20th December 2024: FMT – Air-con giant Daikin comes to rescue of unpaid modern slavery victims and foreign Kawaguchi workers (Kawaguchi supplies Sony, Panasonic and Daikin – Daikin smallest buyer)
PETALING JAYA: Daikin Industries Ltd, the world’s largest air-conditioner manufacturer, has contributed US$12,000 to the 251 foreign workers who went without salary for seven months.
Original Source: FMT by Sean Augustin – 20th December 2024
The Osaka-based conglomerate said the funds were to purchase food and other related aid, according to migrant labour rights activist Andy Hall.
FMT 22nd Dec 2024: Resolve migrant worker pay issues to avoid economic jeopardy, says ex-MP
Hall said Daikin Industries informed him that they were “immediately releasing” the funds today.
He said he is finalising an agreement with a local charity to help with the distribution of the food to the workers at Kawaguchi Manufacturing Sdn Bhd tonight.
The donation comes in the wake of a protest by hundreds of workers outside the Kawaguchi factory in Port Klang earlier today, after they claimed food aid was halted last night.
FMT has contacted Kawaguchi for comment.
Hall said the sum would be “sufficient to cover the workers’ essential food costs, and some basic medical aid” for the next seven days.
The time frame coincides with the purported deadline for the labour department to legalise the foreign workers and find them new jobs.
He said he was informed of the deadline by union leader N Gopal Kishnam, who had met with the labour department’s director-general earlier today.
Gopal, the secretary general of the Malaysian chapter of IndustriALL – a global union federation – said all 251 workers “would be taken up by a new employer”.
“There’s no need to worry,” he told Hall in a text message.
Hall said he was grateful for Daikin’s response.
“Daikin has shown considerable leadership throughout this dispute and should be praised for its offer at this time of crisis,” he said.
Yesterday it was reported that Kawaguchi agreed to pay their 251 foreign employees up to seven months of overdue salaries.
The company reached the decision five days after the workers held a peaceful protest outside the factory in Port Klang to demand their owed salaries.
They had complained about unpaid wages totalling more than RM3 million since May.
Kawaguchi is reported to be a supplier of components to Sony, Panasonic, and Daikin. The three firms said in September they were looking into allegations of delayed salary payments, forced labour practices, and human rights violations at the company.
20th Dec 2024 – “Seven months of unpaid wages: ‘When will I be free?’” Malaysia: Report on Kawaguchi (Sony, Panasonic, Daikin and Hisense/Sanden supplier) released by PARC
By Andy Hall / 20/12/2024
We change. We change the world.
Asia Pacific Resource Center
Research December 20, 2024
“Seven months of unpaid wages: ‘When will I be free?’” Malaysia: Report on Kawaguchi (Sony, Panasonic, Daikin and Hisense/Sanden supplier) released
Sourced from: https://parc-jp.org/research/kawaguchi20241220/
Kawaguchi Manufacturing SDN BHD, a plastic parts manufacturer in Malaysia, has been found to have engaged in practices that could lead to forced labor, including long-term unpaid wages and confiscation of visas for migrant workers. The company has been found to produce parts for major Japanese companies such as Sony, Panasonic, and Daikin, as well as parts for the Hisense Group.
The involvement of these labor practices in the supply chains of Japanese companies is not only a serious violation of domestic and international guidelines on business and human rights, but the problem lies in the attempts to resolve it.
After the problem was discovered, each end product manufacturer conducted an investigation and even acknowledged the existence of the problem, but Sony and Panasonic stopped doing business with Kawaguchi one after another without bringing about any solution to the situation, and then Daikin also stopped production. Although these Japanese companies had been able to obtain cheap parts for many years thanks to exploitative labor, when the problem came to light, they decided to withdraw without contributing to the settlement of unpaid wages for the workers.
This kind of irresponsible withdrawal also violates domestic and international guidelines for multinational corporations. Each company should make good faith efforts to improve the situation, and evading responsibility by suspending transactions is not permitted.
With the end of the year fast approaching, workers are on the verge of being left out in the cold with months of unpaid wages. We call on Japanese companies to act responsibly, even now.
