A report on forced labour in Malaysia funded by the US State Department could emerge as the biggest threat to the country's electric and electronics (E&E) industry, which happens to the largest export sector, PKR’s Bayan Baru MP Sim Tze Tzin said today.

The Verite report on forced labour states that 28 percent of workers in Malaysia are forced labour, and this puts Malaysia under a real threat of being placed on the US Labour Department watch list, Sim said.

If that happens, it will affect the E&E sector in terms of investment and will shrink future foreign direct investments (FDI) into the country.

“Not everything said in the Verite report is true. But the International Trade and Industries Ministry has not responded to or rebutted the report, despite notice from the US State Department,” Sim said.

He said that the watch list will be published on Dec 1 and Malaysia needs to urgently give feedback and rebut the report before that date so that they are not listed in the watchlist.

“The ministry must give immediate response because this is a serious issue. Due to their incompetence we might face such a big problem,” he said.

The Verite report interviewed most foreign workers in Malaysia from the electronic sector and came to the conclusion that 28 percent of foreign labour in Malaysia is forced.

Among the criteria were living conditions and withholding of passports of foreign workers.

The E&E export sector is valued at RM236.8 billion, or 32.9 percent of overall export for Malaysia.

He said if Malaysia is part of the watch list, investors and companies from US might stop business ties with Malaysian companies in this sector.