering reward campaigns to attract new customers to use the service.

“Visits to areas with large migrant population, businesses employing migrant workers and the use of vernacular language are some of the campaigns to publicise the service,'' he says.

Striking a balance in foreign labour (Star, 19/2/2011)

Striking a balance in foreign labour (Star, 19/2/2011)

Harbouring the hope of providing a better future for her family, Sutimah left her village in Surabaya, Indonesia 23 years ago and travelled almost 2,000 km by boat to Peninsular Malaysia in search of a better-paying job.

She started work as a housemaid, earning less than RM400 a month. But for Sutimah, that was a sufficient amount that could alleviate the poor living conditions of her family.

“I tried to send as much money home as possible each month so that my family could live more comfortably, and my children could have access to better education,” says the 45-year-old mother of four.

Nor Zahidi Alias says rapid economic development is the primary reason for many countries’ increasing dependence on foreign labour

Sutimah, who has just been granted permanent resident status in Malaysia, is now working as a cleaner with an agency that pays her a monthly salary of RM1,000. She still sends back a big portion of the money that she earns each month, as the financial burden of her family keeps growing, particularly since her husband became paralysed a few years ago and could no longer work as an odd-job labourer.

“I have never thought of going back to Indonesia to work. I couldn't, it's just too difficult to make ends meet and to provide for my family,” she says.

Sutimah's experience, though not representative of all, speaks of a typical factor that drives people to leave their homelands and work in another country. Invariably the migrants will cite poor living conditions and a lack of opportunity for upward social and economic mobility as the main reason in their quest for greener pastures.

Promised land?

For south and southeast Asian economies, especially those that are lagging behind Malaysia, many migrant workers perceive the latter as a land flowing with milk and honey.

Official data show that Malaysia attracts a huge number of migrant workers into the country. According to official record, the number quadrupled from less than 500,000 in 1999 to more than two million, representing about 17% of the country's workforce in 2008.

It is believed that the number has since reduced to less than two million over the last two years as many migrant workers were sent home at the height of the global financial crisis in 2009. As at the end of February 2010, total registered foreign workers stood at 1.8 million, down from 1.9 million at the end of December 2009.

What's more intriguing is the fact that the actual number of migrant workers living in Malaysia could be more than double of what the official data suggest. It is believed many of these migrant workers have entered, or re-entered the country illegally.

While Malaysia cannot claim that it offers the lucrative benefits that many first-world nations have, its relatively better economic prospects and political stability have been the major pull factors.

So, is that a boon or a bane to the Malaysians economy? According to experts, it can be both ways.

“It goes without saying that foreign workers have indeed contributed to the growth of our economy, especially in sectors where we have an acute shortage of workers such as construction,” says the Malaysian Trade Union Congress deputy president Mohd Jafar Abdul Majid.

“But our economy is swamped with foreign workers who are unskilled or have low skill sets that could not contribute meaningfully to Malaysia's aspiration of becoming a high-income economy; and I think we have been too dependent on this group of foreign workers for far too long,” he adds. This is based on the significant increase in the number of unskilled or low-skill migrant workers in the country over the past two decades.

Filling the gap

In the Economic Report 2010/2011 compiled by the Finance Ministry, it was stated that of the 1.8 million registered migrant workers in Malaysia, 38.2% were employed in the manufacturing sector, 16% in the construction and 14.2% in the plantation sectors.

Indonesia accounted for the highest number of registered foreign workers in Malaysia at 50.9% . This was attributable to their country's proximity to Malaysia and its cultural and language similarities with Malaysia.

Bangladesh was second highest, accounting for 17% of the total foreign workers in Malaysia, followed by Nepal at 9.7%, Myanmar, 7.8%, India, 6.3% and Vietnam, 4.2%.

“The high dependency on foreign labour is not a characteristic unique to Malaysia,” says Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias.

He says countries that have been experiencing high growth rates such as Singapore and the Gulf states, including the United Arab Emirates and Saudi Arabia, are also experiencing the same phenomenon of having to rely on foreign labour in many sectors in their economies.

