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Court case in Malaysia highlights migrant rights abuses
Irrawaddy - June 2, 2011
Neil Lawrence, Kuala Lumpur – On Feb. 7, 2011, a group of men, including uniformed police officers, entered a dormitory for workers at a factory in an industrial estate on the sprawling outskirts of Kuala Lumpur.
They were there to deal with a "situation": 31 Burmese migrant workers who were unhappy about their wages – which they said were far less than they were told they would receive before they arrived in Malaysia six months earlier – and various deductions imposed on them by their employer, including a penalty of nearly two days' pay for each day of work they missed.
The men who suddenly confronted the workers warned them that they would be sent back to Burma if they continued to press their demands. They also confiscated the workers' cooking utensils and cut off their power.
And then, to give weight to their threat to deport the workers, they hauled two of them away and drove them to Kuala Lumpur International Airport. The two were actually checked in on a flight to Rangoon, but somehow managed to escape before they could be put on the plane.
In itself, this episode is far from remarkable. In a country with an estimated 1.9 million registered migrant workers, and perhaps double that number of undocumented foreign laborers, employers routinely use the threat of repatriation to keep workers in line.
As one factory owner casually remarked to this reporter: "Sure, if they cause any trouble, we send them back." (He went on to say that Burmese workers were especially "aggressive" and reckless with their "investment" – the often large sums of money they are required to pay for the privilege of working overseas.)
What makes this incident significant, however, is the fact that it has become the subject of a multimillion-dollar lawsuit that could, by going to the courts, expose widespread abuses associated with a controversial labor practice that has become increasingly common in Malaysia in recent years.
The practice is the use of "outsourcing companies" to not merely recruit workers, but to actually act as their employers, effectively removing the companies that hire them from any direct contractual obligations to the workers. Unlike traditional employment agencies, which under Malaysian law are entitled to a fixed fee based on the agreed-to wages – paid for by the employee, employer, or both – outsourcing companies continue to collect a proportion of the money paid as labor costs for the duration of the worker's period of employment, while the actual owner of the workplace assumes no responsibility for ensuring that workers' legal rights are respected.
In the current court case, however, it is not the workers' rights that are at issue. The plaintiff is not the workers – who have also taken their case to the Malaysian Human Rights Commission (SUHAKAM) and the Labor Department and appealed to the Malaysian Trade Union Congress for assistance – but Asahi Kosei (M) Sdn. Bhd., a subsidiary of Asahi Kosei Japan Co., Ltd., a supplier of electronic and automotive parts to a number of major international companies, including Hitachi, Sony, Toshiba, Toyota, General Motors, Ford and Chrysler.
And the defendant is not the outsourcing company that allegedly used intimidation against the Burmese workers, but Malaysian lawyer Charles Hector Fernandez, a respected human rights advocate who has been accused of maliciously defaming Asahi Kosei in his account of what happened on Feb. 7 and in the subsequent days.
According to Asahi Kosei's lawyers, Hector erred not in his description of actual events on his blog, charleshector.blogspot.com – which the company has neither disputed nor confirmed – but in his characterization of Asahi Kosei as the employer of the workers who were harassed and later coerced into signing an agreement that made minor concessions but still fell well short of their original contracts. The company has disavowed any involvement in these matters, and is suing Hector for 10 million ringgit ($3.3 million) for libel.
The case has attracted considerable attention, not only because of its broader implications for Malaysia's labor market, which is heavily dependent on foreign workers, but also because of the way that Asahi Kosei has pursued its legal action against a human rights defender who has highlighted the plight of workers at the company's factory.
Although Hector contacted the company for comment and clarification on the events of Feb. 7 before writing about them on his blog the following day, he heard nothing from Asahi Kosei until Feb. 14, when he received a letter of demand written three days earlier that threatened to sue him if he didn't pay 10 million ringgit, remove the offending blog posts and issue a formal apology.
What the company didn't say at this time, however, was that it had already filed a lawsuit against Hector on the 14th, and on the same day sought an ex-parte order from the court requiring him to remove the posts. This ex-parte order – which does not require the presence of both parties, and is normally reserved for cases in which there is a risk of the defendant destroying evidence or otherwise obstructing proceedings – was granted on the 17th, but not served until the 21st, the day that Hector first learned that he was being sued.
As the Asian Human Rights Commission noted in an April 4 statement on the case, the timing of these actions suggest that they were "done deliberately to prevent [Hector] making a defense for himself or having the opportunity to be heard. The legal action was taken before he could respond to their first demand."
