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### Viewing cable 08KUALALUMPUR940, FINNISH COMPANY POLAR ELECTRO ASSISTS FORCED LABOR

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08KUALALUMPUR940 | 2008-10-24 08:08 | 2011-04-24 00:12 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Kuala Lumpur

`

    VZCZCXRO3100
    PP RUEHCHI RUEHDT RUEHHM RUEHNH
    DE RUEHKL #0940/01 2980816
    ZNR UUUUU ZZH
    P 240816Z OCT 08
    FM AMEMBASSY KUALA LUMPUR
    TO RUEHC/SECSTATE WASHDC PRIORITY 1817
    INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY
    RUEHHE/AMEMBASSY HELSINKI 0022
    RHHMUNA/CDR USPACOM HONOLULU HI

` `

    UNCLAS SECTION 01 OF 02 KUALA LUMPUR 000940

    SENSITIVE
    SIPDIS

    FOR EAP/MTS AND G/TIP

    E.O. 12958: N/A
    TAGS: PHUM PGOV ELAB KTIP FI VM ID MY
    SUBJECT: FINNISH COMPANY POLAR ELECTRO ASSISTS FORCED LABOR
    VICTIMS

    Summary and Comment
    -------------------

    ¶1. (SBU) Finnish company Polar Electro recently provided
    compensation and repatriation assistance to 40 forced labor
    victims from its Malaysian joint-venture company, following
    interventions by an international NGO and Post.  The Polar
    Electro case appears illustrative of the challenges facing
    some foreign companies when dealing with allegations of
    forced labor at their Malaysian suppliers' facilities.  These
    challenges include the mindset among some Malaysian employers
    that confiscating the passports of migrant workers, contract
    swapping, and restricting the movement of foreign workers are
    acceptable practices.  Employers holding the passports of
    migrant workers is the standard in Malaysia, which renders
    the workers more vulnerable, but we do not have data on the
    incidence of labor trafficking in Malaysian factories.  In
    addition to the Polar case, Embassy Kuala Lumpur continues to
    engage the corporate community and civil society through
    outreach programs designed to raise awareness of forced labor
    and trafficking in persons for labor exploitation.  End
    Summary and Comment.

    Finnish Company and U.S. Mission Respond to Reports
    --------------------------------------------- ------

    ¶2. (SBU) Post, working in conjunction with the Finnish
    Embassy, was able to facilitate the compensation and
    repatriation of approximately 40 mostly Vietnamese workers
    from conditions of forced labor in a Penang electronics
    assembly factory.  Polar Electro Group, a Finnish electronics
    company, holds 60 percent share in Polar Twin Advance, the
    local Malaysian company operating Polar Electro's Malaysian
    factory in Penang.  Boat People SOS (BPSOS) informed us on
    July 1 that Vietnamese employed by Polar Twin Advance were
    allegedly working in conditions of forced labor.  Malaysian
    plant managers reportedly had paid the workers at rates far
    below those in their original contracts; confiscated workers'
    passports; and denied salaries and intimidated workers who
    complained.  Poloff informed the Finnish Embassy about the
    allegations, provided background information on labor
    trafficking, and offered suggestions on a course of action.
    As a result, the Finnish Ambassador personally contacted
    Polar Electro's CEO to brief him on the reports of forced
    labor.  Polar Electro took quick steps to address the
    situation, including sending an inspection team to the
    factory the following week.  However, the Malaysian
    joint-owner of the factory refused to allow the inspection
    team onto the factory's premises.  When Finnish executives
    eventually confronted Malaysian plant managers with the
    allegations of labor exploitation, the plant managers were
    both confounded and angered that the Finnish parent company
    would raise such issues.

    ¶3.  (SBU) Polar Electro then worked with BPSOS, which
    provided the laborers with legal counsel to develop a
    compensation package for the estimated 40 plus mostly
    Vietnamese workers, even though the Finnish parent company
    was not directly responsible for the mistreatment of the
    workers.  Post continued to engage with the Finnish embassy
    on the issue, and on September 9 the Finnish DCM informed
    Poloff that Polar Electro provided the workers involved a
    compensation package totaling at least 300,000 ringgit (about
    $91,000) for unpaid back salaries.  Polar Electro also paid
    to repatriate the workers to their home countries (Vietnam
    and Indonesia), a process arranged with assistance from local
    NGO Tenaganita.  (Note:  In an earlier forced labor case
    involving the Esquel company, the Embassy had linked BPSOS to
    Tenaganita, a longstanding anti-trafficking partner that
    receives USG support.)

    ¶4.  (SBU) The Finnish Ambassador, Finnish DCM, and two Polar
    Electro executives from Finland briefed PolCouns and Poloff
    on October 20 regarding Polar Electro's ongoing efforts with
    the Malaysian plant.  We were told that the Malaysian
    partner, in addition to allegedly mistreating employees, has
    denied Polar Electro access to its factory and may have
    embezzled funds.  The Polar Electro executives expressed
    their frustration with the local partner's lack of
    cooperation or information sharing on the forced labor
    reports.  Polar Electro wishes to divest shareholdings in the
    Malaysian company and intends to file a lawsuit in Malaysia's
    legal system against Polar Twin Advance.

    Engaging the Malaysian Government
    ---------------------------------

    KUALA LUMP 00000940  002 OF 002

    ¶5. (SBU) The Polar Electro executives said they received
    little assistance from the Malaysian government to date, but
    also admitted that they had not filed any complaints with the
    authorities related to this forced labor case.  Likewise, the
    executives were unaware if other parties, such as Tenaganita
    and BPSOS, filed criminal or civil complaints over the forced
    labor conditions.  Polar Electro speculated that some police
    officials in Penang appear to be protecting the Malaysian
    partner.  One of the executives described an incident where a
    policeman came to his hotel to question him as a form of
    intimidation.  Post provided Polar Electro with additional
    points of contact in the Malaysian government for them to
    pursue the case should they choose to do so.

    Outreach Efforts
    ----------------

    ¶6.  (SBU) Besides Post's active involvement in the Polar
    Electro case, we are engaging the corporate community and
    civil society through an outreach program designed to raise
    awareness of forced labor and trafficking in persons for
    labor exploitation.  On June 18, Poloff met with the human
    resource manager committee of the Malaysian International
    Chambers of Commerce and Industry (MICCI) to discuss reports
    of forced labor in Malaysia and the possible ramifications in
    the international community.  The business executives
    responded very positively and MICCI requested a follow-up
    presentation, which is set for November 13.  In conjunction
    with the release of the 2008 TIP report in June, Post briefed
    the Malaysian Bar Council's human rights committee on forced
    labor and how the Malaysia's 2007 anti-TIP law could be used
    to prosecute forced labor cases.  The Bar Council is an
    active partner, providing its members with internal training
    on the new TIP law and providing a Bar Council representative
    to speak at both MICCI outreach events.  In September, Poloff
    discussed labor trafficking and forced labor with the Deputy
    Speaker of Parliament and officials from the Malaysian Trade
    Union Congress in Sarawak, East Malaysia.
    KEITH

`