“Rapid economic development is the primary reason for the countries' increasing dependence on foreign labour,” Zahidi explains.

In general, the rising standard of living and educational levels that usually come in tandem with economic development will to lead to an aversion to the 3D (dirty, demeaning and dangerous) sectors by the local population. The void in these sectors has to be filled by unskilled migrant workers and Malaysia is not spared.

Robust economic growth in the past two decades has led to higher standard of living and improved the literacy rate among the people.

In addition, the sustained boom in economic activities has also led to substantial job creation as employment expanded faster than the labour force.

A tight labour supply situation further fuelled the growing demand for foreign labour, especially in the manufacturing and construction sectors.

Flawed strategy?

Since the 1980s, Malaysia's economy has been driven largely by the export-oriented manufacturing sectors, especially the electrical and electronic segments. The Government, perceiving migrant workers as a cheap source of labour that could enhance the country's export competitiveness had been encouraging the deployment of foreign labour in the 1990s.

As a result, local manufacturers had been able to enjoy a steady supply of cheap labour for the past two decades, and Malaysia has been able to maintain its competitiveness.

Migrant workers have been used as the foundation of the country's rapid-growth strategy. The presence of migrant workers in the country has been more than just filling the gap in the 3D sectors.

But economists are questioning if the huge influx of foreign labour is indeed the right move.

Some economists say it has been a flawed strategy.

Professor Datuk Dr Mohamed Ariff of the Malaysian Institute of Economic Research says the opening of the floodgates for cheap foreign labour in the past is a major mistake that has put Malaysia in the middle-income trap.

“It was a short-sighted growth strategy that attempted to maintain the country's competitiveness based on a low-wage system,” he explains, adding that he firmly believes that if Malaysia had not allowed the massive influx, local manufacturers would have been forced to innovate, automate to boost productivity to maintain their competitiveness so that they could move up the value chain.

Economists concede that the continuous dependence on cheap foreign labour would be a drag to the country's economy, as it would not encourage local corporations to mechanise - the initiatives of which are necessary to push the economy into a high-income level as defined by World Bank.

In addition, the huge number of unskilled or low-skilled foreign workers in the country has also raised concerns of security and incidences of highly contagious diseases in the country.

They are also seen to be putting additional strain on the Government's fiscal position as foreign workers could also have access to subsidised facilities including fuel and medical care.

“Over-reliance on foreign workers can have detrimental consequences, and that is why the Government is looking at ways to reduce dependence on them. The nation's prevailing dependence on low-skilled foreign workers cannot be done away with overnight, as a sudden repatriation of them can have serious repercussions on the economy, especially in sectors like manufacturing, construction and plantation,” he explains.

“Production activities will stall as quick replacements are not readily available. This will inevitably lead to a loss of competitiveness, closures or stagnations of businesses,” Zahidi says, adding that the distinctive roles of foreign labours in the 3D sectors cannot be underestimated.

To lift Malaysia to a higher developmental plane, economists say more incentives should be introduced to spur businesses to become less labour-intensive.

“For certain, it is only when businesses become accustomed to capital-intensive modes of production can their reliance on low-skilled foreign labour be reduced,” Zahidi says.

Skilled foreign labour

Not all foreign workers in Malaysia are unskilled or have low skill sets. A small number of them are highly skilled professionals who play an invaluable role in enhancing the country's productivity and competitiveness.

Generally termed as expatriates, these professionals are considered to be an asset to the country, as they bring with them the knowledge and skills that could enrich the local labour force.

“Inflows of skilled foreign labour should not be discouraged. As demonstrated by other countries such as Singapore and some of the Gulf states where highly skilled foreign labour are critical in the spurring a country's development. There is certainly a positive role that certain classes of foreign workers can play in any economy,” Zahidi says.

According to Economic Report 2010/2011, as at the end of July last year, the number of expatriates in Malaysia stood at 31,371, accounting for less than 2% of the migrant workers in the country.

They were mostly employed in the services (64.8%) and the manufacturing (22.2%) sectors, and they came mostly from India (17.8%), China (10.2%) and Japan (7%).