Both in his original appeal to prevent the deportation of two other workers who refused to accept an offer of a slight increase in wages (which simultaneously erased these gains by eliminating shift allowances), and in his subsequent legal battle, Hector has gained broad support from local and international civil society organizations. Since the case started drawing attention, more than 90 groups (including Japanese trade unions, who Asahi Kosei has also threatened to sue) have signed a joint statement expressing solidarity.
Another ally is the Malaysian Bar, which represents about 12,000 Malaysian lawyers. On March 14, at its 65th Annual General Meeting, it voted unanimously to assist Hector in defense of his right to use his blog to report on abuses as they are occurring. It has also sent observers to attend pre-trial hearings.
A number of Western governments have also taken a keen interest in the proceedings. The European Union and the governments of Belgium, Denmark and Norway have all sent representatives to the hearings, and the matter has also been raised in the UK Parliament.
The court, however, seems less sympathetic. It ruled against an application to dismiss the Feb. 17 ex-parte order, which included a gag on all public communications related to the case, but limited the ban to Hector's blog and Twitter account. However, in explaining her decision, Judge Lim Yee Lan also appeared to question whether Hector, as a blogger, is entitled to the same free-speech rights as newspaper publishers, since he is not in the "business" of keeping the public informed.
Such decisions do not bode well for Hector and other Malaysian human rights defenders. According to Hector, the best hope at this stage is for Asahi Kosei to drop its lawsuit, which is set for trial on June 28-29. He added, however, that if the case does go ahead, it could help to bring some much-needed attention to two important issues: the role of human rights defenders in Malaysia, and the legal status of outsourcing companies, which he maintains are not sanctioned by the country's labor laws.
The court "may not give the best judicial decisions, but at least [if this case] comes out, it may have an effect on public perception, which would have an effect on government policies and maybe even laws," Hector said in a recent interview with The Irrawaddy.
But, he added, there is a danger that the focus will be too narrowly focused on his own immediate situation, while the broader – and much more contentious – issue of how migrant workers are brought into the country and often exploited will be largely overlooked.
"My concern is that it might be shifting to look only at the human rights defenders and forgetting the employment relationship issue," he said.
To ensure that this doesn't happen, Hector said that in his countersuit – he is also suing Asahi Kosei for libel, for a letter the company wrote to its customers calling his allegations groundless and "unverified" – he will call on the court to make a decision as to whether outsourcing companies can legally act as employers. If not, Asahi Kosei's argument that it is not the employer of the workers, and therefore not responsible for how they are treated, falls apart; and outsourcing companies, which have long taken advantage of their legally ambiguous status, will be subject to the same laws as other employment agencies.
The question of how these companies are supposed to function has already begun to attract some high-profile attention. Last year, Deputy Prime Minister Tan Sri Muhyiddin Yassin told Malaysia's New Straits Times that the government never intended for outsourcing companies, which started coming into existence five or six years ago in response to growing demand for foreign workers, to act as employers.
"We feel that employers are the people who should be responsible for their foreign workers. Outsourcing companies are only responsible for bringing them in. After that, employers must assume full responsibility," said Muhyiddin in a May 2010 interview.
Two months later, however, a bill was tabled in Malaysia's Parliament that would effectively allow outsourcing companies to act as employers. But this bill was withdrawn in October following protests from trade unions, and that is where the matter has stood until now.
One problem with treating outsourcing companies (which Hector regards as a misnomer, since it is usually work that is outsourced, and not workers) as employers is that they are not engaged in any productive economic activity apart from finding workers and bringing them to Malaysia.
"Outsourcing companies are just offices. They don't have plantations, they don't have factories. They don't have any actual jobs," said Hector.
In some instances, according to Hector, the outsourcing companies haven't even lined up work with other companies, leaving the workers to support themselves until jobs can be found for them. "You've got this whole dumping of, let's say, 1,500 workers. When they come here, they can't find a job," said Hector.
Besides adding to the insecurity inherent in arrangements made through outsourcing agents, many of which Hector described as fly-by-night operations, such "dumping" of migrant workers also contributes to the growing problem of undocumented foreign labor in Malaysia. Indeed, with few guarantees that they will be fairly treated even if they do have valid work permits – which can be withdrawn at any time by employers, without consultation with the affected employees – there is little incentive for migrant workers to remain in legal but often lower-paying jobs.
It remains to be seen whether the Asahi Kosei case – which raises the issue of outsourcing companies, but doesn't address it directly – will succeed in bringing some much-needed attention to Malaysia's many migrant labor problems. But Hector believes that whatever flaws there may be in how the country deals with such issues, there is at least a chance that they can be resolved in the courts and through the concerted efforts of civil society. After all, he said, "This isn't Burma."
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