The Pacific Asia Resource Center (PARC) has translated and published a report by Andy Hall, an expert on migrant labor, which describes the illegal labor practices at Kawaguchi, the voices of the workers, and the history of the problems occurring locally. Please download the full report from the link below.
Report (Japanese language): “Seven months of unpaid wages: ‘When will I be free?’” – Report on allegations of forced labor and exploitation at Kawaguchi Manufacturing SDN BHD – https://files.parc-jp.org/docs/kawaguchi_report_JP1220.pdf
PARC will continue to closely monitor the situation on the ground and will continue to work to urge Japanese companies to settle as soon as possible the unpaid wages owed to workers who have been in business with the company up until now.
kawaguchi_report_JP1220.pdfDownload
Unfortunately, there are many other such illegal labor practices in Asia. Please support PARC’s activities by becoming a member, donating, or becoming a monthly supporter so that we can continue to investigate, disseminate information, and support the movement to win workers’ rights.
Additional Background Readingon Kawaguchi:
FMT 22nd Dec 2024: Resolve migrant worker pay issues to avoid economic jeopardy, says ex-MP
Malay Mail 19th Dec 2024: Malaysian Labour Dept to assist Kawaguchi workers securing new jobs, firm agrees to settle over RM3m backdated pay in agreement described as ‘offensive,’ global buyers Sony, Panasonic and Daikin remain silent
Malay Mail 18th Dec 2024: Electronics maker faces Labour Dept inquiry Over RM806,310 in unpaid wages, substandard housing to Bangladeshi workers
NST 17th Dec 2024: 8 investigation papers opened against Kawaguchi, accomodation providers
ABC 15th Dec 2024: Sony, Panasonic ‘cut and run’ from Malaysian supplier Kawaguchi accused of wage theft
18th Oct 2024: Sony admits own audit found probable labour code violation by Malaysian contractor Kawaguchi
19th Sept 2024 Malay Mail: Panasonic, Sony and Daikin vows probe into forced labour claim against Malaysian contractor
17th Sept 2024 FMT: Japanese electronics giants probe Malaysian supplier Kawaguchi after delayed salary payments
BHRRC 17th Sept 2024 – Malaysia: Plastics co. supplying to Panasonic, Sony & Daikin accused of violating rights of Bangladeshi workers; incl. indicators of forced labour; incl. cos. responses
6th Sept 2024: Malay Mail – Malaysian HR Ministry opens probe into slave labour claims against contractor (Kawaguchi) for Sony, Panasonic and Daikin
5th Sept 2024: FMT – Malaysian labour dept probes Bangladeshi workers’ forced labour claims
31st Aug 2024 Somoy News: Bangladeshi workers in Malaysia remain unpaid for 5 months
Updated Japanese company responses also available on BHRRC site
Malaysia: Plastics co. supplying to Panasonic, Sony & Daikin accused of violating rights of Bangladeshi workers with indicators of forced labour; incl. cos. responses
We are all living a miserable life in Malaysia, not being able to eat, pay our debts and send money to our families.
Migrant worker, Kawaguchi Manufacturing
In September 2024, it was reported that over 200 Bangladeshi workers employed by Kawaguchi Manufacturing, a plastics company in Malaysia, have been experiencing human rights violations, including several indicators of forced labour. Kawaguchi allegedly supplies to major electronics firms, including Panasonic, Sony and Daikin, according to the Malay Mail.
Free Malaysia Today reported that migrant rights activist Andy Hall shared interviews with workers alleging labour rights abuse, including:
- Wage theft: the workers say they have not been paid for six months, which has caused distress on both them and their families back home.
- Recruitment fee charging: the workers say they were charged high fees for their jobs and took out loans to cover the fees.
- Denial of leave: the workers say they are forced to work seven days a week without public holidays or overtime pay. In one video, a worker says he is forced to work 12 hours a day.
- Unsuitable living conditions: the workers say they live in overcrowded and unhygienic accommodation.
