Top Glove reiterates commitment to labour practices after US customs seizure order

TOP Glove, the world's biggest rubber glove manufacturer, was again rapped by the US Customs and Border Protection (CBP) on March 29 after it discovered forced labour practices in the company's production of disposable gloves.

Under CBP's direction, disposable gloves manufactured in Malaysia by Top Glove arriving at all ports of entry in the US were seized.

A media release from the CBP said that its office of trade, in consultation with the Treasury department, had published a forced labour finding against disposable gloves produced in Malaysia by Top Glove in the Customs Bulletin and in the Federal Register.

"Today's forced labour finding is the result of a months-long CBP investigation aimed at preventing goods made by modern slavery from entering US commerce," said Troy Miller, senior official performing the duties of the CBP commissioner.

Shares of Top Glove, which is dual-listed in Singapore and Malaysia, fell on Tuesday as investors reacted to the news. The Malaysia-listed counter fell 5.4 per cent or RM0.27 to close at RM4.78, while the Singapore-listed counter shed 3.6 per cent or S$0.06 to end the day at S$1.59. 

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This is not Top Glove's first run-in with the US Customs. The most recent finding expands upon a Withhold Release Order (WRO) that the CBP had issued in July 2020, based on "reasonable but not conclusive information" that multiple forced labour indicators exist in Top Glove's production process.

These indicators include debt bondage, excessive overtime, abusive working and living conditions, as well as the retention of identity documents.

In response to the CBP's latest findings, Top Glove said in a statement released on March 30 that its US counsels are currently liaising with CBP's representatives for sufficient information to meaningfully address the issues raised by the authorities.

The company said it had submitted a report prepared by independent international UK consultant, Impactt Limited, on March 16 to the CBP for review.

Impactt's statement said that as at January 2021, forced labour indicators such as abuse of vulnerability, restriction of movement, excessive overtime and withholding of wages were no longer present among the group's direct employees.

The consultant also found that "further progress" had been made on the fronts of other indicators such as the retention of identity documents, abusive working and living conditions, deception, debt bondage, physical and sexual violence and intimidation.

Elsewhere, Top Glove was on March 16 charged by the Sessions Court in Ipoh, Malaysia with 10 counts of having failed to provide worker accommodation that met the minimum housing and amenities standards set out by the country's Labour Department, state news agency Bernama reported.

The company pleaded not guilty to all charges, and court proceedings are slated to resume on April 28.

Top Glove's network of factories in Malaysia were also a source of Covid-19 infections last year. The company was ordered to shut 28 factories in phases after thousands of cases were found there.

As at end-March, Top Glove has 21,000 employees across 47 factories and seven marketing offices globally. The company is able to produce 96 billion pieces of gloves annually.

Read more:

• Why is Top Glove raising fresh equity after repurchasing shares at a much higher price?