Social compliance audit downgrades Top Glove

LEADING glovemaker, Top Glove Corp Bhd, had its rating downgraded from A to D in an audit for social compliance.

Top Glove was downgraded in the Amfori Business Social Compliance (BSCI) audit following a review which claimed that there was no evidence to support the A rating given in June.

“In relation to the Top Glove facility audit rating, the modification of result A to D follows a thorough review of the facility’s audit report.

“Due to a lack of supporting evidence for the conclusions indicated in the audit report, the audit result of that facility was reviewed,” Amfori was reported saying.

Amfori is a global business association that champions trade as means of economic growth, innovation and job creation, to alleviate poverty across the world.

It also provides audit on workplace standards across the global supply chain and deal with human rights violations.

The audits return a rating of A to E, along with plans for improvement.

News portal Malaysiakini first broke news on Top Gloves’ rating downgrade this morning.

Amfori, however, noted the rating only provided a snapshot of the working conditions at the Top Glove facilities during the time of the audit.

“Our auditing results do not provide a long-term view of a factory group such as Top Glove, which manufactures products from a large number of facilities,” it said.

Top Glove have yet to comment on the matter.

In July, Malaysiakini reported that Amfori was reviewing the A rating given to one Top Glove’s facility after it learnt the audit was not conducted unannounced.

The unannounced or surprise audit was a requirement after the facility received a poor score in a separate audit in 2018.

Resolving human rights abuse claims

However, this condition was not met and Amfori had since stopped working with the audit firm involved.

Top Glove is currently facing an import ban by the US Customs on allegations of using forced labour.

The claim was made based on fees paid by migrant workers to recruitment agents, which is seen to lead to debt bondage and is a marker of forced labour.

Top Glove had since committed to refunding up to RM160 mil of the “recruitment” fees to workers, adding that its future recruitment methods would ensure its employees will not have to pay hefty fees.

The glove maker cited the A rating given by Amfori BSCI to rebut claims of human rights violations.

Recently, the Employees Provident Fund (EPF) raised its stakes in Top Glove by purchasing an additional 51.35 million shares, raising its holdings to 5.67% as at Oct 27 compared with 5.05% as at Sept 21.

Yesterday, FocusM quoted Crewstone International chairman Datuk Jalilah Baba as saying that there was nothing unusual about EPF raising its stakes in Top Glove as many others were doing the same. Read the story here.

Top Glove recorded a quarterly net profit of RM1.29 bil in its 4Q FY2020, a staggering 1,642% from RM74.16 mil a year ago. The sizzling performance also drove its FY2020 net profit 412% higher to RM1.86 bil from RM364.67 mil during its previous financial year. – Nov 2, 2020

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