- Failing to renew visas: some of the workers are allegedly without visas as the company failed to renew them. This has left them undocumented and vulnerable.
- Intimidation: the workers who raised concerns have been threatened with detention, deportation and police action. Four workers have been sent back to Bangladesh “as punishment”, according to Free Malaysia Today.
- Passport confiscation: the company allegedly withheld workers’ passports.
The Selangor labour department is now investigating the allegations.
The Malaysian based plastics industry, which is indeed an essential part of many international companies and brands globally supply chains and finished products, currently consists of conditions prevalent for systemic migrant forced labour.
Andy Hall, migrant worker activist
In September, the Business & Human Rights Resource Centre invited Daikin, Panasonic, and Sony to respond to the findings, and: a) confirm whether they still source from Kawaguchi Manufacturing, and/or the date when they stopped sourcing from the company; b) disclose any human rights due diligence they undertake prior to entering into contracts with suppliers and when monitoring working conditions at suppliers; c) disclose the steps they have taken to investigate the abuse reported; and, d) disclose the steps they have taken to remedy workers for the fee-charging, intimidation of protesting workers, and wage theft.
Daikin, Panasonic and Sony’s responses can be read in full below.
The Resource Centre was not able to contact Kawaguchi Manufacturing to invite a response to the allegations; if a response is received in future this page will be updated accordingly.
In October 2024, Daikin and Sony disclosed updates on their investigations into the case. Their updates can be read in full below.
Towards the end of November, Malaysian news outlets reported on workers’ concerns that buyers were halting sourcing from the factory in light of the ongoing allegations, citing moulds and other equipment being removed from the factory. About 60 workers at the time of that reporting had filed four separate reports with the labour department, claiming they are still owed unpaid wages and unauthorised salary deductions of almost USD180k.
The Resource Centre to all three buyers for a second time to understand how any exiting was being undertaken in line with responsible procurement principles. We asked the companies to confirm whether they had terminated sourcing, when this occurred, and which stakeholders were consulted in the decision-making. Panasonic confirmed it had completed all payments and accepted delivery delays from Kawaguchi, but was engaging “other suppliers who can provide the parts for the products currently being ordered by our customers, to whom certain molds were transferred”. Sony said it “had to conclude to discontinue the transaction with the company”. In its response, Daikin highlighted that its orders from Kawaguchi only account for 1-2% of its orders and stated the company would be unable to support Kawaguchi on its own, once Sony and Panasonic stopped sourcing from the factory.
Timeline
- 2nd Daikin response re concerns of contract cutting at Malaysian manufacturer where migrants alleged forced labour5 Dec 2024 Type: Company Response
- 2nd Panasonic response re concerns of contract cutting at Malaysian manufacturer where migrants alleged forced labour5 Dec 2024 Type:Company Response
- 2nd Sony response re concerns of contract cutting at Malaysian manufacturer where migrants alleged forced labour28 Nov 2024 Type: Company Response
- Update: Panasonic disclosure re-allegations of labour rights abuse of Bangladeshi workers at Malaysian supplier28 Nov 2024 Type: Company Response
- Factory workers file claim over RM800,000 in wage arrears, deductions28 Nov 2024 Type: Company Response
- Fifty-seven say they are worried Kawaguchi Manufacturing Sdn Bhd’s three major clients might cut ties with them over forced labour allegations.