Under the 10th Malaysia Plan, the Government planned to attract highly-skilled expatriates to promote a knowledge and innovation-based economy, especially in the technical and professional services. Part of this effort is reflected in Talent Corporation Malaysia Bhd, which aims to attract, motivate and retain high-skilled human capital in the country.

Finding the right balance

The Government's effort in reducing the country's dependency on low-skilled foreign workers has been ongoing, as evidenced in the gradual reduction in the number of registered foreign workers over the last two years. Its target is to reduce the number of foreign workers to 1.5 million by 2015.

But this would be a challenging task. “Economic transition has not been easy; neither has the country's policy to reduce its heavy reliance on low-skilled imported labour because the technology base of Malaysia is still relatively low,” says independent consultant Dr Vijayakumari Kanapathy (formerly a senior analyst with the Institute of Strategic and International Studies).

“So, given the structure of Malaysia's economy, the reliance on imported labour in the immediate future is likely to continue,” she adds.

Mohd Jafar concurs, saying: “To be fair, all stakeholders play a role in reducing the country's reliance on migrant workers. Employers need to move away from their dependence on cheap foreign labour and go up the value chain, while policymakers need to implement better regulation and improve on the enforcement part, especially in preventing the illegal immigrants from entering the country.”

Malaysia needs to shift its focus from importing cheap labour to managing labour flow that can maximise growth and facilitate its structural adjustment towards a higher income economy,

This will also minimise the negative social impact brought about by these foreign nationals. But striking a balance between short and long-term needs of the economy will prove to be a complex challenge.

Sunday, February 20, 2011

Discontinue legal action against Charles Hector, blogger and human rights defender, for highlighting plight of Burmese workers at Asahi kosei

Myanmar workers’ problems: Stop intimidation of activist blogger

Over fifty civil society groups have issued a joint statement calling on a Japanese multinational corporation to stop intimidating activist-blogger Charles Hector, who had highlighted the plight of Myanmar migrant workers in the company’s plant in Malaysia. The Asian Human Rights Commission has separately expressed its outrage.

We, the undersigned civil society groups, are gravely concerned over the demands and threat of legal action for defamation against human rights lawyer, activist and blogger Charles Hector by Asahi Kosei (M) Sdn. Bhd. According to a letter to Hector from the firm’s lawyers dated 11 February 2011, the company is demanding RM10 million from him within seven days as damages for libel. Failing which, he is being threatened with a defamation suit.

The company was reacting to postings in Hector’s blog that highlighted the plight of 31 Burmese migrant workers in Asahi Kosei who raised their grievances to their employer, and the reactions thereafter that included threats, termination and even attempted deportation back to Burma, Asahi Kosei is also demanding from Hector the removal of the blog postings and a public apology to the company to be published on his blog and in all major national English newspapers.

According to the joint media statement titled “Asahi Kosei (M) Sdn. Bhd must respect Human Rights and Workers’ Rights. Reinstate Thiha Soe and Aung San without Loss of Benefits” which 82 migration and human rights organisations worldwide have endorsed (as at 16 February 2011), the Myanmar workers had made many complaints regarding non-payment of agreed wages and unlawful deductions from their wages as well as alterations of terms and conditions of work.

The workers, who confirmed the facts of their complaints, also alleged that they had been harassed by management “agents” (employees) and forced to agree to unfavourable terms and conditions including paying a penalty of RM50 per day of absence (RM50 for two days under new contract terms), which was far more than their basic pay of RM20 per day (RM23 per day under new contract terms). The workers also wanted paid medical leave, which is an entitlement in law. The migrant workers concerned were also preparing to lodge a complaint with the Labour Department to help resolve the problems they claimed to face.

Hector disclosed in a blog posting on 15 February that he had sent two e-mails on 8 and 9 February to the company raising the workers problems with them but he did not receive any reply from Asahi Kosei to refute the contents of the two e-mails or to deny its involvement in the dispute. Sadly, the company’s first and only response was made through its lawyer’s letter of 11 February, as mentioned above.

