US ban on Malaysian glove exporter affects Nepalis

The recent suspension of exports from the Malaysia-based WRP Asia-Pacific, a glove manufacturer, by the US Customs and Border Protection (CBP) Detention Orders has been hailed as a milestone in the fight against forced labour and has potential implications for Nepali migrant workers.

WRP Asia Pacific was accused of using of forced labour at its plants in Malaysia, and the order has reverberated throughout the rubber manufacturing sector in the country which accounts for 65% of the global glove industry.

The company was thrust into the limelight earlier this year after a strike by over 2,000 Nepali and Bangladeshi workers who said they had not been paid for months was widely reported in the media.

"We held a strike for two days, and resumed work only after our Embassy intervened and the employer was forced to pay our due wages. We have been paid in a timely manner since then, but we don’t know what this ban will mean in the future," said Ram Rai, a Nepali worker.

The reports led Malaysia’s Ministry of Human Resource to investigate the case and file a court case against WRP Asia Pacific. The move by CBP is per the US Trade Facilitation and Trade Enforcement Act which considers the import and sale of goods produced by forced labour illegal.

Other countries also have laws for due diligence in global supply chains like the French Corporate Duty of Vigilance Bill or the UK's Modern Slavery Act that hold parent companies liable for activities of subcontractors and suppliers.

The CBP order also includes suspension of imports from four other countries including China (garments), Brazil (bone charcoal), Democratic Republic of Congo (gold) and Zimbabwe (diamonds). Such laws can impact hundreds of thousands of Nepali migrant wormers who are involved in the lower rungs of the supply chain in ‘dangerous, dirty and difficult’ jobs.

It is difficult for the Nepal government to unilaterally monitor compliance of labour standards by sourcing companies outside its jurisdiction. Furthermore, given that migrant workers are deprived of freedom of association in many destination countries, avenues for collective bargaining via unions remains weak.

The Nepal government has tried to go around the limitations by requiring joint liability of Nepal-based recruitment agencies and foreign employers. This allows domestic recruiters to be held accountable for non-compliance of contractual terms by the foreign employer. Licensed recruiters contribute to escrow deposits, the amount of which was recently increased with th eForeign Employment Act amendment, so workers are compensated in case of exploitation.

However, a case like the ban on the Malaysian employer has a much larger impact on creating systemic changes down the supply chain. These reforms require consumer pressure and sanctions that keeps profit-motivated employers alert to damage to their reputation.

Malaysia is now proposing a new chapter on forced labour in its Employment Act, and pushing companies to conduct social audits which they have been trying to put off.

MOUs that Nepal recently signed with several destination countries including Malaysia include provisions on employer pays principle, timely payment of wages and occupational health and safety measures. Platforms like the Colombo Process that includes 12 labour-exporting Asian countries could do more to collectively bargain for basic worker rights such as freedom of association and the right to legally change employers. Such regional platforms could counter specific common challenges, and pursue it until the needle moves from complacency to compliance.

However, bilateral, regional and global mechanisms for transnational migration governance are difficult to implement given their legally non-binding nature which translates to minimal consequence of non-compliance. But a case like the WRP can help create an enabling environment to safeguard the welfare of often-overlooked workers, and could set a precedent for systemic reforms in labour migration.

Some names have been changed. Views are personal.