- Letter from Responsible Business Alliance re alleged forced labour at members’ supplier, Kawaguchi ManufacturingDate:26 Nov 2024 Content Type: Disclosure
- Sony admits own audit found probable labour code violation by Malaysian contractorDate:18 Oct 2024 Content Type: Article
- Update: Sony disclosure re-allegations of labour rights abuse of Bangladeshi workers at Malaysian supplierDate: 16 Oct 2024 Content Type: Disclosure
- Update: Daikin disclosure re-allegations of labour rights abuse of Bangladeshi workers at Malaysian supplierDate: 4 Oct 2024 Content Type: Disclosure
- Panasonic, Sony and Daikin vows probe into forced-labour claim against Malaysian contractorDate: 19 Sep 2024 Content Type: Article
- Japanese electronics giants probe M’sian supplier after delayed salary paymentsDate: 17 Sep 2024 Content Type: Article
- Panasonic response to allegations of labour rights abuse of Bangladeshi workers at Malaysian supplierDate: 17 Sep 2024 Content Type: Company Response
- Sony response to allegations of labour rights abuse of Bangladeshi workers at Malaysian supplierDate: 13 Sep 2024 Content Type: Company Response
- Daikin response to allegations of labour rights abuse of Bangladeshi workers at Malaysian supplierDate: 12 Sep 2024 Content Type: Company Response
- HR Ministry opens probe into slave labour claims against contractor for Sony, Panasonic and DaikinDate: 6 Sep 2024 Content Type: Article
- Labour dept probes Bangladeshi workers’ forced labour claimsDate: 5 Sep 2024 Content Type: Article
- Bangladeshi workers in Malaysia remain unpaid for 5 monthsDate: 31 Aug 2024 Content Type: Article
Key Response Documents and Files
20241204_RESPONSE_DAIKIN_resend.pdfDownload
Panasonic – Status update on Kawaguchi 28.11.2024 1.docxDownload
20241128_Sony_Response.pdfDownload
11.19.24 Notice Letter to Sony, Panasonic and Daikin.pdfDownload
Kawaguchi Forced Labor Updated 5th Nov,24.pdfDownload
RBA_Letter_to_BHRRC_regarding_Malaysia_Supplier_26-Nov-24.pdfDownload
𝐋𝐋𝐑𝐂 𝐂𝐀𝐋𝐋𝐒 𝐎𝐍 𝐇𝐔𝐌𝐀𝐍𝐑𝐄𝐒𝐎𝐔𝐑𝐂𝐄𝐒 𝐌𝐈𝐍𝐈𝐒𝐓𝐄𝐑 𝐓𝐎𝐈𝐌𝐌𝐄𝐃𝐈𝐀𝐓𝐄𝐋𝐘 𝐈𝐍𝐓𝐄𝐑𝐕𝐄𝐍𝐄 𝐈𝐍𝐓𝐇𝐄 𝐊𝐀𝐖𝐀𝐆𝐔𝐂𝐇𝐈 𝐖𝐎𝐑𝐊𝐄𝐑𝐒‘ 𝐏𝐑𝐎𝐓𝐄𝐒𝐓
Media Statement issued by Labour Solidarity and Learning Resources Association (LLRC, previously known as the Labour Law Reform Coalition) at Kuala Lumpur on 14th December 2024
Since the Port Klang labour department raided Kawaguchi Manufacturing Sdn Bhd in September and found evidence of forced labour and the company’s failure to pay workers’ wages for five months, no concrete remedies have been provided to the plastics factory workers.
Yesterday, 200 Bangladeshi migrant workers at Kawaguchi staged a protest at the factory when they were informed that the company would only pay back wage arrears in September 2025. The workers blocked the building, prevented executives from leaving, and requested a negotiation with the management.
There seems to be no end in sight to the Kawaguchi workers’ crisis and the allegations of forced labour. This situation highlights the limited impact of the National Action Plan on Forced Labour on real cases where workers are denied justice. It threatens to tarnish Malaysia’s international reputation and undermine foreign investors’ confidence in the country.
The Labour Solidarity and Learning Resource Association (LLRC) therefore calls on Human Resources Minister Steven Sim to immediately intervene in the Kawaguchi workers’ protest and take decisive action to ensure all Kawaguchi workers receive their unpaid wages and other owed benefits.
Furthermore, given that some of Kawaguchi’s main customers have terminated their business relationships with the company, there is a possibility it may close down. In such a case, the Human Resources Ministry must facilitate alternative employment opportunities in Malaysia for the affected migrant workers. Deporting these workers without addressing their grievances would be unjust and could push them into debt bondage, as many have taken on exorbitant loans to secure employment in Malaysia.
