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15 Dec 2024 12:35
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  •   Home > News > International

    Sony, Panasonic 'cut and run' from Malaysian supplier accused of wage theft

    Migrant workers allege exploitation by Kawaguchi Manufacturing, accusing the supplier for Sony, Panasonic and Daikin of not paying wages and withholding passports.


    When Ershad left Bangladesh for Malaysia, he dreamed of supporting his family back home.

    He was hired at Kawaguchi Manufacturing to produce plastic casings for televisions and air conditioners for multinational companies including Sony, Panasonic and Daikin.

    Some of these parts have been supplied to Australia.

    Initially, Ershad earned just over $300 a month (1,000 Malaysian Ringgit).

    However, over the past two years his wages became inconsistent.

    Payments were delayed, sometimes by several months. And for the last six months he says he's received no salary at all.

    Ershad and more than 200 other workers previously went on strike to demand months' worth of unpaid salaries.

    Malaysian media reported that local authorities found evidence during a September 3 raid that Kawaguchi Manufacturing had not paid hundreds of its Bangladeshi workers since April, and had also retained their passports.

    "The amount we are owed keeps piling up," said Ershad, whose name and those of other workers have been changed because they fear detention, deportation or other repercussions for speaking publicly.

    Workers allege wage theft, forced overtime, recruitment fee exploitation, and confiscated passports — a grim reality behind the supply chains of some of the biggest global brands.

    And although they're building parts for global brands, workers shared photos of their accommodation, which is provided by Kawaguchi, showing squalid dormitories with only pedestal fans for cooling.

    Sony and Panasonic abruptly exit

    Despite calls to focus on addressing the labour issues, Sony and Panasonic are severing ties with Kawaguchi.

    Panasonic said it's been helping fix the problems, including returning confiscated passports, but admitted only partial progress had been made.

    "We paid for orders prior to the payment date, accepted their delayed delivery, and advanced the payment for procuring the raw materials," Panasonic said in an email to the ABC.

    It's hoped the advanced payments will help with the cash flow.

    According to Panasonic, Kawaguchi promised to pay workers' outstanding salaries in full in December.

    The ABC made several attempts at contacting Kawaguchi but received no response.

    Sony said it urged Kawaguchi to improve pay, working conditions and dormitories, but cited the supplier's worsening financial situation as the reason for ending its business.

    "We requested the company to promptly implement corrective measures, including appropriate payment to workers," Sony spokesperson Noriko Shoji said.

    Sony added it would work with organisations to "explore reasonable support" to affected workers but didn't elaborate on what this meant.

    Labour activists have engaged with Sony, Panasonic, and Daikin for months, urging them to use their leverage to ensure workers are paid.

    But workers' representatives said the employees still had not received their money.

    When they received no response from the factory owners, 57 workers also filed reports with the Malaysian labour department claiming Kawaguchi owed them 806,310 ringgit ($284,643).

    With their visas tied to Kawaguchi, many migrant workers can't seek other jobs or afford to pay more recruitment agencies.

    Mozammel, another worker from Bangladesh, said he felt trapped.

    "We want to keep working or at least get our recruitment fees reimbursed."

    Some workers fear the factory will shut down entirely, leaving them jobless.

    'Cutting and running highly detrimental'

    Japanese firm Daikin, which spruiks itself as the number one air-conditioning company in Australia, accounts for only a small portion of orders from Kawaguchi.

    Daikin didn't respond to the ABC's questions but has made a public statement.

    Daikin Malaysia (DAMA) said it discovered during a routine visit that Sony and Panasonic — responsible for most of Kawaguchi's business — planned to remove their moulds and halt transactions.

    "Under these circumstances, DAMA, which only accounts for 1-2 per cent of Kawaguchi's total transactions, would be unable to support Kawaguchi's operations on its own."

    Lawyer Andy Hall, who has worked on labour rights in Asia for more than 10 years, has proposed roundtable talks between brands, factory owners and workers' representatives.

    Workers' representatives say the companies' decisions to cut ties have worsened their situation.

    "Only a limited number of workers remain with work in the factory, as the rest have been terminated or have reduced hours," Mr Hall said.

    He said many now needed food aid.

    "All of the estimated 220 workers are now lacking valid visas, with at least 50 workers in a completely irregular and vulnerable status," he added.

    Mr Hall said many had massive debts as a result of falling victim to excessive recruitment-related fees and were vulnerable to falling into modern slavery.

    Business & Human Rights Resource Centre senior researcher Isobel Archer described the actions of Sony and Panasonic as "extremely irresponsible".

    "Cutting and running can have direct negative and highly detrimental impacts on workers if it is not done in a planned way," she said.

    Deakin University associate professor Pichamon Yeophantong, who is also an independent expert with the UN Working Group on Business and Human Rights, said "abandoning the workers would contradict the companies' human rights commitments".

    "This is the type of case that can serve as a litmus test for businesses when it comes to their understanding both of their leverage and their responsibility to respect human rights," Ms Yeophantong said.

    Companies should shift from being "passive bystanders" to actively solving crises when they detect them in their supply chain, she added.

    Panasonic, Sony and Daikin said they were working to support the impacted workers.

    "We will use our leverage to address workers' labour rights abuses in a collaborative manner together with relevant stakeholders," Panasonic said.

    "We are now shifting our focus to collaborate with RBA [Responsible Business Alliance] and some other organisations to explore reasonable support and remedies for the affected migrant workers," Sony said in their statement.

    Many workers now fear returning home to Bangladesh empty-handed.

    "Initially I was so happy to work for Sony and Panasonic, such world-famous brands, but with no payment and mounting debts I no longer feel proud," another worker, Kabir, said.

    "I gave up my honours studies after my father died to support my siblings.

    "Now I'm burdened with a huge debt and I don't know how I can contribute to their studies."


    ABC




    © 2024 ABC Australian Broadcasting Corporation. All rights reserved

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