Dyson parted ways with Malaysian suppliers, sparking concerns about the treatment of migrant workers Reuters

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© Reuters. On November 28, 2021, a security guard stands in front of the Dyson office in Senai, Johor, Malaysia. The photo was taken on November 26, 2021. REUTERS/A.Anantarakshmi

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A. Ananthalakshmi and Liz Lee

Johor Bahru, Malaysia (Reuters)-Dyson’s new headquarters in Singapore is not far from the border and is a new city built around its business: the Malaysian industrial zone is dominated by its largest supplier, ATA IMS Bhd.

ATA is one of Malaysia’s top electronics manufacturing service providers, leveraging Dyson’s success in high-end vacuum cleaners and air purifiers to provide parts for a company that accounts for 80% of its revenue.

Ten current and former employees and a former ATA executive stated that the cost of growth is invisible: it is mainly due to the fact that migrant laborers work up to 15 hours a day, are often asked to skip rest days to keep up with demand, and receive guidance Conceal the true working and living conditions from labor inspectors and Dyson.

In interviews in the past two months, employees also stated that ATA employs thousands of foreigners without work permits. Analysts call ATA the largest global OEM manufacturer for Dyson.

After a question from Reuters on November 18, Dyson said last month that it would withdraw its business https://www.reuters.com/business/exclusive-dyson-terminates-relationship-with-malaysian-supplier-ata-over- labour- 2021-11-25 Six months later from ATA, citing a recent independent audit of workers’ conditions and allegations by an unidentified whistleblower.

ATA said in a statement that it has been audited by the Responsible Business Alliance (RBA), an organization in which electronics companies are widely involved in factory audits. RBA hires a third-party auditor to conduct inspections. It declined to comment.

On November 29, ATA stated that it had seen Dyson’s audit summary, which found problems such as poor living conditions, fear of retaliation and unpaid allowances. It described the findings as “inconclusive” and said it is reviewing them. Reuters did not see the audit.

ATA declined to comment and asked Reuters to refer to its recent public statement.

Dyson said on Tuesday that it would not comment because these allegations are related to ATA.

Malaysia said on Wednesday that it will charge ATA https://www.reuters.com/business/malaysia-charge-dyson-supplier-ata-over-labour-complaints-minister-2021-12-01 Ministry of Labor. It did not state what the allegations or complaints were about, or whether it was related to the workers’ allegations against the Dyson factory.

The country’s Minister of Human Resources, M. Saravanan, stated that the forced labor charges by Malaysian companies are damaging foreign investors’ confidence in the products manufactured there. He earlier stated that the government is investigating Dyson’s decision https://www.reuters.com/markets/europe/analysts-see-years-losses-malaysias-ata-after-major-client-dyson-cuts-ties -2021- 11-26 separated from ATA.

After Dyson’s move, ATA’s stock price fell 60%. Some analysts questioned ATA’s ability to attract new customers https://www.reuters.com/markets/europe/malaysias-ata-falls-analyst-airs-concern-after-dyson-rift-2021-11-30 , The company predicted in a statement on November 29 that revenue will fall and costs will be cut.

With Dyson’s departure, the six workers and shopkeepers interviewed in the Johor Bahru Industrial Zone expressed that they were worried that they might lose their livelihoods.

On a recent Sunday, an ATA worker wearing his royal blue factory work shirt said: “No job can be found here.” Like everyone else, he asked not to be named for fear of retaliation.

ATA officially employs approximately 8,000 employees. Although ATA has four employees, the former executive estimates that until recently the number of employees was as high as 17,000, including those without a license. According to workers and executives, most of the 17,000 people are from Bangladesh and Nepal.

Record revenue

ATA’s factories are concentrated in the neighboring Johor Bahru suburban industrial park, a 30-minute drive from Singapore, where Dyson’s headquarters are located.

ATA announced a record 4.2 billion ringgit (US$991.7 million) in revenue for the fiscal year ending in March. Dyson, owned by British billionaire James Dyson, accounts for nearly $800 million of that.

