Policy Insights: The Issues, Challenges, and Solutions For Forced Labour

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HRD Corp organised the National Forum Series in conjunction with HRD Corp Open Day in Penang on 10 March 2022. The forum featured the Minister of Plantation & Commodities together with industry representatives from International Labour Organisation (ILO), the United States (US) Embassy, the United Kingdom (UK) embassy and others. They discussed the National Action Plan on Forced Labour: From Planning to Action – Issues, Challenges and Solutions. The forum covered a wide range of issues around human capital development, specifically on the issues and challenges that lead to forced labour in the country.

– “Kasturi Devi CML”


Forced labour or Modern Slavery has long been a global systemic issue that causes a myriad of problems for developed and developing countries. The Global Estimates of Modern Slavery Report 2017 by the International Labour Organisation (ILO) defined Modern Slavery as covering a set of specific legal concepts including forced labour, debt bondage, forced marriage, other slavery, and slavery-like practices, and human trafficking. The ILO, in its Forced Labour Convention (1930) (No. 29) specifically defined forced labour as “all work or service which is exacted from any person under the threat of a penalty and for which the person has not offered himself or herself voluntarily.” In other words, a forced labourer is an individual who has been forced or threatened to perform a task without his / her consent.

Forced labour is a worldwide phenomenon where irresponsible employers take advantage of the vulnerabilities of their employees including the migrant population, and the illiterate, and enjoy the advantage of unpaid labour. This is because migrant workers are highly dependent on their employers for survival, leaving them with little bargaining power and limited protection against exploitation.

Based on the Global Estimates of Modern Slavery Report 2017, forced labour can be found in various forms, and practically all countries  across all economic activities. The typology depicted above, which was developed for the global estimates of forced labour, is based on three main categories of forced labour, defined as follows:

  • Forced labour exploitation, imposed by private agents including bonded labour, forced domestic work, and work imposed in the context of slavery or vestiges of slavery.
  • Forced sexual exploitation of adults, imposed by private agents for commercial sexual exploitation, and all forms of commercial sexual exploitation of children. This encompasses using, procuring, or offering children for prostitution or pornography.
  • State-imposed forced labour, including work exacted by the public authorities, military, or paramilitary, compulsory participation in public works, and forced prison labour.

The report also indicated that, in 2016, there were an estimated 40.3 million persons in modern slavery all over the world. 24.9 million of those are involved in forced labour.

There is no definition of forced labour in the Malaysian legislation. It is often associated with migrant workers, due to their vulnerability and the country’s high reliance on them in labour-intensive sectors and industries. Forced labour is a criminal offence, therefore it is usually prosecuted under the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007 (Act 670) (ATIPSOM Act). Forced labour comes in the form of exploitation in Section 2 of the Act which is defined as:

“Exploitation – like all forms of sexual exploitation, forced labour or services, slavery, or practices like slavery, servitude, any illegal activity, or the removal of human organs. Article 6 of the Federal Constitution prohibits all forms of slavery and forced labour except for compulsory service for national purposes”

The victims of forced labour may be coerced or tricked into their situation. Many are subjected to horrible living situations, bound by debt bondage, having their passports and wages withheld. These circumstances render it impossible for them to leave. Even those who tried risked being expelled as undocumented aliens by their errant employers or threatened with physical violence.

Many incidents are not reported as victims may be fearful to leave or report their employers to the authorities. They may also not be aware of the support and legal remedies available to them. Therefore, the issue may go unnoticed by the relevant parties and authorities.

As a result, the Ministry of Human Resources takes preventive measures against forced labour and is determined to combat the forced labour issues in Malaysia. In line with the government’s aspiration, HRD Corp has organised the National Forum Series in conjunction with HRD Corp Open Day in Penang on 10 March 2022.

The forum involved the Minister of Plantation & Commodities together with industry representatives from the International Labour Organisation (ILO), the United States (US) Embassy, the United Kingdom (UK) Embassy, and others engaged in an insightful discussion on the topic titled National Action Plan on Forced Labour: From Planning to Action – Issues, Challenges, and Solutions. The forum discussed a wide range of issues on human capital development, specifically the issues and challenges that lead to forced labour in the country.



