Company’s practices amount to systemic forced labour and are in compliance with Malaysia Labour Law

Statement available at Bursa Malaysia
https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3265312

PRESS STATEMENT
FOR IMMEDIATE RELEASE

JOINT STATEMENT BY SKP AND INDEPENDENT MIGRANT WORKER RIGHTS SPECIALIST MR. ANDY HALL

TÜV RHEINLAND COMPLETES INDEPENDENT THIRD-PARTY SOCIAL COMPLIANCE (FORCED LABOUR) AUDIT – established that the company’s practices do not amount to systemic forced labour and are in compliance with Malaysia Labour Law

Johor Bahru, 2 June 2022 – Electronics Manufacturing Services (“EMS”) provider in Malaysia, SKP Resources Berhad (“SKP” or the “Group”) today announced that TÜV Rheinland Malaysia Sdn. Bhd. (“TÜV Rheinland”) has completed a comprehensive independent third-party social compliance (forced labour) audit of its labour practices and operations.

This collaboratively developed and specifically designed forced labour audit took two months to complete, covering six (6) of SKP’s subsidiaries hiring non-Malaysian workers, beginning in early April 2022 and completed in May 2022.

TÜV Rheinland was tasked to examine and identify during this audit whether SKP and its subsidiaries were involved in practices that may be considered any of 11 indicators of forced labour, as defined by the International Labour Organization (“ILO”). The audit company was also requested to verify whether these subsidiaries had all carried out an adequate remediation programme with respect to repayment of recruitment fees previously paid by foreign workers to recruitment intermediaries.

To recap, Independent Migrant Worker Rights Specialist Mr Andy Hall highlighted to SKP in December 2021 concerns regarding SKP’s management of its foreign workers, in particular relating to overtime work and adequate remediation of recruitment fees. SKP immediately and proactively reached out to Mr Hall and has continued positive, constructive discussions with him since that time.

Fruitful discussions between Mr Hall and SKP led to the appointment of TÜV Rheinland as an independent third-party social compliance (forced labour) auditor to conduct a thorough investigation into foreign worker living and work conditions across SKP and its subsidiaries. The scope and breadth of the audit was agreed upon by SKP and TÜV Rheinland, in close consultation with Mr Hall. Full findings of the audit report were transparently shared with Mr Hall once the audit was completed, and Mr Hall participated fully in the opening and closing meetings for the audit.

TÜV Rheinland reported in its final audit that considerable improvements have been made since December 2021 with regards to working hours, overtime work processes and adequate remediation of recruitment fees at SPI Plastics Industries Sdn Bhd, which was the company that was the original source of the complaints by Mr Hall.

TÜV Rheinland also verified that SKP had now completed its remediation programme across all of its subsidiaries and that all foreign workers have been fully reimbursed for all recruitment fees previously paid to recruitment intermediaries at a justifiable and reasonably calculated level.

TÜV Rheinland conducted interviews with approximately 8% of SKPs total foreign workforce, with translation support and foreign language interviewers allowing for foreign workers to respond easily to auditors questions in their native languages. Workers reported during the audit several positive experiences and examples of good practice in living and working across SKP’s subsidiaries.

The final audit report by TÜV Rheinland highlighted some minor findings regarding working hours, accommodation and effective communication. The company provided recommendations for improvement which were positively acknowledged, with appropriate actions taken immediately by SKP. TÜV Rheinland also noted the further progress that SKP has made regarding the ILO’s forced labour indicators and, taking into account these ongoing efforts, established that the company’s practices do not amount to systemic forced labour and are in compliance with Malaysia Labour Law.

SKP’s Executive Director, Mr Ivan Gan said, “Having examined the findings in detail on completion of this audit, SKP management is pleased with the outcome. This whole exercise has shed light on some shortcomings of our business operations and more importantly, the significant improvements that have been made. Specifically, all workers have now been fully reimbursed for all recruitment fees previously paid to recruitment intermediaries, and working hours and overtime issues have been addressed. Both of these issues are those which Mr Hall constructively raised to us previously.”

“Additionally, interviews conducted with our workers also yielded positive feedback. Workers were increasingly satisfied with their working conditions and well-being as employees of SKP.”

“The findings of this audit is another step forward that will enable SKP to achieve our ESG objectives.”

“SKP appreciates the concerns highlighted by Mr Hall, and our management and Board wish to acknowledge his invaluable contribution. Mr Hall has played an important and entirely voluntary role in working with SKP to determine the scope and implementation of this specialist audit. I would like to express my gratitude to Mr Hall as the guidance he has given myself and SKP management team has been constructive and comprehensive. He has had a profound impact on the way we view sustainability and how we value and promote the rights of our foreign workforce.”

“Mr Hall’s relentless dedication and persistence to the cause of furthering migrant worker rights has cemented his place as a strong advocate for their welfare. He is a true thought leader in the field.”

“SKP has emerged from this whole process of engagement with Mr Hall and from this specialist forced labour audit as a better and more responsible corporate citizen. I would like to assure all our stakeholders that the well-being of all of our employees remains an upmost priority to SKP.”

“SKP’s commitment to upholding the best practices in all aspects of our business has enabled us to build a stellar track record with our MNC clients over the last 25 years.”

Mr Andy Hall, Independent Migrant Worker Rights Specialist said, “SKP’s openness and willingness to address issues I highlighted during my dialogue with the company is welcome and admirable. That positive and constructive attitude to engage a ‘critical friend’ has led to where we are today.”

“SKP has been transparent throughout this audit process and I commend their commitment to share the full findings of this audit report with me. The completion of this audit is yet another positive chapter in their ESG story. I am satisfied with the implementation and the outcome of this audit.”

“All social compliance audit methodologies have their strengths and weaknesses. Importantly, audit findings only represent a snap shot of working and living conditions in a company at the time they are conducted. However, I am confident both from my engagement with SKP, taking into account the findings of this independent audit, as well as when also considering information gained from my own reliable sources and networks, that SKP’s subsidiaries subject to this recent forced labour audit by TÜV Rheinland do not at this time have systematic forced labour issues in their operations.”

“I commend SKP’s ongoing commitment to the decent work agenda also. Many improvements have been made and gaps significantly narrowed since I engaged the company 6 months ago. SKP have kept to their word and have put in place various action plans that will further significantly benefit the well-being of their foreign workers. I have importantly highlighted to SKP areas for potential industry leadership into the future, including: the need to pay a living wage; always ensure decent working hours; improve accommodation further; provide more comprehensive incentives to workers; guarantee even more ethical recruitment; and to ensure more effective workplace social dialogue.”

“I have confidence that SKP will continue to uphold ethical labour practices and be a leader for social compliance in the EMS marketplace. The strides that SKP have taken over this period of our engagement together are exemplary and have certainly garnered my endorsement.”

About SKP RESOURCES BERHAD

SKP is one of the leading Electronics Manufacturing Services (EMS) providers in Malaysia, as well as one of the top 50 EMS in the world, principally involved in the manufacturing of plastic components, precision mould making, advance secondary processes, sub-assembly of electronics equipment and full turn-key contract manufacturing.

For more information, kindly visit: https://www.skpres.com/

For media enquiries, kindly contact:

Name : Mr. Kau Wai Faun
Email : kauwf@skpres.com
Office : 07- 433 1273
Mobile : 012 – 712 0087

Andy Hall
Migrant Worker Rights Specialist
+977 (0) 98234 86634 (Mobile/Whatsapp)
@atomicalandy (Twitter)
Andyjhall1979@gmail.com

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