A WikiLeaks cable released this week revealed United States concern over the challenges faced by foreign companies when dealing with the issue of forced labour in Malaysia.

The cable lamented the pervading mindset in both the private and government sectors in Malaysia where ‘forced labour’ was deemed acceptable.

On Oct 28, 2008, the United States embassy in Kuala Lumpur sent a diplomatic cable informing the office of the US Secretary of State in Washington that a Finnish company, Polar Electro, had recently provided compensation and repatriation assistance to 40 forced labour victims hired by its Malaysian joint-venture company.

This followed months of protracted efforts to redress the problems faced by a group of Vietnamese and Indonesian workers that allegedly saw Polar Electro delegates to Malaysia being barred by the management of the local Malaysian company - Twin Advance - from entering its factory in Penang.

At one point, said the cable, a Polar Electro executive alleged he had been visited at his hotel by a police officer “as a form of intimidation” for his probe into the case.

Polar Electro Group is a Finnish electronics company that holds 60 percent share in Polar Twin Advance, which operates a factory in Penang producing heart-rate monitors and sports instruments.

According to the cable, the group of mostly Vietnamese workers employed by Polar Twin Advance had complained of working allegedly “in conditions of forced labour” at its factory.  

More specifically, the factory managers were accused of having paid the workers at rates far below those stipulated in their original contracts, had confiscated their passports, had denied them their salaries and intimidated those workers who complained.  

Also allegedly occurring at the factory, the cable said, was the restriction of foreign workers’ movement and ‘contract swapping’ and possibly, embezzlement of funds.

Police alleged to help Malaysian managers

Upon being informed of the complaints and allegations, the Finnish ambassador in Kuala Lumpur personally contacted Polar Electro's chief executive in Finland about the matter, following which the company took immediate steps to address the situation, including sending an inspection team to the factory the following week.  

However, said the cable, the Malaysian joint-owner of the factory refused to allow the inspection team into the factory's premises.

Polar Electro executives also expressed frustration with the general lack of cooperation and information-sharing by the local partners on the forced labour reports.  

When the Finnish executives eventually confronted the plant managers with the allegations of labour exploitation, the managers were both “confounded and angered” that the Finnish parent company would raise such issues.

In addition to receiving “little assistance” from the Malaysian government, the cable revealed the suspicion of Polar Electro executives that elements within the police force in Penang had served to protect the Malaysian partner.  

“One of the executives described an incident where a policeman came to his hotel to question him as a form of intimidation,” said the cable.

Finnish company pays compensation to workers

The company executives admitted, however, to not having filed any complaints with the authorities related to the forced labour case. It is understood that the workers’ complaints had been lodged with the Labour Department in Penang.

In September 2008, the Finnish embassy officials and Polar Electro executives were able to arrive at a compensation package for the Vietnamese and Indonesia workers totally RM300,000 of unpaid back salaries.

Polar Electro, with assistance from local workers rights group Tenaganita, also paid for the repatriation of the workers to their respective home countries - Vietnam and Indonesia.

The cable says Polar Electro had also expressed intentions to divest shareholdings in the Malaysian company and intended to file a lawsuit in court against Polar Twin Advance.

When contacted for a response, an official at Twin Advance told Malaysiakini that the human resources manager who could speak on the matter was on a business trip and would return next week.

Beside the human resources manager, there are no other persons who can speak on the issue on behalf of Twin Advance, she added.