MALAYSIA: Vacuum cleaner and air purifier manufacturer Dyson is cutting ties with its Malaysian supplier, ATA IMS, following reports on the latter’s alleged labour malpractices.
Dyson’s spokesperson said, "We have now terminated our relationship with six months of contractual notice. We hope this gives ATA the impetus to improve and enables an orderly withdrawal in the interests of the workers that they employ."
Dyson commissioned an audit of ATA and demanded immediate improvements after receiving the findings, which the firm did not reveal.
ATA said the Responsible Business Alliance (RBA), a firm that commonly conducts factory audits for electronics companies using third-party inspectors, audited their company.
Labour rights activist Andy Hall filed a complaint before the U.S. Customs and Border Protection (CBP), which investigated ATA in April over unethical recruitment practices and poor working and living conditions.
Ten current and former employees, and a former ATA executive, accused the company of forced work of up to 15 hours a day, often asking the workers to skip rest days to meet the demand. The employees were told to hide the true working and living conditions from labour inspectors and Dyson. The employees also said ATA hired thousands of foreigners without work permits.
Nepalese Dhan Kumar Limbu, 32, revealed that Hall’s camp contacted him in April concerning the ATA probe. Limbu said he shared details about working and living conditions in ATA. He added that in June, ATA officials brought him to a police station for questioning about his association with Hall. He disclosed that the police beat him. He returned to Nepal following the incident.
ATA hired a law firm to look into Limbu's claims, saying that "the allegations may be unjustified."
The police are also investigating if the officers beat Limbu.
Meanwhile, ATA shares dipped almost 30% on the Kuala Lumpur stock exchange following the news. Addressing the exchange, ATA stated that it "adopts international best practices" and had been talking with Dyson about the audit.
The company's latest annual report declared that about half of ATA's approximately 8,000 employees are overseas workers. However, ATA workers and a former executive estimated its workforce had been as high as 17,000 until recently, including those without permits.
The Malaysian government said it would charge ATA over complaints it had received through the labour department and that it was investigating Dyson's split with ATA.
Human Resources Minister M. Saravanan said forced labour allegations against Malaysian companies are detrimental to foreign investors' confidence.
On the labourers’ side, six workers and shopkeepers in the Johor Baru industrial area feared they might lose their jobs.
"There is no guarantee of a job here anymore," an ATA worker said.
Employees mentioned ATA improved when the complaints surfaced in May. In July, the company reimbursed RM7,000 (USD1,700) to some workers for the amount they paid to labour brokers in their home countries.
The workers added that ATA stopped employing foreigners without permits and closed a crowded residence that used to have 60 occupants in a room.
"My intention to share information was to improve conditions for the workers and get rest days. But now with Dyson's decision, people will lose jobs," Limbu lamented.