How migrant workers become outlaws in Malaysia’s electronics industry

Amin Kamrani / DanWatch

After closing down part of the production and sacking its migrant employees, a Malaysian factory supplying Panasonic and Toshiba demanded excessive sums of money to give workers their confiscated passports back, workers claim. Factory management denies accusations.

Nikolaj Houmann Mortensen / @DanWatchDK

Alina grabs a radish with her left hand and laboriously slices the root into circular pieces with a knife in her right hand. She makes small piles of the round chunks, cuts them into sticks and then offload them from the chopping board on to one of the many big white piles of radish sticks that surround her in the empty restaurant. She is not very fast at chopping. But then again, the 37-year old Nepalese is not used to cook for a living. Alina used to assemble telephone parts and fix wires and she only just started working in the restaurant a week ago. Since then, Alina has not dared to go outside.


“It has been a week now. I haven’t gone anywhere. I feel scared going out,” she says.


“They say the police will arrest me.”


On Alina’s Malaysian visa and ID-card, it says she is working at a Malaysian electronics factory. Now that she is working at the restaurant, her visa has become invalid, and

Alina has become an undocumented migrant worker in Malaysia.


Like the estimated 2-4 million other undocumented migrant workers in Malaysia, she is now vulnerable to gross exploitation and abuse.


If she is caught by immigration authorities, she may be detained for months and whipped – a penalty that is occasionally used before deportation according to Malaysian workers’ rights organizations and migrant lawyers.




Alina initially signed a three-year contract with the electronics factory, Mctronic, which supplies Panasonic with telephone parts and produce computer servers for Toshiba. Her contract should have guaranteed her work for three years, but after just one year and four months in the job,

the management told her and a group of around 40 Nepalese co-workers that due to some operational changes there was no work for them at the moment.


“They stopped paying our wages,” Alina says.


“They said we should go and stay in our hostel, and then they would call us back after a week or a month.”

But the factory management did not keep their promises about more work, and since the migrants according to Malaysian law are tied to their original employer, workers were stuck in their hostel with no income. They began using their savings and soon had to start borrowing money in order to buy food and essentials.

After several months without pay, many of the Nepalese workers wanted to return to Nepal. But the factory had kept the workers’ passports since their initial visa application, and workers claim the company now demanded vast amounts of money to hand the passports back to them.

Amin Kamrani / DanWatch


 Alina says the factory demanded around 870 euro to give her passport back and provide her with a flight ticket home. That is, according to Danwatch’ research, five times the price of the cheapest flights to Kathmandu and the equivalent of almost four of her monthly basic wages at the factory.

Danwatch has been in contact with other former Mctronic workers who were dismissed at the same time and are now back in Nepal. One worker told Danwatch that he paid Mctronic approximately 400 euros to get his passport back and travel home. According to several former workers, the price decreased for workers who initially refused to pay the money. They say that some of the first to go back paid as much as 970 euro to get their documents and fly home, while others who ended up staying for months at the hostel, was finally able to travel for around 180 euro.

Some workers say Mctronic offered them work at other Malaysian factories before they went back. One worker says he agreed to take the job at a glass factory but after 42 days at the new place, he ended up paying Mctronic to get back to Nepal anyway. He told Danwatch he had felt unsafe at the glass factory after experiencing a co-worker getting his arm severely cut on the job without proper medical care, and after the workers had been told to hide from the police when they came to inspect working permits. Wages were also worse than at their original workplace, as food and transportation were not included in the pay, he says.

Another worker said that he and a group of other workers were first re-employed at two other electronic factories, but that wages were lower and they were not paid for their daily two hours of overtime work. Workers were moreover required to buy food at the place which in combination with the lack of overtime pay made it almost impossible for them to produce any savings. Therefore, he ended up paying Mctronics 400 euro to go back as well.

Other workers, like Alina, decided to run away from the hostel to look for a new job – now as an undocumented migrant in Malaysia.

Like for most migrant workers in the country, going to Malaysia had been a big investment for Alina and her family. She had migrated to pay off the debts from her deceased husband’s farm and to finance her two children’s education, but much of her first year’s income had been used to pay off the approximately 950 euro she says she has paid in recruitment fees. The factory deducted the money from her salary along with a smaller amount for a government levy she claims.


“It was so difficult but I had no other options,” she says.



 Serving tables at a restaurant a couple of miles from where Alina chops radishes, another Nepalese and former Mctronic employee tells a similar story. Like Alina, 38-year old Binsa could not afford to return to Nepal when the factory stopped paying her wages so she also went looking for other work, now as an undocumented migrant.


In the restaurant she works 12 hours a day, seven days a week for about 8,6 euro per day. When Danwatch meets her she is not allowed a break, so we talk while she attends our table in between serving fried rice and coffee to other customers.


