Eastspring Investments: Responsible Investment Report 2022
22
Company C
Company C is an Electronics Manufacturing Services (“EMS”) company. In May 2021, US Customs and Border Protection initiated an investigation into a Malaysian EMS company which has been accused of using forced labour. In November 2021, a high-tech home appliance maker terminated its contract with the company following an audit of its labour practices and whistleblower’s allegations. Recognising that EMS companies in Malaysia typically have high migrant workers ratio in the workforce, we believe other EMS companies could face similar scrutiny which could result in significant reputational risk and potentially loss of revenue if their labour practices are perceived to be below expectations. This engagement is an extension of our wider engagement on this topic. Since 2021, we have conducted several engagements with two Malaysian EMS companies to understand how well they were managing migrant workers related issues. These engagements included 1-to-1 meeting and small group discussion with their senior management. We also engaged relevant specialist to understand expectations on migrant worker rights and the status quo in Malaysia. Both EMS companies have made notable progress in 2022 with social compliance audit in place and found no systemic forced labour practices based on 11 indicators of forced labour set out by the International Labour Organization (“ILO”). Recruitment fees paid by workers to recruitment intermediaries have been fully reimbursed and other gaps identified were resolved or supported by immediate remedial actions. We are satisfied with the audit findings and actions taken by both companies and will continuously monitor their ongoing efforts on migrant workers related issues.
Labour practices and working conditions
Eastspring Malaysia
Made with FlippingBook - Share PDF online