Asahi Kosei also claimed through its lawyers that it is not the employer of the Myanmar workers concerned and has no obligation to pay their wages directly to them or to supply accommodation or household appliances and utilities to them. The firm claims that the outsourcing agent (who has not been identified by the company) is the real employer of the migrant workers and thus has responsibility over them.

Asahi Kosei, therefore, alleges that Hector has committed libel by publicising the issue in his blog and naming the firm as the employer of the Myanmar migrant workers concerned.

We, the undersigned groups, call on Asahi Kosei (M) Sdn. Bhd. to review and withdraw its demand and intended legal action against Charles Hector. It is against public interest to go after human rights activists, bloggers and media personnel who highlight any alleged human rights violations. Moreover, the company was given the opportunity to inform Hector of any inaccuracies in the information given to him when he made enquiries in two emails to the firm. The company has not explored all avenues in resolving the problem faced by the workers amicably before resorting to this demand and threat of legal action; it should focus its attention on resolving these problems.

In our view, Asahi Kosei’s action is unreasonable, arbitrary and heavy handed; aimed at the suppression of free expression and workers’ complaints. The company also appears to be pushing its responsibility for the workers to a dubious unknown and unnamed party and, directly or indirectly, obstructing the right of workers to legally resolve their labour problems through the proper channels available to both workers and employers.

It would also be commendable for Asahi Kosei to immediately reinstate the two workers and engage in the dispute resolution process according to Malaysian labour laws, with Labour Department intervention as legally provided in this country.

Likewise, we urge all employers to engage in the dispute resolution process according to employment legislation and to adhere to all relevant labour and other legislation in Malaysia which apply to local as well as migrant workers in this country. Employers should recognise and respect the rights of all workers, their human rights and human dignity.

We reiterate that all workers, including migrant workers, are human beings with inherent rights and fundamental freedoms. They are not commodities to be imported, exploited and deported at the whims of employers or their recruitment and outsourcing agents.

16 February 2011

Endorsed by:

  1. Aliran
  2. MagickRiver
  3. Centre for Policy Initiatives
  4. Centre for Orang Asli Concerns
  5. Parti Sosialis Malaysia
  6. Saya Anak Bangsa Malaysia (SABM)
  7. Civil Society Committee of Lim Lian Geok Cultural Development Centre
  8. LLG Cultural Development Centre Bhd
  9. Persatuan Pendidikan Sekolah-Sekolah Persendirian (Cina), Pulau Pinang
  10. Borneo Resources Institute, Malaysia (Brimas)
  11. Citizens International (Penang)
  12. Asian Migrants Centre
  13. Building and Woodworkers International (Switzerland)
  14. Women Institute for Reseach Development and Advancement (WIRDA)
  15. International NGO Forum on Indonesian Development
  16. Writers Alliance for Media Independence (Wami)
  17. Persatuan Kesedaran Komuniti Selangor (Empower)
  18. Thai Committee for Refugees (TCR)
  19. Human Rights Education Institute of Burma
  20. Human Rights Working Group-Indonesia
  21. International Movement for a Just World
  22. Norwegian Burma Committee
  23. Workers Assistance Center, Philippines
  24. Semarak Cerlang Nusa – Consultancy, Research, Education for Social Transformation (SCN-CREST), Indonesia
  25. Commission for the Disappeared and Victims of Violence (KontraS), Indonesia
  26. Judicial System Monitoring Programme (JSMP), Timor Leste
  27. Union Network International-Malaysian Liaison Council (UNI-MLC)
  28. Free Burma Coalition – Philippines (FBC-Phils)
  29. Initiatives for International Dialogue (IID), Philippines
  30. KKSP Foundation, Indonesia
  31. Health Equity Initiatives
  32. Migrants Trade Union (MTU)
  33. NGOs in Myanmar Web Portal
  34. Myanmar Youth Knowledge Initiative
  35. SOS (Save Ourselves), Penang
  36. Penang Watch
  37. MEO-Net
  38. Forum for Democracy in Burma
  39. Project Maje, Portland, Oregon, USA
  40. MAP Foundation, Thailand
  41. Burmese Relief Center, Japan
  42. Migrante International, Philippines
  43. Bar Council Malaysia
  44. Koalisi Perempuan Indonesia Untuk Keadilan dan Demokrasi (Indonesian Women’s Coalition for Justice and Democracy)
  45. Lee Siew Hwa, blogger
  46. Consumers’ Association of Penang
  47. Sahabat Alam (Friends of the Earth) Malaysia
  48. Third World Network
  49. Teras Pengupayaan Melayu
  50. Think Centre, Singapore
  51. Khmer Institute of Democracy
  52. Publish What You Pay, Indonesia
  53. Chin Democracy and Human Rights Network, South Korea
  54. Solidaritas Perempuan-Women’s Solidarity for Human Rights, Indonesia