Additional Background Reading on Bangladesh Malaysia migration syndicate:
FMT 7th July 2024: Use independent experts for migrant system audit, says anti-graft group
MALAYSIAKINI 6th July 2024 C4CENTER COMMENT: Massive migrant labour recruiting issues, cops must probe
NST 6th July 2024: Probe foreign labour recruitment misgovernance highlighted by PAC, govt urged
FMT 6th July 2024: Anti-corruption watchdog demands action over govt-Bestinet deal
Malay Mail 6th July 2024: Home minister says will review PAC criticism over migrant worker system launched without contract
Star 5th July 2024: Mutual termination clause in Bestinet contract puts Putrajaya in ‘challenging position’, says Public Accounts Committee report
4th July 2024 BSS News – Expatriates Minister Shofiqur directs returning money to workers who failed to go to Malaysia
4th July 2024 New Age – Bangladeshi Agencies must refund workers unable to go to Malaysia by July 18: ministry
FMT 4th July 2024: Govt urged to heed PAC’s call on migrant worker system
Star 4th July 2024: Human Resources Ministry to conduct internal audit
Star 4th July 2024: PAC uncovers serious flaws
FMT 3rd July 2024: Decide quickly on direction of migrant worker system in Malaysia, Public Accounts Committee tells govt
Vibes 3rd July 2024: Foreign worker management system operating 6 years without a contract
3rd July 2024: The Edge – Public Accounts Committee chastises govt for running foreign worker recruitment system for six years without contract
Malaysiakini 3rd July 2024: BESTINET Probe – Public Accounts Committee chief says ‘Datuk Amin’ not among witnesses
3rd July 2024: The Star – Bestinet told Public Accounts Committee unauthorised users were approved by HR Ministry personnel, report shows
FMT 2nd July 2024: Tenaganita letter to Editor – TIP upgrade no cause for celebration just yet
30th June 2024: Somoy News – Bangladeshi High Court orders disclosure of action on Malaysia migrant worker scam (with 500,000+ victims) in 7 days
Malay Mail 25th June 2024: Home minister sees good things for Malaysian businesses after upgrade to US trafficking ranking
The Star 25th June 2024: Malaysia will strive to reach Tier 1 in Trafficking In Persons report, says Saifuddin
Scoop 25th June 2024: Nation’s improved Tier 2 human trafficking ranking ‘dangerously misleading’, says activist
See also MALAYSIAKINI 25th June 2024: M’sia doesn’t deserve Tier 2 in US human trafficking ranking – activist
Daily Star 26th June 2024: Rights activists criticise Malaysia’s improved ranking
See also Benar News 24th June 2024: Malaysia advances in US State Dept’s world rankings for anti-human trafficking efforts
See also FMT 24th June 2024: Malaysia upgraded to Tier 2 in US human trafficking report
See also Benarma 25th June 2024: Malaysia upgraded to Tier 2 in U.S. TIP Report
See also Focus Malaysia 25th June 2024: Migrant workers’ activist – Malaysia doesn’t deserve Tier 2 upgrade in 2024 US human trafficking report
See also 25th June 2024: Home Ministry welcomes country’s Tier 2 upgrade on Trafficking in Persons 2024 report
See also FMT 25th June 2024: Home ministry open to working with NGOs against human trafficking
See also Star 25th June 2024: Malaysia upgraded to Tier 2 in latest Trafficking in Persons report
SCMP 25th June 2024: Malaysia’s upgrade in US human trafficking index decried as ‘disappointing’ amid migrant worker woes
24th June 2024 Exclusive Analysis: CNA – Extension of Malaysia’s controversial migrant labour ecosystem (involving BESTINET) a blow to PM Anwar’s reform agenda
See New Strait Times 24th June 2024: Malaysian Government Forms Committee to Review Terms of Bestinet’s 3 Year Extension
FMT 24th June 2024: Bestinet contract extended, confirms Saifuddin – ‘Home minister Saifuddin Nasution Ismail says the Cabinet decided in principle on the extension ‘several weeks ago’.
