Dyson splits with Malaysia supplier over migrant worker treatment

Dyson – A short drive from Dyson’s new Singapore base camp is the boomtown worked around its business: a Malaysian modern region overwhelmed by its biggest provider, ATA IMS Bhd.

ATA, one of Malaysia’s leading providers of electronics manufacturing services, profited from Dyson’s success in high-end vacuum cleaners and air purifiers, supplying parts for a company that accounted for 80 percent of its revenue.

Ten current and former employees, as well as a former ATA executive, claim that the company’s growth came at an unanticipated cost: its mostly migrant workforce worked up to 15 hours a day, was frequently asked to skip rest days to meet demand, and was coached to conceal true working and living conditions from labour inspectors and Dyson.

Employees said in interviews over the last two months that ATA, which analysts say is Dyson’s largest global contract manufacturer, hired thousands of foreigners without work permits.

Following questions from Reuters on November 18, Dyson announced last month that it would withdraw its business from ATA within six months, citing a recent independent audit on worker conditions and allegations by an unidentified whistleblower. The Responsible Business Alliance (RBA), a body widely used by electronics firms to conduct factory audits, audited ATA, to conduct the inspections. It refused to comment.

On Nov. 29, ATA stated that it had received a summary of Dyson’s audit, which revealed, among other things, poor living conditions, retaliation concerns, and unpaid allowances. ATA declined to comment, instead directing Reuters to its most recent public statements.

Dyson stated on Tuesday that it would not comment because the allegations were related to ATA. Malaysia announced on Wednesday that it would charge ATA.

M. Saravanan, the country’s human resources minister, said allegations of forced labour at Malaysian companies were undermining foreign investors’ trust in Malaysian products. He had previously stated that the government was looking into Dyson’s decision to leave ATA. Following Dyson’s departure, ATA shares fell by 60%. Some analysts have expressed concerns about ATA’s ability to attract new customers, and the company issued a statement on Nov. 29 forecasting revenue declines and cost cuts. Six workers and shopkeepers interviewed in the Johor Bahru industrial area said they feared losing their jobs as a result of Dyson’s departure, said one off-duty ATA employee on a recent Sunday, wearing his royal-blue factory work shirt. He, like others, asked not to be identified for fear of retaliation. ATA officially employs around 8,000 people, but four ATA employees and a former executive estimated its workforce to be as high as 17,000 people until recently, including those without permits. According to the workers and executive, the majority of the 17,000 were from Bangladesh and Nepal.

Read more News & trends on India Frontline.