Open letter from the Asian Human Rights Commission to Asahi Kosei (M) Sdn Bhd

18 February 2011

Mr. Takeshi Nishitsuji, President
Asahi Kosei (M) Sdn. Bhd.
Lot 3377, Jalan Perusahaan Utama,
Taman Industri Selesa Jaya,
43300 Balakong, Selangor Darul Ehsan
Tel: +60 3 89614360
Fax: +60 3 89614354

Dear Mr Nishitsuji,

MALAYSIA: Protest against a threat of litigation against human rights lawyer, public interest advocate and blogger Mr. Charles Hector Fernandez

The Asian Human Rights Commission (AHRC) is writing to draw your attention regarding the instructions to T S Teoh & Partners, your legal representative, on the possibility of taking legal action for libel against Mr. Charles Hector Fernandez, a blogger and lawyer, regarding the posts in his blog you claim to be libellous.

In the demand letter dated 11 February 2011, but which was served on Mr. Fernandez on February 14, you claimed that the content of his post in his blog, on 8 February, titled ‘ Hopefully Asahi Kosei (M) Sdn Bhd won’t terminate/deport workers who claim rights’; and on 9 February, titled ‘ Urgent: Stop Asahi Kosei (M) Sdn Bhd from sending Thiha Soe (PP No: A 458011) back to Burma, were “very serious libel on our clients and have caused them much distress and embarrassment”.

Your Company also demanded a payment of RM10,000,000.00 (USD3,279,307) within seven days from him to “vindicate our clients reputation”, to “remove the said postings and a full written and unequivocal public retraction and written apology in terms to be approved by us and an undertaking not to repeat these allegations”.

As of today, the post that is subject of your complaint can still be accessed online. We understand that from the very beginning of this issue, Mr Fernandez had been trying to draw your attention to the plight of workers who are complaining. Mr Fernandez acted on legitimate complaints, like any other compassionate individuals would do, to hear and comment on the grievances of victims like them. On the same day the articles were posted, Mr. Fernandez sent emails to your Company asking for you to intervene. However, he has not received any response.

While we understand that legally your Company has the right to take legal action for the protection of your interests, we urge you to reconsider this path. Your Company, who has been doing business and providing employment in Malaysia, would rather have more to gain and more contributions should you withdraw the legal action on Mr Fernandez for the following reasons:

Narrating facts, evidence vs. narrating with malice

The content of Mr. Fernandez posts were purely narration of facts based on the information given to him by the Burmese migrant workers. He acted on behalf of the workers who are foreigners in Malaysian soil to assist them in obtaining remedies. In his posts, he asked questions and did not make declarations, wrote the term ‘allegedly’ and expressed human emotions of hope that your Company would respond to the workers’ plight.

As you are aware, the migrant workers are from Burma. Most of them could not speak the language that is spoken in Malaysia; thus, if these workers could not even speak the language, we certainly could not expect them to know all the legal and complaint mechanisms therein, if there is anything that we could call effective in a real sense that is available in Malaysia.

The role on which Mr Fernandez took on this case is very important. Where the state mechanisms are not known to victims, he has helped to inform the workers how to deal with it; and where information about complaints of violations are mostly unreported, he blogs on them for other people to intervene on behalf of the workers. We would not have known the case of these workers had it not been from his blog posts.