Forced Labour from Plantation Industries and Commodities

The plantation and commodities industries in Malaysia generate huge revenues for the country, as it is the world’s second-largest producer of palm oil, the largest exporter of palm oil, and the largest glove manufacturer. The Ministry of Plantation Industries and Commodities (MPIC) announced in Bernama News published on 23 April 2022 that the commodity export value increased to RM31.61 billion in January-February 2022 compared with RM30.01 billion in the same period last year.

The total exports comprised palm oil at RM19.48 billion, rubber at RM6.79 billion, timber at RM4.13 billion, cocoa at RM1.15 billion, pepper at RM0.03 billion, and tobacco at RM0.03 billion. These industries must be protected for our comparative advantage to be sustained, especially when the economy is still in recovery after the pandemic.

Last year, the United States (U.S) Customs and Border Protection (CBP) banned the imports of palm products from FGV Holdings on suspicion of forced labour in its manufacturing process. According to the Agricultural Sector report 2021 published by the U.S. Embassy in Malaysia, the U.S. is one of the largest contributors to the country’s export earnings with $1.1 billion (RM4.87 billion) worth of agricultural commodities exports to the United States in 2020.

According to the US CBP website, the investigations have already prevented a total of eight Malaysian companies including two inactive and six active companies from the plantation and glove sectors respectively from entering the US market after being issued with the Withhold Release Orders (WROs). The two classed as inactive were Top Glove Corp Bhd and WRP Asia Pacific Sdn Bhd, while the other six are FGV Holdings Bhd, Sime Darby Plantation Bhd, Maxter Glove Manufacturing Sdn Bhd, and Supermax Glove Manufacturing, Smart Glove, Brightway Holdings Sdn Bhd and YTY Industry Holdings Sdn Bhd.

The allegations have led to an increase of queries from global investors about Malaysia’s labour practices. According to The Edge, other Asian manufacturing hubs, including China and Thailand, face similar accusations of labour abuse. However, investors have taken an immediate interest in the recent scrutiny of Malaysia, and this could affect future foreign direct investment and supply contracts.

During the forum, the Minister stated the importance of protecting the industry as it generates the second-highest income for the country. The Ministry understands that the Malaysian plantation industry depends on migrant workers and plans the manpower required for the industry to remain competitive with other countries. The employers are reminded to be unbiased and to treat migrant workers fairly as they had travel to a different country to work. As far as the Ministry is concerned, it is ready to go to any extent to overcome these issues.

The Minister believes that the solution is to develop a better understanding of labour issues. One of the issues could be the language barrier as Malaysia has received a lot of migrant workers from different countries with different languages. Due to this barrier, miscommunication among employers and employees was more likely to occur in the organisation and any negligence or complaints due to this miscommunication could be unfair.

Modern Slavery: The United Kingdom Perspective

The United Kingdom (UK) introduced the National Referral Mechanism in 2008 and subsequently established the Modern Slavery Act in 2015. Modern slavery is defined as the illegal exploitation of people for personal or commercial gain. It covers a wide range of abuse and exploitation including sexual exploitation, domestic servitude, forced labour, criminal exploitation, and organ harvesting. The impact of introducing the Modern Slavery Act of 2015 is positive in the UK, as it has increased awareness on modern slavery among the public. This has led to stricter law enforcement to combat it in the UK.

The UK government has made Malaysia one of its priority countries and sees an opportunity to work with the Malaysian government as well as the private sector to address the issues of modern slavery. The government is also ready to support the implementation of the National Action Plan, aid measures to increase the number of prosecutions and protect victims.

Under the Modern Slavery Act 2015, organisations conducting business in the UK with worldwide revenues of at least £36 million are required to publish a transparency statement describing the steps they have taken in the last financial year to ensure their business and supply chains are free from modern slavery and human trafficking.

From the business perspective, the requirement to address these issues is absolute, not just morally but also to attract investment from or, to do business in, or with the UK or many other countries with similar legislation and similar levels of public, political, and media awareness.



Combatting Forced Labour: The United States Perspectives

In an increasingly globalised world, the solution to the forced labour challenge must be aligned. Therefore, it is important to work together as an international community to solve the problem. The problem of forced labour or modern slavery is indeed immense. There is an estimated 25 million victims of forced labour around the world. These workers consist of men, women, and even children.

In Malaysia, forced labour allegations are usually linked with the recruitment and employment of migrant labourers. The actual number of migrant workers in Malaysia is approximately 2 to 3 million documented migrants and 3 to 4 million undocumented workers. These include domestic workers, stateless people, asylum seekers, refugees, and international students.

