Amid Virus Crisis, US Bars Imports of Malaysias Top Glove Over Labor Issues

KUALA LUMPUR—U.S. Customs placed a detention order on imports of products made by subsidiaries of the worlds largest medical glove maker, Malaysias Top Glove Corp Bhd, an action taken against firms suspected of using forced labour.

The bar on Top Glove products comes at a time when demand for medical gloves and protective gear has skyrocketed due to the coronavirus pandemic, which has hit the United States harder than any other country.

The U.S. Customs and Border Protection (CBP) website showed Top Glove Sdn Bhd and TG Medical Sdn Bhd were placed on its list on Wednesday. Its “withhold release orders” (WRO), detaining imported goods, are specific to forced labor issues.

In an emailed statement, CBP said that through extensive inter-agency consultations it had found evidence of forced labor practices, including debt bondage among other practices in Top Gloves units.

“This WRO sends a clear and direct message to U.S. importers that the illicit, inhumane and exploitative practices of modern day slavery will not be tolerated in U.S. supply chains.”

CBP, however, said it was aware of the current critical need for disposable rubber gloves and would continue to allow entry of gloves produced by all other manufacturers. It estimated that the order against Top Glove entities in Malaysia would have no significant impact on total U.S. imports of that type of glove.

Top Glove, which also has factories in China and Thailand, had earlier flagged that the U.S. move might be related specifically to recruitment fees paid by migrant workers to employment agents.

“We are reaching out to the CBP through our office in U.S., customers and consultants, to understand the issue better and work towards a speedy resolution of the matter, within an estimated 2 weeks,” it said in a bourse filing.

In an evening conference call, Top Glove bosses told reporters and analysts that shipments from its two units represent half of its U.S. sales, and 12.5 percent of its group sales. However, the group said other subsidiaries could still sell to the United States and that other countries would easily absorb any returned shipments.

“We continue to ship because we can ship. Worst comes to worst, other countries will take up as well because the order book is more than 100 percent,” Executive Chairman Lim Wee Chai said.

One More Labor Issue

Top Glove said it had been bearing all recruitment fees since the start of last year, but still had to resolve an issue regarding retrospective payment of recruitment fees paid, without its knowledge, by workers to agents before January 2019.

“Over the past few months we have been working on this issue, which involves extensive tracing, to establish the correct amount to be paid back to our workers, on behalf of the previous agents,” the company said.

Top Gloves share price slipped 2.57 percent before it temporarily halted trading, a minor blip after a rise of over 35Read More – Source