The complaint of the Burmese workers was only made possible to be put on record, particularly with the Malaysian Human Rights Commission (Suhakam), because there are persons who assist in documenting their case. There was someone who could tell the workers the complaint mechanism available in a country where they are foreigners and in a place where they are most vulnerable to exploitation and abuse. In most cases, despite the endemic cases of violations on migrant workers, they prefer not to complain, to keep quiet and to just forget about what had happened to them for practical reasons.

As you are aware, the workers, whom you argue are the responsibility of the employment agencies from where you get their service, are from Burma. They came to Malaysia and agreed to terms, often outrightly violating minimum protection to migrant workers, because they needed the job. They needed money to support their families living in Burma, a country where most of their people would prefer leaving than staying. Burma is one of the many countries where employment opportunities could not be found and the people suffer from its own government who do not protect them.

Workers lack protection – inside and outside their country

As you are aware, if citizens coming from developed countries are in trouble in another country, they have their mechanism where their embassies and consulates would contact and communicate with their citizens in trouble. They invest human resources, time, money and expertise to protect and to represent the interest of their own citizens regardless of whether they are at home or on foreign soil. Their mechanism of protection and assistance extends beyond the borders of their own country.

But the Burmese migrant workers whom Mr. Fernandez is assisting do not have this protection and assistance mechanism from their own government. A government who could not protect their own citizens in their own soil could not be expected to protect their citizens who are in trouble in foreign countries. These workers were not provided with assistance on their complaints or asked what help they needed, for example legal assistance on labour and immigration proceedings; as should be done by governments.

The wrongful deportation, as Mr. Fernandez had it described in his blog, of the Burmese migrant workers was a statement of fact and reflects the realities of the extreme difficulties these workers would have to deal with their government. How possible it is to deport a person back to his country when it is done in a procedure that was questionable? When a person in foreign countries had nothing but himself anything can be done on him. He has no protection at all. The Burmese workers, too, are themselves aware and know full well that they can never expect their own government to help them remedy their plight.

Implications of the legal action

We understand that any aggrieved party, like your Company, has the legal right to pursue complaints should they feel that their rights are violated. The AHRC is a strong advocate of effective complaints mechanism in Asian countries, particularly helping the victims of human rights violations. Your company has the right to take legal action in the same manner the victims of human rights violations do against officers of the State.

However, there is an enormous difference between upholding the person’s or the entities lawful right to complain for its self preservation as against the right to complain to have the basic recognition of a fundamental right. The latter has tremendous and deep consequences, not only on the persons or entities, but it affects the entire people in the society within their own country once they are suppressed. Needless to say, the reason why the violations of human rights, in its unspeakable terms, goes largely unreported and is not exposed to the public in Malaysia is because of the lack of recognition by their own society and their government of the fundamental principle of human rights: Freedom of Expression.

In Malaysia, laws have been used as a tool to prosecute persons who purely narrate facts, to prosecute and impose rigorous imprisonment on persons who only intend to initiate discourse on the conditions they face in their own country. They are charged, prosecuted and punished for expressing their thoughts and opinions, not because what they say is wrong or malicious but to suppress them from exposing the realities and the human conditions in their own country. In most countries, including Malaysia and Singapore, this type of legal action attacks not only the individual, but any sort of discourse on human rights and democracy.

Thus, we urged your Company not to be part of this concerted effort to suppress the struggle of the Malaysian people for recognition of the principles of Free Speech and Expression in Malaysia. We urged your Company to help them to have this fundamental right recognised not only in books and laws in their own society. By pursuing the legal action on Mr Fernandez you are already helping in abusing a system of justice.

We urged your Company to uphold the principles of Corporate Responsibility but not abusing the legal process. In this way you can contribute to social progress in countries where you are allowed to do business to protect and uphold the interest of the people.

Yours sincerely,

Wong Kai Shing
Executive Director
Asian Human Rights Commission, Hong Kong

Media statement

Discontinue threats and action against Charles Hector, blogger and human rights defender, for highlighting plight of workers.

The Union is appalled by the reaction of Asahi Kosei (M) Sdn.Bhd., a subsidiary of Asahi Kosei Japan Co. Ltd, in going after persons who highlighted the plight of Burmese migrant workers who work in the company’s factory. We call for the immediate withdrawal of the threat of a legal suit demanding RM10,000,000-00 from Mr. Charles Hector for highlighting worker rights and human rights violation that were happening to the said 31 workers.

