Background

In June, United Kingdom’s Channel 4 reported that migrant workers were only paid £1.08 (RM5.77) an hour and while working up to 111 hours in overtime to meet the demand for gloves during the COVID-19 pandemic.
The company is also accused of making illegal deductions from workers’ salaries and placing workers in appalling conditions in hostels with barely any protection measures.
This was not its first allegation. The Guardian reported in 2018 that migrant workers were being allegedly subjected to forced labour, forced overtime, debt bondage, and withheld wages.

What was the impact?

The US Customs and Border Protection (CBP) on July 16 has placed a detention order on disposable gloves manufactured by two of its subsidiaries, Top Glove Sdn Bhd and TG Medical Sdn Bhd.
Top Glove responded by labelling the report as “highly inaccurate” and said it had been covering all recruitment fees since January 2019 when its Zero Recruitment Fee Policy was implemented.
Senior Minister cum International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said the company is currently engaging with US authorities to address the allegations levelled against it.
Amidst recent reports on labour rights violations not only directed to Top Glove but other rubber glove companies in Malaysia as well, chairman and founder, Tan Sri Lim Wee Chai, had admitted the company had made some mistakes and are working to rectify them as best as they could.
He also emphasized the need for foreign workers to meet the increasing demands due to COVID-19, claiming that the expectation to only allow locals to fill the vacancies was unrealistic, and would reduce Malaysia’s competitiveness.

Why it matters?

Malaysia has been the leading country in glove manufacturing having exported about 182 billion pieces of glove, accounting for $4.31 billion in revenue in 2019, as reported by Bloomberg.
As the world’s largest rubber glove manufacturer, The Edge Markets reported that Top Glove commands a 26 per cent share of the global market, with a production capacity of 80.2 billion pieces per annum.
As of 13 July, the company has emerged as the third biggest company on Bursa Malaysia, overtaking Tenaga Nasional Bhd, as the company’s market capitalisation increased to RM64.73 billion.
Top Glove last week announced record profits of RM348 million for the third quarter ending May 31, 2020, a 365 per cent year-on-year increase.
Top Glove shares closed RM1.84, or 8.01 per cent, higher to RM24.82 on 20 July as the company announced a two-for-one bonus issue involving up to 5.48 billion new shares.