KUALA LUMPUR:The government is committed to promoting ethical recruitment practices that adhere to international standards to curb further forced labour allegations that have serious ramifications on Malaysia's reputation and also possible negative impact on industries' supply chain network.

Ministry of International Trade and Industry (MITI) deputy secretary-general Datuk Seri Norazman Ayob said the government was aware and concerned about the restriction order imposed by the United States' Customs and Border Protection due to alleged forced labour elements by some Malaysian companies.

He added that the knock-on effects of such action would be on the whole industry in terms of reputational risk.

"While businesses seek to lower production costs or improve the quality of products, it is imperative to maintain the confidence of consumers who are informed of unethical labour practices or below minimal standards by companies," he said.

Norazman said this in his opening remarks at a webinar titled "Forced Labour: The UK, US and Australian Perspective" held earlier today.

He pointed out that the issue of worker's rights has been in the headlines as far as Malaysia is concerned, impacting not only the business operations of industries in Malaysia but also in international markets such as the US and European Union.

"The US, for example, had imposed the Withhold Release Order on some shipments of goods from Malaysia, resulting in losses in revenue and impaired the reputation of our companies," he said.

Norazman said the government was taking a holistic approach towards management and addressing the issues related to labour rights, practices and allegations of forced labour.

The Department of Labour, he said, had started to initiate legal actions against companies that did not comply with the relevant laws including the Workers' Minimum Standards of Housing and Amenities Act 1990 (Act 446).

"From the investment point of view, institutional investors and fund managers are increasingly seeking companies that adopt environmental, social and governance (ESG) elements in their business strategies or operations as it is associated with good labour practices," said Norazman.

He urged local companies to equip themselves with good labour practices and ESG to expand their market access, secure funding, as well as integrate into the regional and global supply chain.

-- BERNAMA