Proposed EU ban on products made by forced labour may impact Malaysia

MALAYSIA must tread carefully by not undermining the latest European Union (EU) proposed import ban on products made by forced labour lest the country risks losing a lucrative market, particularly for its electrical and electronic (E&E), glove and palm oil-related products.

Stressing that human dignity and freedom were more important than making money, the European Commission president Ursula von der Leyen in mooting the ban, has further noted:

“Global trade around the world is good and necessary, but can never be done at the expense of people’s freedom and dignity. We will propose a ban on products made with forced labour,” she said in a policy speech at the European Parliament in Strasbourg.

Andy Hall

“The EU is the world’s largest trade block and a leading importer of goods made from systemic forced labour in Malaysia,” international migrant worker rights specialist Andy Hall told FocusM.

“Unless the situation of corruption and rampant abuse of migrant workers in Malaysia is urgently addressed, Malaysia alongside China will be one of the first countries to have the EU’s import ban imposed on its companies for their complicity and role in forced labour produced goods entering the EU.”

The latest European Commission’s stance comes after months of pressure from the European Parliament, in particular the Greens/EFA Group.

In March 2021, the European Parliament asked the European Commission to table a proposal for an instrument for an import ban for goods linked to severe human rights violations such as forced labour – as a complementary tool to the upcoming European human rights and environmental due diligence legislation.

Just one month earlier in February, the Greens/EFA Group had published a study which examines legal options for an EU import ban on products linked to forced labour.

The Economic Club of Kuala Lumpur (ECKL) advisory council chairman Tan Sri Abdul Wahid Omar has said that Malaysia needs to reform its labour policies to address matters including the country’s foreign worker issue which needs immediate attention amid forced labour allegations against oil palm planters and rubber glove manufacturers.

“This (immediate attention) is [needed] because in line with global commitment towards environmental, social, and governance (ESG), many global businesses will exclude companies that are accused of engaging in forced labour practices and modern slavery from the supply chain.

“If this spreads to the electrical and electronics (E&E) sector, the damage will be irreparable,” said Abdul Wahid, who is also Bursa Malaysia Bhd chairman.

Bilateral trade between Malaysia and the EU stood at €35.2 bil (RM173 bil) in 2020, according to the latest statistics by the European Commission.

The trade balance is in Malaysia’s favour whereby EU imports from Malaysia totalled €24.7 bil in 2020 (RM121.4 bil) while EU exports totalled €10.5 bil (RM51.6 bil).

With so much at stake, the relevant Malaysian authorities must step up their monitoring on industries that rely on manual labour to ensure that they strictly comply with global standards on the treatment of their workforce.

Against the backdrop of a pandemic-ravaged economy, Malaysia can ill-afford to lose a lucrative market just because of some bad hats who prioritise profit ahead of treating their workforce in a much more humane manner. – Sept 16, 2021

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