VS Industry addresses migrant labour issues with activist

The company will step up efforts to verify if there had been any instances of workers paying fees to external parties 

By AZALEA AZUAR / Pic Credit vs-i.com

VS INDUSTRY Bhd has changed all its migrant workers hired through a recalibration programme to direct employment following its engagement with labour rights activist Andy Hall. 

In a filing to Bursa Malaysia yesterday, the electronics manufacturing services (EMS) company said it will step up efforts to verify if there had been any instances of workers under the programme having to pay recruitment fees or related costs to external parties. 

“VS Industry commits to continue upholding its zero-recruitment fee policy where all fees and costs relating to recruitment of migrant workers are borne entirely by VS Industry. 

“If such instances exist, VS Industry shall take immediate remedial action to reimburse the workers, and this investigation and remediation work shall be verified in March 2022 by an independent social compliance audit, the findings of which VS Industry shall share transparently with Hall as the basis for our ongoing dialogue together,” the company said. 

It further said the specifics and nature of this third-party audit shall be finalised by VS Industry shortly in liaison with Hall so joint agreement to proceed can be established. 

“Hall will be engaged and consulted on the format and specifics of commissioning the audit while VS Industry has committed to ensuring all future migrant workers shall be employed directly by the group, with no involvement of third-party actors,” MD Datuk SY Gan said. 

Hall stated that he looks forward to the continued and constructive cooperation with VS Industry as well as positive outcomes for migrant workers. 

“I wish to reiterate that the primary emphasis of my work remains on protecting the rights and interests of migrant workers in Malaysia. In this regard, I am grateful for the openness of VS Industry management to understand the concerns I have brought up and the willingness of the company to work together with me for the betterment of these workers. 

“It is certainly not my objective to undermine or hinder development or progress aimed for by leading EMS corporates such as VS Industry. 

“I hope that my efforts in this regard have brought about increased awareness on issues faced by migrant workers in Malaysia and in the EMS industry, and that more organisations, whether locally or abroad, will pay more attention on this crucial and sensitive aspect as concerns environmental, social and governance issues and migrant worker rights,” said Hall. 

Ambank Research, in a report, said the group is limited by labour shortages and they are continuing to run at full capacity. 

“However, with the gradual easing of cross-border restrictions, VS Industry expects to be able to commit to more orders. 

“VS Industry is targeting to bring in 3,000 additional workers to the current 9,000 workforce,” it said. 

The challenges in the EMS industry during the Covid-19 pandemic as well as political uncertainties and the global supply chain disruption has led to longer lead time and component shortage has led to rising raw material costs. 

“Nonetheless, the group has partly mitigated the risk by maintaining a high buffer of finished goods inventory and keeps close contact with suppliers for raw material,” it said. . 

VS Industry has also decided not to proceed with Victory Innovations Company Inc’s contract to manufacture and supply cordless electrostatic sprayers which the research bank believes would reduce the group’s revenue to RM800 million to RM1 billion for FY22F to FY24F. 

However, the advantage of cancelling the contract would mean there are now plans for new orders. 

Ambank Research forecast the company’s production would be fully ramped for up to six months beginning 3Q22.