In response to legitimate grievances raised by the said workers, which included non payment of wages as agreed, wrongful imposition of a ‘fine’ for absence from work, and unlawful deductions from wages, the response was to use threats on these workers, deprivation of electricity and other utensils at the living quarters of these workers, and the threat to terminate and even send them back to Burma.

Now, the company seem to be denying all allegations, even to the extent of saying that these are not their workers, and that these were not workers under the ‘direct payroll’ of Asahi Kosei (M) Sdn. Bhd. They allege that all the affected workers were supplied by an outsourcing agent, and in short, they seem to say that they are not responsible for these workers or what happened to them.

It is our position that all workers working at any factory and/or workplace must be directly employed by the said company operating the said factory. It matters not how you got your workers, but the moment they do start working they become your workers, and the employer, in this case Asahi Kosei (M) Sdn. Bhd, is fully responsible for these workers. The company should pay salary directly to the worker, and ensure that all workers working for them enjoy all rights, benefits and other entitlements due to workers under the employer-worker agreements, collective bargaining agreements covering the said factory, and existing rights guaranteed under the Malaysian law to workers.

Workers working in a factory should also have the right to join the said factory’s in house union, and also regional/state/national unions covering the sector in which the factory operations come under.

It is very wrong, and certainly anti-worker anti-trade union if employers can shirk responsibilities justly owed by the said employer, by stating that these migrant workers were not under the direct payroll of the company, but under the employ of some other person and/or company.

Workers working at any particular factory should all be paid directly by the said company, and not through any other third party. All workers who work in a particular factory should be accorded equal treatment, and that includes equal pay for equal work, and also equal entitlement of rights.

The Malaysian Federal Constitution guarantees equality, and even the Employment Act 1955, in section 60L, clearly promotes anti-discrimination of workers, and gives the right of all workers, whether local and/or foreign, the right to lodge complaints in the event of discrimination on the basis of nationality of the said worker.

The power that workers and trade unions have when it comes to dealing with their employers is worker action, which includes strikes, and if the Malaysian government permits a new class of workers to be working at a workplace, who are workers of some other third party, then it just weakens the power of workers and/or their unions in demanding better rights and benefits from their employers.

The Malaysian government tried to legalise the practice of using workers of some third parties at the workplace by the introduction of ‘contractors of labour’, through D.R.25/2010 Employment (Amendment) Bill 2010, that was tabled in Parliament in July 2010 but due to public pressure, this Bill was withdrawn.

The Malaysian Trades Union Congress has also came out repeatedly against this practice of using workers of third parties, and has called for an immediate revocation of licences of all labour outsourcing companies. Since demands made by unions to the Malaysian government have not yet borne fruit, maybe it is time for MTUC and other trade unions to take this obviously pro-employer government to court on this matter.

It may be all right for agents and companies to assist companies in identifying and providing workers for companies, but the moment the companies accept these workers, there must immediately be an employment agreement and relationship with all these workers directly and the said company. The workers thereafter are the workers of the said company, and the company shall be fully responsible for the recognition and protection of all workers’ rights.

Any good company that respects universally accepted human rights and workers’ rights will not resort to using workers of another at their factories, and will not shirk their responsibilities to their workers with claims that they are not their workers, and when there are allegations of workers’ rights violations to try and divert this responsibility to workers to some other third party.

The current action of Asahi Kosei (M) Sdn. Bhd, in attempting to go after human rights defenders, worker rights activists and advocates, in this case Mr Charles Hector, with threats of a legal suit is so wrong and against public interest. The intention here seems to be an attempt to silence these persons and organisations from highlighting workers’ rights and human rights violations.

Allegations of human rights and worker rights violations should rightly be dealt with by companies through negotiations with workers and/or trade unions, using the available mechanisms and not by targeting those that highlight these violations be they bloggers, media agencies, civil society organisations or even individuals, who do have a moral obligation and duty to bring to public notice any perceived wrongdoing, human rights violations and workers’ rights violations.

