FMT 7th Jan 2025: Kawaguchi foreign workers in Malaysia preparing to sue 2 prominent Japanese companies, Sony and Panasonic, in U.S. courts

PETALING JAYA: The 251 foreign workers previously employed by Kawaguchi Manufacturing Sdn Bhd, who went seven months without pay last year, intend to drag two prominent Japanese companies to court in Washington DC.

Migrant worker rights activist Andy Hall says the 251 Bangladeshi nationals will sue the Japanese companies in the US.

Original Source: FMT by Sean Augustin – January 8, 2025

The workers, all Bangladeshi nationals, plan to sue the Japanese companies, alleging exploitation, mistreatment, and non-payment of wages, according to independent migrant worker rights activist Andy Hall.

Workers allege they were forced by JTK officials to relocate to this non compliant accomodation and job on 30th Dec, and their passports were again from them

FMT is withholding the identity of the two firms.

Japanese companies, Sony and Panasonic, in U.S. courts

Hall also said the workers, who engaged a US-based lawyer in mid-December last year, will be seeking damages, compensation and an apology from these two Japanese companies.

It is understood that the foreign workers will be seeking damages in excess of the sums they had requested from the Japanese companies during recent failed negotiations.

Hall is currently assisting prominent Washington DC-based lawyer Terrence P Collingsworth in coordinating the legal arrangements.

The suit will be filed in the US “hopefully in the next week or so”, he told FMT.

Workers protest outside Kawaguchi factory on 20th Dec 2024

Hall said the foreign workers had on Dec 27, through Collingsworth, filed a formal complaint against the two firms with the Organisation for Economic Co-operation and Development in Tokyo, Japan.

Japanese companies, Sony and Panasonic not constructively engaging

“Neither of the Japanese companies is engaging constructively with Collingsworth, so we are forced to escalate the matter,” he said.

The two Japanese companies, he added, had previously offered to pay each worker only RM20,000 and had failed to support their re-employment, food or medical related needs over the recent festive period.

He said the RM20,000 sum was insufficient even to cover loans the workers had taken out to cover the recruitment fees and related expenses they incurred to come to work at the Kawaguchi factory.

“In fact, a number of workers are still in significant debt and at risk of debt bondage.

‘’It is unclear whether the labour tribunal agreement from Dec 18, which could theoretically see Kawaguchi pay workers their back wages by November 2025, will ever be paid. Hence the need to take more affirmative action on behalf of the workers,” said Hall.

On Dec 18, it was reported that Kawaguchi had agreed to pay its foreign employees their overdue salaries, with the Putrajaya labour office agreeing to arrange for them to be employed by other companies.

The company reached the decision five days after the workers held a peaceful protest outside the factory in Port Klang to demand the salaries owed to them.

FMT 31st Dec 2024: Kawaguchi workers ‘forced’ to relocate, claims activist (Sony, Panasonic and Daikin Malaysian supplier case)

Original Source: FMT by Faisal Asyraf – December 31, 2024

PETALING JAYA: A large number of foreign workers at Kawaguchi Manufacturing Sdn Bhd who have not received their wages for seven months have been “forced” to accept jobs at other companies, claims human rights activist Andy Hall.

Andy Hall says many of them have had to take on new jobs but were not able to negotiate the terms of their employment.

kawaguchi protest — Most of the affected foreign workers have moved out of a hostel where they have been staying. (Andy Hall pic)

Some of the allegedly non compliant accomodation JTK forced Kawaguchi workers to relocate to on 30th Dec 2024

He told FMT that the workers were interviewed yesterday by at least six companies at the firm’s factory in Port Klang, but were in no position to negotiate the terms of their employment.

Hall claimed the workers had signed certain documents, believed to be employment contracts, but had yet to be given copies.

“The workers have not been given the terms and conditions of employment, and no other information has been made available,” he said, adding that the workers were left without any option but to take up whatever employment was given to them.

Hall said most of the affected workers were assigned jobs with various companies and were asked to leave their hostel on the same day.

Kawaguchi worker protests 20th Dec 2024

He said a total of 82 workers were assigned to a plantation company in Cameron Highlands, and were expected to be transported to their new workplace today.

Only 18 workers have remained at their hostel in Port Klang, waiting for a flight back to Bangladesh.

“They (companies and authorities) came (yesterday) morning. We were shocked. We do not know what companies they are being sent to work for, or what their contracts and salaries are like,” said Hall.

He also claimed he had managed to get three internationally certified electronics and glove manufacturing companies to send official requests to the labour department expressing interest in taking in the displaced workers, but that the requests had not been acted on.

Hall said the workers were in fear of being exploited all over again.

“They are not comfortable taking on their new jobs as no agreement papers have been provided,” he said, but added that the workers did not appear to have a choice in the matter.

On Dec 18, it was reported that Kawaguchi had agreed to pay its 251 foreign employees their overdue salaries with the Putrajaya labour office agreeing to arrange for them to be employed by other companies.

The company reached the decision five days after the workers held a peaceful protest outside the factory in Port Klang to demand the salaries owed to them.

FMT has attempted to reach out to human resources minister Steven Sim for clarification.