Analysts said that increased scrutiny of Malaysia may increase production costs and deter investors. In the past two years, the United States has banned six Malaysian companies for forced labor.

“The cost will definitely rise because more care must be taken, not only in terms of recruitment, but also in terms of workers’ accommodation. The consequence is a significant increase in labor costs,” said Vincent Khoo, Head of Malaysia Research at UOB Kay Hian. .

Malaysia produces everything from iPhone components to semiconductors, and particularly relies on electrical and electronic manufacturing to promote exports and economic growth. Between January and October 2021, such products accounted for 36% of total exports.

According to government data, foreigners account for about 10% (1.48 million) of the Malaysian labor force, but this proportion is even higher in the manufacturing industry. The government and labor groups estimate that there are still millions of undocumented immigrants.

‘We need your cooperation’

According to ATA and Dyson, until recently, the audit of ATA has not found any problems. ATA stated in May that the 2020 audit gave ATA full marks for working conditions. Dyson did not confirm this score.

The employees told Reuters that the ATA supervisor would instruct factory employees what to tell the auditors. The two said that their supervisor told them that if they tell the truth about working conditions, Dyson will cut orders with ATA.

In July, an ATA supervisor instructed the employees of the WhatsApp team to tell the auditors that they would not work on Sundays and that they would not work more than 3 hours of overtime each day. The supervisor did not respond to multiple calls from Reuters. According to workers and pay slips seen by Reuters, workers often work on Sundays and work overtime for up to 6 hours.

“We need your cooperation… please introduce to all employees… to avoid problems during the audit,” read the message dated July 2 seen by Reuters.

The employees also stated that prior to the audit, the factory had been cleaned up and distributed safety equipment, and workers without a permit were required to stay away.

Employees said that when Dyson officials visited, ATA stopped working on Sunday and reduced overtime hours. ATA and Dyson declined to comment.

U.S. detection

According to Andy Hall, an independent labor rights activist seeking an investigation, the U.S. Customs and Border Protection (CBP) launched an investigation into ATA in April for unethical recruitment practices and poor working and living conditions. He showed Reuters a letter dated April 19 informing him of the investigation. CBP declined to comment.

Dhan Kumar Limbu, a 32-year-old Nepalese national, said that people who worked with Hall contacted him in April as part of his investigation of ATA. Limbu said he shared with them detailed information about working and living conditions. Hall confirmed Limb’s statement.

Limbu said that in June, ATA officials took him to the police station, where he was asked about sharing information with activists and then beaten by the police. He fled Malaysia and now returns to Nepal. Limb told Reuters that he briefed Dyson’s lawyers on ATA’s working conditions in an interview on October 1.

Dyson did not name the whistleblower, but said in a statement to Reuters last month, “We immediately commissioned an international law firm to conduct a full investigation and provide support to the whistleblower so that they can assist Investigate.” Dyson did not specify which company it retained.

ATA also hired a law firm to review Limbu’s claims, and said in a statement last week that preliminary findings indicate that “the allegations may be unreasonable.” The police said they are investigating https://www.reuters.com/world/asia-pacific/malaysia-police-look-into-claim-ata-whistleblower-beaten-by-police-2021-11-27 to defeat Limbu .

Employees stated that since the allegations came to light in May, ATA has begun to make some changes, when it publicly denied the allegations of https://www.reuters.com/article/us-malaysia-labour-ata-idUSKCN2D21D2 for the first time. According to Limbu, other workers and payrolls seen by Reuters, the company reimbursed some workers with 7,000 ringgits in July to cover the costs they paid to labor brokers in their home countries.

Workers said that ATA also stopped hiring foreign workers without a permit and closed a dormitory packed with 60 people.

Limbu and other employees interviewed by Reuters stated that Dyson should stay to ensure that the working and living conditions of migrant workers are improved.

“My intention in sharing information is to improve workers’ conditions and get rest days. But now Dyson’s decision is that people will lose their jobs,” Limb said.

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