In September 2024, it was reported that over 200 Bangladeshi workers employed by Kawaguchi Manufacturing, a plastics company in Malaysia, have been experiencing human rights violations, including several indicators of forced labour. Kawaguchi allegedly supplies to major electronics firms, including Panasonic, Sony and Daikin, according to the Malay Mail.

Free Malaysia Today reported that migrant rights activist Andy Hall shared interviews with workers alleging labour rights abuse, including:

• Wage theft: the workers say they have not been paid for six months, which has caused distress on both them and their families back home.
• Recruitment fee charging: the workers say they were charged high fees for their jobs and took out loans to cover the fees.
• Denial of leave: the workers say they are forced to work seven days a week without public holidays or overtime pay. In one video, a worker says he is forced to work 12 hours a day.
• Unsuitable living conditions: the workers say they live in overcrowded and unhygienic accommodation.
• Failing to renew visas: some of the workers are allegedly without visas as the company failed to renew them. This has left them undocumented and vulnerable.
• Intimidation: the workers who raised concerns have been threatened with detention, deportation and police action. Four workers have been sent back to Bangladesh “as punishment”, according to Free Malaysia Today.
• Passport confiscation: the company allegedly withheld workers’ passports.

The Selangor labour department is now investigating the allegations.

In September, the Business & Human Rights Resource Centre invited Daikin, Panasonic, and Sony to respond to the findings, and: a) confirm whether they still source from Kawaguchi Manufacturing, and/or the date when they stopped sourcing from the company; b) disclose any human rights due diligence they undertake prior to entering into contracts with suppliers and when monitoring working conditions at suppliers; c) disclose the steps they have taken to investigate the abuse reported; and, d) disclose the steps they have taken to remedy workers for the fee-charging, intimidation of protesting workers, and wage theft.

Daikin, Panasonic and Sony’s responses can be read in full below.

The Resource Centre was not able to contact Kawaguchi Manufacturing to invite a response to the allegations; if a response is received in future this page will be updated accordingly.

In October 2024, Daikin and Sony disclosed updates on their investigations into the case. Their updates can be read in full below.

Towards the end of November, Malaysian news outlets reported on workers' concerns that buyers were halting sourcing from the factory in light of the ongoing allegations, citing moulds and other equipment being removed from the factory. About 60 workers at the time of that reporting had filed four separate reports with the labour department, claiming they are still owed unpaid wages and unauthorised salary deductions of almost USD180k.

The Resource Centre to all three buyers for a second time to understand how any exiting was being undertaken in line with responsible procurement principles. We asked the companies to confirm whether they had terminated sourcing, when this occurred, and which stakeholders were consulted in the decision-making. Panasonic confirmed it had completed all payments and accepted delivery delays from Kawaguchi, but was engaging "other suppliers who can provide the parts for the products currently being ordered by our customers, to whom certain molds were transferred". Sony said it "had to conclude to discontinue the transaction with the company". In its response, Daikin highlighted that its orders from Kawaguchi only account for 1-2% of its orders and stated the company would be unable to support Kawaguchi on its own, once Sony and Panasonic stopped sourcing from the factory.