Kawaguchi worker protests 18th Dec 2024

26th December 2024: FMT – Penniless and unemployed, Kawaguchi’s foreign workers in Malaysia hoping to secure jobs before Ramadan (Sony, Panasonic & Daikin supplier case)

Original Source: FMT by Faisal Asyraf – 26th December 2024

KLANG: More than 200 foreign workers at Kawaguchi Manufacturing Sdn Bhd, who had endured seven months without salaries, are clinging to the hope of securing new jobs before the fasting month of Ramadan begins in February next year.

The workers are also hoping to secure a job so they can repay their debts. Currently unemployed and penniless, their futures remain shrouded in uncertainty despite a recent mediation where Kawaguchi agreed to settle the overdue salaries sometime next year, beginning with RM1,000 on Jan 15.

One of the workers, known as Farouk, 37, said they were having sleepless nights, citing trust issues from past experiences. They fear they might not be paid at all.Kawaguchi worker protests 18th Dec 2024

Some of the allegedly noncompliant accommodation JTK forced workers to relocate to on 30th Dec 2024

“And our situation will worsen if the labour office fails to get us new jobs before the fasting month,” he told FMT.

Farouk said they were currently surviving on meals sponsored by Daikin Industries Ltd.

However, the US$12,000 donated by the air-conditioner manufacturer was only sufficient to buy food until Dec 29, he said.

Another worker, Mohosin, said the RM1,000 he expects to receive next month would be used to settle the debt he had with a sundry shop located near their hostel.

Kawaguchi workers protest in their accomodation on 20th Dec 2024

For the past seven months, Mohosin said he and other foreign workers had bought food and necessities from sundry stores on credit and had promised to pay the shopkeepers back by this month, having believed that their pay would come in by then.

Foreign workers thanking Daikin Industries Ltd for the financial aid which allowed them to buy food. (Pic by Andy Hall)

As the money did not come, the shops had stopped allowing them to buy on credit, he claimed.

Some of these workers FMT spoke to owe the shopkeepers at least RM500.

Mohosin said once they had settled their debts with the sundry shops, they would be able to send money to their families back home in Bangladesh.

“Our families have to resort to taking loans to survive. Hopefully, once we get a new job, we will be able to clear the loans,” the 38-year-old said.

Kawaguchi workers protests at the Kawaguchi company Dec 2024

Another worker, known as Nayem, 23, had mortgaged his family’s house to apply for a RM20,000 loan to come and work in Malaysia last year, with a huge chunk of the sum used to pay the agent there.

Time is running out for him as he’s unable to service the loan and help his family.

“I am the eldest of five siblings and they all rely on me to feed them. Usually, I would send my entire month’s salary and survive on overtime pay.”

Nayem is now worried that the bank will seize his house in Bangladesh and evict his family.

“Every day, I wait for some good news: that we will get a new job so that I can pay the loan and help my family.”

Last Thursday, it was reported that Kawaguchi had agreed to pay its 251 foreign employees overdue salaries for seven months.

The company reached the decision five days after the workers held a peaceful protest outside the factory in Port Klang to demand the salaries owed to them.

They had complained about unpaid wages totalling more than RM3 million since May.

Kawaguchi worker protests 18th Dec 2024

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)

Original Source: HERE by Sean Augustin – 20 December 2024

Daikin Industries Ltd gives US$12,000 to help 251 purchase food and aid items.Foreign workers protesting outside the Kawaguchi Manufacturing Sdn Bhd factory in Port Klang this evening. (Andy Hall pic)

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.

The Osaka-based conglomerate said the funds were to purchase food and other related aid, according to migrant labour rights activist Andy Hall.

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FMT 22nd Dec 2024: Resolve migrant worker pay issues to avoid economic jeopardy, says ex-MP

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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.

Kawaguchi worker protests 20th Dec 2024

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 December 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

Original Source: Research December 20, 2024

「賃金未払い 7ヶ月『自由になるのはいつだろう』」マレーシア：Kawaguchi社に関する報告書を公開

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 in 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.pdfDownloadKawaguchi workers thank Daikin for aid support.

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

FMT 18th Dec 2024: Kawaguchi to pay foreign workers’ owed salary in Malaysia after negotiations – Major Japanese conglomerates Sony, Panasonic and Daikin remain silent after unethical cut and run

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

17th Dec 2024: FMT Malaysian Labour dept promises justice for Kawaguchi Manufacturing modern slavery victims from Bangladesh on strike, Kawaguchi key customers were Sony, Panasonic, and Daikin

ABC 15th Dec 2024: Sony, Panasonic ‘cut and run’ from Malaysian supplier Kawaguchi accused of wage theft

15th Dec 2024: FMT – Ex-MP calls for ministry action after salary protest at Malaysia’s Kawaguchi plastics company supplying Japanese conglomerates Sony, Panasonic and Daikin

FMT 14th Dec 2024: Protest and alleged hostage taking at Kawaguchi plastics company in Malaysia by Bangladeshi migrant worker modern slavery victims over salary arrears – key Japanese buyers Sony, Panasonic and Daikin respond to BHRRC

26th Nov 2024: FMT – Worried Kawaguchi factory workers in Malaysia, producing Sony, Panasonic, Daikin and Sanden products, file a claim over RM800,000 (US$180,000) in wage arrears, deductions

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 (see below)

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.

Japanese companies Sony and Panasonic

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 Japanese 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.