Malay Mail 24th June 2024: Home Minister – Bestinet keeps foreign worker system contract for three more years, but with stricter terms
Bernama News 24th June 2024: Committee set up to Peruse Terms and Conditions of BESTINET Contract
FMT 24th June 2024: Bestinet to surrender control of workers management system under new deal
FMT 24th June 2024: Bestinet should be phased out eventually, says ex-MP
Malaysianist 18th June 2024: Minting money from a migrant services monopoly (click to subscribe for full article)
9th June 2024 Daily Star – Labour Recruitment from Bangladesh to Malaysia: Syndicate wins, migrants suffer, country loses(excellent summary how bad triumphed, carnage resulted – Bangladesh and Malaysia MUST be downgraded to Tier 3 in the upcoming U.S. TIP report!)
Dhaka Tribune 11th June 2024: Deadline extended for Malaysia migration hurdle complaints
Business Standard 11th June: Unrest within Baira over Malaysian labour market, ruckus in AGM as committee members assaulted
Observer 9th June 2024: Around 2,900 complaints lodged by deprived Malaysia-bound migrants
Malaysianist 6th June 2024: The fat cat ruling the Malaysian migrant services roost(allegations of systemic corruption involving Malaysia’s migrant worker management systems – click to subscribe)
Business Standard 5th June 2024: Govt to take action over failure in sending workers to Malaysia: PM Hasina
4th June 2024 Daily Star (Op Ed): Break the syndicates, not the dreams of Malaysia-bound workers
SCMP 4th June 2024 – In Malaysia, business and human rights must go hand in hand, UN rights chief says in KL press conference against backdrop of systemic migrant worker abuses
New Straits Times 4th June 2024: Human rights-centric practices essential for foreign investment, says UN
4th June 2024 Business Standard: NHRC orders probe into alleged embezzlement of Tk150cr from Malaysia-bound workers
4th June 2024 Business Standard: 47,809 Bangladeshis flew to Malaysia in May – highest since labour market reopened in 2022
Daily Sun 3rd June: IRREGULARITIES IN MIGRATION TO MALAYSIA – Recruiting agencies never made accountable(good historical summary)
Business Standard 4th June 2024:Dhaka-20, Feni-2 MPs deny allegations of involvement in embezzling money from Malaysia-bound workers
SCMP 3rd June 2024: ‘Nothing left for me’ as thousands of Bangladeshi workers lose everything in failed bid to work in Malaysia
Daily Star Editorial 3rd June 2024: Must our migrants pay the price every time?
Prothomalo 3rd June 2024 – Bangladesh Labour market: Hapless workers lose all vying to go to Malaysia
Daily Sun 3rd June 2024: IRREGULARITIES IN MIGRATION TO MALAYSIA: Recruiting agencies never made accountable
FMT 3rd June 2024: 17,000 Bangladeshi workers stranded, Dhaka pleads for time
Daily Star 3rd June 2024: 16,970 Bangladeshis failed to reach Malaysia for mismanagement, more destitution and modern slavery will result
Daily Star 3rd June 2024 – Bangladeshi Migrant Worker Exploitation and Malaysian Labour Market Alleged Criminal Syndicate: The agencies picked by KL to blame, Bangladesh tells UN OHCHR
Daily Star 2nd June 2024: Controversial recruitment system to stay 3 more years
Daily Star 2nd June – Jobs in Malaysia: Mismanagement left over 3k workers with no ticket to KL
Daily Star 1st June 2024: Must history repeat itself with the Malaysian labour market’s alleged criminal syndicate trafficking Bangladeshi migrant workers for forced labour
MALAYSIAKINI June 1st 2024: Controversial worker management system BESTINET gets new lease, sources say
1st June 2024 Kalerkantho: Malaysia’s dream ends in deprivation for Bangladeshi migrant workers of criminal syndicate
FMT 31st May 2024: Expect Bangladeshi workers to be stranded and at high risk of modern slavery following Malaysian migration management deadline rush, warns activist
No Ko SCMP 31st May 2024: Malaysians shocked by thousands of Bangladeshis crowding at airport to beat deadline for legal work, as UN and activists warn of increased modern slavery risks
