Analysis | How rising labour abuse charges threaten to derail Malaysia’s export-led economy

As Malaysians shun labour-intensive work, the country’s electronics and palm oil firms especially are relying on migrants, whose treatment is gaining scrutiny

Experts warn if Southeast Asia’s third-biggest economy does not reform its labour laws, businesses could move to other countries

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Labourers work at a construction site in Kuala Lumpur, Malaysia. Photo: Reuters

Published: 1:15pm, 21 Dec 2021

Malaysia’s government and companies must address mounting allegations of workplace abuse of migrant labourers who fuel the country’s economy, or face risks to its export-reliant growth model, experts warn.

Malaysia has for decades banked on migrant workers to power mainstay manufacturing and agriculture, becoming an integral part of the global supply chain for products as diverse as semiconductors, iPhone components, medical gloves and palm oil.

But as the reliance on foreign labour has increased, so have complaints of abusive working and living conditions for workers, who come mainly from Indonesia, Bangladesh and Nepal.

Southeast Asia’s third-biggest economy must reform its labour laws and improve enforcement, while companies should invest to ensure better conditions, said 11 analysts, ratings agencies, researchers, corporate consultants and activists.

In the past two years, seven Malaysian firms, including the world’s biggest glove maker and palm oil producer, have faced US import bans over allegations of forced labour. Last month, hi-tech home-appliance maker Dyson Ltd cut ties with its biggest supplier, a Malaysian firm, over labour conditions.