“I have tried looking for other jobs, but conditions were often much worse,” she says while balancing three trays of lunch in her hands.


According to most estimates, there are more undocumented than documented migrant workers in Malaysia and they should be counted in millions – 2-4 millions according to the UN’s International Organization for Migration.


Most undocumented workers enter the country legally but become undocumented if they for example flee their original employer because of abusive working conditions or if their employment agent do not renew their work permit on time or lose their passport. Once considered ‘illegal’, workers are vulnerable to even graver exploitation – as Danwatch can tell in our story on undocumented workers who are subjected to forced labour.


As is often the case according to labour rights groups, Alina and Binsa claim that a recruitment agent in Nepal had promised them higher basic wages and better working and living conditions at the electronics factory, before they agreed to pay the recruitment fees and travel to Malaysia.


Binsa says she paid 1100 euro in recruitment fees. Besides the lower wages, she was especially disappointed about the hostel she was accommodated at in Malaysia.


“The promised us it would be clean, but then they put us in a dirty place, 10-20 workers stuck like cows,” she says.




According to Sumitha Shaanthinni, a Malaysian lawyer specialised in migrant cases, one of the major reasons behind the large number of undocumented workers, is that migrant workers have no option of legally switching to another job in Malaysia if they for example face abuse at their original workplace.


“So when they are unhappy with one particular employer, they have to just leave and become undocumented. Because they know they won’t be able to change the employer”, she explains from her small office on the 5th floor in central Kuala Lumpur.


Though the recruitment fees are often paid by the workers themselves, the employers may also have paid some money to a recruitment agent as well as the official levy for employing foreign workers, workers rights’ groups point out.


“And so it is common that they will not let go of workers easily if they can get them to cover such costs too”, says Adrian Pereira, who is the executive director of the North South Initiative, an organization that provides various types of support for migrant workers in Malaysia and their origin countries.


While Malaysian law clearly says that it is not legal for an employer to confiscate a passport, the law also states that employers should cover the repatriation expenses  – in this case the flight ticket back to Nepal – when they have terminated the contract before time, Sumitha Shaanthinni explains.





According to a comprehensive 2014 study by the American watchdog organization Verité with a sample of more than 400 electronics workers in Malaysia, around one third of foreign workers were forced to work against their will.


Workers rights groups point to how workers are especially in risk of gross exploitation because they have no option of legally switching to another job in Malaysia – if they do not want to pay to travel home before their contracts end, they can either endure the abuse or run away from their designated workplace and become undocumented migrants.


However, at the labour agency association PIKAP Malaysia, which represents 150 Malaysian agencies, Honorary Secretary Sharfadeen Abd. Hamid do not agree that labour rights abuse is the main reason why workers leave their workplace and to work without proper documents.


“Probably, they are selfish for themselves”, Hamid tells Danwatch in PIKAP’s office building, a five minute walk from Kuala Lumpur’s landmark twin skyscrapers Petronas Towers.


According to the Honorary Secretary, workers likely run away because they are not able to do their job properly, or because they eye an option to earn more money as undocumented workers. Hamid was not able to present any concrete documentation to support such claims.


“When you have a problem, you should find a way to solve the problem, rather than blaming someone else, like your employer, and then run away”, Hamid says, adding that workers become illegal when they run away and are thus “volunteering themselves to get abused”.


“Eventually you are also giving a headache to the government – you know, to look for the illegal workers, get them and put them into the detention centre. And then to liaise with the embassies to deport them. It’s so much of work”, the agency association’s Honorary Secretary says.




It has not been possible for Danwatch to get a comment from Mctronic. In an email to Danwatch,  Toshiba spokesperson, Peter Carson, writes that the company has been in contact with the factory after Danwatch’s enquiry.


“However, we were unable to identify the issues you mentioned from the response we received from Mctronic Industries”, he writes and continues to emphasise that Toshiba acknowledges “that human rights violations are critical issues in Asian countries including Malaysia” and that the company requires its suppliers to adhere to the law and Toshiba’s procurement policy.


From Panasonic, media spokesperson Mio Yamanaka tells Danwatch that they have been in contact with Mctronic. She also states that the factory told them a different story and she refrains from promising that Panasonic will investigate the matter further.


“Mctronic explained that their 39 workers recently quit their job and returned to their home country. When Mctronic proposed to their employees that they change their workplace due to operational change at the factory, their workers refused to accept this proposal and decided to resign. The wages of the workers were fully paid by Mctronic”, Yamanaka writes.


Asked if the two companies are planning to do any kind of independent investigation or if they trust their suppliers’ version of the story, Peter Carson writes that Toshiba “are going to conduct our own on-site audit, and are now making the necessary arrangements.”


From Panasonic, media spokesperson Mio Yamanaka responds: “Panasonic believes that we should consider doing a more in-depth survey that does not rely solely on the supplier’s information”.