Many of these groups were living in poor conditions with unlawful passports, retention and deceptive recruitment, huge debt, no freedom of movement, and penalties for terminating contracts.

Eradicating forced labour is something the US government takes seriously, and several measures have been taken to address this issue. Several laws were enacted to penalise employers that place workers in forced labour conditions. For instance, The Trafficking Victims Protection Act (TVPA) aims to prosecute traffickers, prevent human trafficking, and protect its victims and survivors.

Additionally, the US government also provides support to those who are working in the US. In 2020, the Department of Justice contributed about USD75 million (RM331.84 million) to victim services and has offered financial support to non-governmental organisations (NGOs) in the US to develop various protections and support services.

The private sector may also play a key role in combating forced labour abuses in the supply chain. As a result, the US government has launched several initiatives aimed at encouraging the private sector to combat forced labour and adopt best practises for their employees.

The US government also recognises the role of labour unions in organising. Freedom of associations in the form of labour unions is central in protecting the rights and interests of workers. In the case of forced labour, unions can act as an additional voice to ensure that workers are compensated fairly for their work and that the workplace meets all necessary standards.

Data and report management, with a focus on obtaining data on forced labour in a worldwide context, is another important initiative undertaken by the US government. They also enacted the Trafficking Victims Protections Reauthorization Act (TVPRA) list, which will indicate the goods and countries where The Bureau of International Labor Affairs (ILAB) has recorded a significant incidence of child labour and forced labour without specifying the individual companies or businesses involved.

The United States (US) internal law enforcement also has far-reaching international effects. For instance, the US Trade Facilitation and Trade Enforcement Act prohibits all goods made by forced labour from being imported into the US. The importing countries need to find means to stop the product from using forced labour to gain market access to the United States. Since 2019, there have been 8 Withhold Release Orders (WRO) issues against Malaysia involving manufacturing and plantation industries. Two of the companies have improved their working conditions and have already gained freedom from WRO.

The US government also provides grants and schemes to stakeholders. The US state department has provided more than USD300 million (RM1.32 billion) in financial support to over 960 anti-trafficking projects worldwide. The NGO was also supported by the US Department of Labour, which provided USD10 million (RM44.24 million) to the ILO to support a programme to eradicate forced labour, as well as a USD5 million (RM22.12 million) grant to civil society organisations, last December. The bridge project for NAFPL was also supported by the US Department of Labour.

The US government also worked with the private industry in Malaysia to proactively solve the systematic issue of forced labour. These initiatives resulted in the decrease in forced labour within the employer’s supply chain. The employers also gained a competitive advantage in the export market by complying with the indicators.

International Labour Organization on Forced Labour

According to the ILO, there are 11 indicators of forced labour which are, the abuse of vulnerability, deception, restriction of movement, isolation, physical and sexual violence, intimidation and threats, retention of identity documents, withholding of wages, debt bondage, abusive working and living conditions, and excessive overtime.

Some people encounter significant challenges in accessing fair recruitment and equality due to the remoteness of work or discrimination of gender and ethnic group. In Sabah and Sarawak for instance, there are difficulties in accessing jobs and even if they do secure a job, it will be in a remote location or in poor conditions. Therefore, it is vital to look for decent jobs in plantations, and ILO is working to improve the labour migration mechanisms, develop tools for employers, build awareness, and encourage unionisation. ILO promotes productive employment and decent work in the plantation sector by expanding knowledge, strengthening constituent capacity, and providing technical assistance, with a focus on extending social protection and improving plantation workers’ organisation, working conditions, and productivity.

ILO Malaysia has undertaken several projects that look at fair recruitment, labour migration, skills development, and addressing child labour issues. The first project is the bridge project which is the core effort of the National Action Plan for Forced Labour (NAPFL). The ILO has also introduced a relatively new project with a shorter duration, targeted at advising oil palm sector workers in Malaysia and Indonesia. All of these efforts are aligned with NAPFL, in which workers can seek support if there is unfair behaviour among employers.

ILO also acknowledges that smallholders is a segment in the plantation sector that is relatively less supported. Smallholders play a significant role in the supply chain, but they receive less support and guidance from external sources since their influence is underestimated. They need more support from ILO, stakeholders, and the government to improve their labour practices.

