KUALA LUMPUR (June 2): Electronics manufacturing service (EMS) provider SKP Resources Bhd said an independent consultant has found out that the company’s practices do not amount to systemic forced labour after it took steps to address allegations of such practices.

To recap, independent migrant worker rights specialist Andy Hall had in December last year raised concerns regarding SKP Resources' management of its foreign workers, in particular relating to overtime work and adequate remediation of recruitment fees.

Subsequently, SKP Resources had appointed TÜV Rheinland Malaysia Sdn Bhd to examine and identify during its audit whether SKP Resources and its subsidiaries were involved in practices that may be considered any of 11 indicators of forced labour, as defined by the International Labour Organization (ILO).

In a statement on Thursday (June 2), SKP Resources said TÜV Rheinland in its final audit report revealed that considerable improvements have been made by SKP Resources since December 2021 with regards to working hours, overtime work processes and adequate remediation of recruitment fees at its subsidiary, SPI Plastic Industries (M) Sdn Bhd, which was the company that was the original source of the complaints by Hall.

TÜV Rheinland also verified that SKP Resources had now completed its remediation programme across all of its subsidiaries and that all foreign workers have been fully reimbursed for all recruitment fees previously paid to recruitment intermediaries at a justifiable and reasonably calculated level.

As such, TÜV Rheinland also noted the further progress that SKP Resources has made regarding the ILO’s forced labour indicators and, taking into account these ongoing efforts, established that the company’s practices do not amount to systemic forced labour and are in compliance with Malaysia Labour Law.

The forced labour audit took two months to complete, covering six of SKP’s subsidiaries hiring non-Malaysian workers, beginning in early April 2022 and completed in May 2022.

SKP Resources executive director Ivan Gan said having examined the findings in detail on completion of this audit, the management is pleased with the outcome.

“This whole exercise has shed light on some shortcomings of our business operations and more importantly, the significant improvements that have been made. Specifically, all workers have now been fully reimbursed for all recruitment fees previously paid to recruitment intermediaries, and working hours and overtime issues have been addressed. Both of these issues are those which Mr Hall constructively raised to us previously.”

“Additionally, interviews conducted with our workers also yielded positive feedback. Workers were increasingly satisfied with their working conditions and well-being as employees of SKP Resources.

“The findings of this audit is another step forward that will enable SKP to achieve our ESG objectives,” he added.

SKP Resources shares closed up two sen or 1.31% at RM1.55 on Thursday, giving it a market capitalisation of RM2.42 billion.