Trading Labor Rights in Malaysia

by the Asia Monitor Resource Center

UNDER INTERNATIONAL PRESSURE to allow unionization in its country's electronics industry, the Malaysian government has instead stepped up its anti-union rhetoric and tactics. After learning that the International Metal Workers Federation (IMF) was lobbying for a motion of the United Nations-affiliated International Labor Organization (ILO) to sanction the Malaysian government, Human Resources Minister Datuk Lim Ah Lek instituted a series of vigorous attacks on the IMF, the Malaysian Trade Union Congress (MTUC) and local unions.

Lim has attacked the MTUC and "certain local unions" for trying to "embarrass" the government. In April, Lim said that MTUC leaders were irresponsible for criticizing the government and lodging complaints with international bodies. He also called upon MTUC affiliates to "do something about it," charging that union leaders had been "sitting too long doing nothing," and "getting away with too many things." Lim even criticized trade union officials for being paid excessive salaries and enjoying more perks than other professionals.

 The MTUC has had to face not only government attacks, but criticism from rival labor organizations. Cuepacs (Congress of Unions and Employees of Public and Civil Services) and the Malaysian Labor Organization (MLO) were quick to pledge their support for the government's stance. MLO president, Mohamad Abas, says that the ban of national unions in the electronics industry safeguards national interests. Officials of Cuepacs, the largest affiliate of the MLO, criticized the IMF for singling out Malaysia in its complaint to the ILO, arguing that many other member countries do not comply with ILO Convention requirements. After the IMF submitted its request to the ILO, MLO general secretary K. Sanmugan quickly asserted that the labor organization has no power to bar countries from attending its annual conference and can only "send a team to investigate allegations and persuade the government to take the necessary action."

 MTUC President Zainal Rampak denies that workers' campaign is "unpatriotic." He says that the MTUC is "pro-investment, pro-employment but is strongly anti- exploitation." He explains that the MTUC and IMF have made official complaints to international bodies only after the government repeatedly ignored or squashed the attempts of workers to form a union.

Profitting from repression

 Today, Malaysia's electronics industry employs approximately 120,000 workers. It is one of the country's fastest growing industries and is estimated to account for about 20 percent of Malaysia's annual economic growth.

Multinational electronics companies began locating in Malaysia in the early 1970s, after the country established free-trade zones in Penang. U.S. electronics companies, among the first to invest, requested and obtained from the Malaysian government a permanent ban on union organizing in this sector. Labor activists and non-governmental bodies in Malaysia have attempted many times to organize electronics workers, but the government, under heavy pressure from multinational corporations, has fought against union organizing efforts [see Malaysia's Workers: Jolting the Electronics Industry," Multinational Monitor, September 1989 ].

 In 1990, for example, 1,100 Hitachi electronics workers went on strike when the government rejected their membership in the Electrical Industry Workers Union (EIWU). All workers were dismissed and were not re- hired until they apologized to the company for having gone on strike. The company refused to re-hire workers who had been involved in organizing workers to join the union.

Multinationals block labor's victory

 In April, the IMF called on the ILO Governing Body to use its special powers to suspend the Malaysian government from participating in the ILO General Conference in Geneva in June, the latest in a long series of complaints to the ILO concerning the Malaysian government's violation of international labor rights. The IMF also recommended that the suspension be upheld until the Malaysian government abides by ILO conventions (worker rights guarantees) relating to freedom of association, particularly for electronics workers. Despite these requests, the ILO allowed the Malaysian government to participate in the conference.

 Incidents like the Hitachi strike led U.S. trade unions to call for the suspension of Malaysia from the Generalized System of Preferences (GSP) trade program in the late 1980s. The GSP program allows developing countries to ship certain products duty-free into the United States. A country's GSP status is contingent on its upholding basic international labor standards, including the right of workers to organize. The Malaysian government responded to the U.S. labor initiative by announcing that it would lift the ban on unions in the electronics industry.

 U.S. electronics multinationals immediately launched a massive lobbying effort against the decision. As a result, the Malaysian government again changed its position and said that it would only permit "in-house" unions. Under this policy, company or plant- based, as opposed to industry-wide, unions are allowed if 51 percent of the workers in a particular plant sign up. Six such in-house electronics unions currently exist, according to the government.

 Many Malaysian electronics workers have expressed a desire to join the EIWU, but the government maintains that membership in the union is not open to workers from the electronics manufacturing sector. When the MTUC offered to set up an electronics industry union, the Malaysian government refused to register it.

International impacts

 As a result of the IMF and MTUC's efforts to highlight labor repression in Malaysia, worker rights in Malaysia became a major issue at the June ILO General Conference. During the conference, the IMF released a book entitled Malaysia and the ILO - Two Decades of Violating ILO Conventions. In this 60-page publication, the IMF charges that Malaysia is the "number one" contravener of ILO conventions on organizing and collective bargaining.

 The IMF claims that while there are countries where workers are more exploited, "no other country has been so repeatedly in the dock at the ILO on the same issues, with the same condemnation, in the same industry, over so many years." The IMF publication says that the actions of the Malaysian government not only show disregard for the ILO, but also weaken the overall position and established rights of unions in other countries.

 Before the conference took place, the IMF had made efforts to resolve its dispute with the Malaysian government, proposing a meeting between a Malaysian government representative, an IMF representative and a nominee of the ILO director-general.

 The government's failure to respond to labor demands led the IMF to call upon all ILO delegates at the conference to support actions against Malaysia, maintaining that the labor organization must adopt a stronger position to make clear to the Malaysian government that the ILO governing body will no longer tolerate Malaysia's repeated and persistent flouting of key conventions. In response, Malaysia's Prime Minister Mohammed Mahathir reportedly threatened to denounce ILO Convention No. 98 on anti-union discrimination and take Malaysia out of the ILO.