ILO will reach out to the smallholders, especially those in Sabah to increase awareness of forced labour and child labour issues and try to find a solution to help them catch up with the current standards and prevent them from being left behind.


Action Plan and Recommendation

Target 8.7 of the 2030 Sustainable Development Goals (SDGs), outlines the commitment to ending modern day slavery and human trafficking by the year 2030. The target specifically calls for the states to take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking (by 2030) and secure the prohibition and elimination of the worst forms of child labour, including the recruitment and use of child soldiers, and by 2025 end child labour in all forms.

Meeting the ambitious 2030 target to end modern slavery will require renewed political will, matched by the commitment of sufficient resources, and a major acceleration of national and international efforts. To be effective, policies and programmes must be grounded in the best possible understanding of the root causes of modern slavery at both the national and global levels. This requires not only more and better information on the numbers of people affected by modern slavery, but also on its various forms and manifestations, and how people are caught up in it.

In line with the Target 8.3 of the SDGs, Malaysia has recognised the problem of forced labour and has already taken steps to address this issue. In 2021, the Ministry of Human Resources (MOHR) established the National Action Plan on Forced Labor (NAFPL) for five years beginning 2021-2025. The development of NAFPL was the extraction of a background study from the International Labour Organization (ILO) in 2018. After the study was completed in 2019, multiple consultations were held across the country, including in Sabah and Sarawak. In 2021, all the comments resulting from all the consultation and feedback sessions have been incorporated into a National Action Plan.

This document is aimed at guiding Malaysia in eradicating forced labour activities in the country through awareness, enforcement, labour migration, and access to remedy and support services. It also aims to strengthen enforcement of the workers’ minimum standards in housing, Accommodation, and the Amenities Act 1990 (Act 446).

It made it mandatory for employers looking to hire migrant workers to comply fully with the act. As a foundation for this NAFPL, the guiding principle is based on SDG no. 8, ILO Protocol 29, and the UN Guiding Principle on Business and Human Rights. The intervention of this national action plan falls under four areas that are pillars of the United Nations (UN) and ILO which are prevention, protection of victims, prosecution, and partnership. These pillars are then carried out by four strategic goals which are:

  • Improved knowledge and awareness
  • Improved Legal Compliance and Enforcement
  • Strengthened Migration Management
  • Improved Access to Support and Protection Services

The government established two committees to ensure that the national action plan is properly implemented: the steering committee and the technical committee. The National Action Plan on Forced Labor (NAFPL) is expected to end Malaysia’s forced labour problems.

The ministry also has conducted over 40,000 workplace inspections from the year 2020 to 2021 and initiated a blueprint for centralised labour quarters including migrant workers to accord better standards and a conducive living environment. The document will also ensure the implementation of e-wages, which can monitor wage payments to workers and strengthen collaboration with source countries for migrant workers.


Victims of forced labour also have families and children, who are deprived of their health rights, and education, among others, when their parents are trapped in different forms of forced labour and are unable to provide for them. Therefore, several approaches are required to eradicate forced labour:

  • To ensure that all stakeholders must play a role to eliminate forced labour practices together including government, NGOs, enforcement officers, and international communities.
  • To ensure that there is an enforcement system in place to prosecute criminals, as well as an integrity authority to uphold existing laws.
  • To protect the victims and provide access to the remedies as well as build awareness to prevent trafficking.

The responsibility to eradicate forced labour must come from the government and employers. The government is responsible for protecting workers while employers are responsible for adhering to labour regulations. It includes firms’ responsibilities to practice proper and effective due diligence throughout their supply chain.

All stakeholders, including the government, NGOs, enforcement officers, and international communities must work together to eradicate forced labour practices. The government needs to step up and take action against forced labour by educating the public, leaders, and enforcement units on global issues. Additionally, it is proposed to establish a special unit to inspect labour practices of companies, to increase the number of labour inspectors and appoint dedicated advocates to address the forced labour issues to the general public and businesses.

Interagency cooperation within the government is crucial for implementing the National Action Plan, supporting efforts to increase the number of prosecutions, and protecting victims.

HRD Corp and MOHR were urged to provide funding to civil society organisations to increase their ability to tackle the issue. It is also recommended that HRD Corp play a bigger role in raising awareness among employers about Goal 8: Promote inclusive and sustainable economic growth, employment, and decent work for all as well as the 11 indicators of forced labour set forth by the International Labour Organization (ILO).