We note also that this matter of rights violation at Asahi Kosei, is the subject matter of a Joint Media Statement, currently endorsed by about 80 civil society organisations.

We call for an immediate and unconditional withdrawal of this threat of a legal suit and/or any legal action (if it has already been commenced) against Charles Hector.

We call on Asahi Kosei (M) Sdn Bhd, to also take direct and full responsibility for all workers working in their factory, and not try to shift blame to some other third party. We hope that Asahi Kosei (M) Sdn Bhd, will do what is necessary, including reinstating the two migrant workers that have been stopped from working by reason of their refusal to sign a new ‘contract’ forced on them.

Syed Shahir Syed Mohamud
Executive Secretary, National Union of Transport Equipment & Allied Ind.Workers
Former President of Malaysian Trades Union Congress (MTUC)

Friday, February 18, 2011

$3.2m lawsuit for defending Burmese migrants (DVB, 16/2/2011)

$3.2m lawsuit for defending Burmese migrants thumbnail
Lawyer Charles Hector, who is facing a $3.2 million lawsuit (WH4C)
Published: 16 February 2011

A Malaysia-based Japanese multinational is lining up a multi-million dollar defamation lawsuit against a lawyer who is defending a group of Burmese workers threatened with deportation.

Electrical components’ company Asahi Kosei has denied allegations lodged by lawyer Charles Hector that it attempted to deport two workers back to Burma. The two men are among 31 who complained that their employers at the company had broken contractual obligations, including a refusal to pay the agreed salary.

Hector, who is defending the 31, went public with the allegations after receiving no response to a letter sent to Asahi Kosehi on behalf of the workers. He mustered the support of some 77 organisations in multiple countries who composed a media statement on the 11 February, as well as writing a post on his blog. It was after this that Asahi Kosei responded with their MYR10 million ($US3.27 million) legal threat.

“The attempt to go against human rights defenders personally is an attempt to suppress the public interest function that human rights activists play in highlighting violations of human rights visited on marginalised people by the bigger, more powerful employer companies,” said Pranom Somwong of the Workers Hub for Change (WH4C).

According to Malaysian government statistics, there are close to 100,000 registered Burmese workers in the country, comprising some five percent of the total registered workers. Rights group say however that hundreds of thousands additional migrants from Burma are unregistered. Given the sketchy legal status of many, violations of labour rights are believed to be common.

The situation between the 31 Burmese and their employers turned nasty on 7 February, a week after they filed their complaints, when a mob escorted by police arrived at their hostel in the Balakong township of Selangor, Malaysia, and threatened them. The mob then cut the electrics and walked off with household appliances, such as the hostel’s television and cooking utensils.

Mirroring a recent incident in Johor in Malaysia, the police allegedly nabbed two of the workers’ leaders, Thiha Soe and Aung San. They believed they were being taken to Kuala Lumpur International Airport, WH4C says, but managed to escape.

The following day the workers submitted a complaint to the Human Rights Commission of Malaysia (SUHAKAM) and were preparing a complaint for the labour ministry when on 9 February they were given a new contract to sign. Accompanying the contract however was an ultimatum that if they refused to sign, they would be deported to Burma immediately.

Twenty-nine of the workers signed under pressure but Thiha Soe and Aung San refused. They were then separated and handed over to the recruitment agents who took them to unknown locations, possibly with a view to sending them back to Burma.

Asahi Kosei makes parts for a number of international brands, such as JVC, Seiko, Hitachi, Mitsubiushi, Philips and Sharp. It has denied all allegations, and told Hector that it had made all payments to the recruitment agents, thereby passing the blame onto them. But a subsequent letter sent by the veteran lawyer to the company was ignored, prompting him to go public with the case.

“The fact of the matter is that workers in a company should be the responsibility of the said company, and they cannot just avoid responsibility by saying that these are not their own workers but workers of some other company,” said Pranom.

Related post:-

Asahi Kosei threathens legal action against Charles Hector

Asia-Japan Women's Resource Center (AJWRC) makes it 82 - Asahi Kosei statement