First Solar audit reveal forced labour practices in Malaysia

The firm have since undertakes corrective actions and updated their site service to prevent any recurrence of the issue

THE largest US-headquartered solar photovoltaics (PV) manufacturer has revealed incidents of forced labour practices at its Malaysian plant.

In its just-released sustainability report for 2023, the company, First Solar Inc, said the report found that the four onsite service providers in Malaysia employed foreign migrant workers who were subjected to unethical recruitment including the payment of recruitment fees in their home countries, passport retention and unlawful retention of wages.

“As a result of the findings and our corrective actions, the service providers have since returned all passports and unlawfully retained wages to the workers, and we have updated our site service agreements to prevent any recurrence of the issue.

“Furthermore, after developing a reimbursement plan with a third party, we are now working with our onsite service providers to ensure the recruitment fees are reimbursed to their current and former employees,” the company said in the 78-page report.

The revelation is the latest to tie the fast-growing solar energy industry to concerns about forced labour, according to media reports.

The report also throws light on the abuses of labour practice abuses in Malaysia, with a number of corporations taken to task by the US authorities.

First Solar is headquartered in Tempe, Arizona, with regional offices globally and manufacturing facilities in Perrysburg and Lake Township, Ohio; Kulim, Malaysia; and Ho Chi Minh City, Vietnam.

First Solar Malaysia started its operation in 2008 and is the largest high-technology manufacturing site for First Solar’s advanced thin film PV modules. Construction is underway for the Kulim Module Assembly facility where the next generation of First Solar’s modules will be built. The 65ha Kulim site employs over 4,000 local associates from the region, according to information on the company available at a chamber association website.

In July 2022, the then Deputy Human Resources Minister Datuk Awang Hashim told the Dewan Rakyat that eight Malaysian companies from the palm oil and rubber sectors were slapped with a Withhold Release Order by the US Customs and Border Protection in the past two years.

They included major glove makers Top Glove Corp Bhd and Supermax Corp Bhd, as well as plantation companies Sime Darby Plantation Bhd and FGV Holdings Bhd.

In the audit report released today, First Solar noted that while the solar industry continues to come under intense scrutiny due to the crystalline silicon supply chain’s exposure to forced labour in Xinjiang, it has “doubled down” on its commitment to responsible solar, with a particular emphasis on zero tolerance for forced labour.

“We are already starting to see the results. While our manufacturing facilities in the US and Vietnam achieved platinum status, the highest possible validated assessment programme rating, the audits also uncovered the fact that four service providers at our Malaysia facility fell short of our standards,” it said.

The report added, “We highlight this information openly, not only because of our commitment to transparency and ‘Responsible Solar’, but also to raise awareness of modern slavery risks that hide in plain sight and to illustrate the value of an independent third-party social audit conducted in a credible, comprehensive manner.

“The intent behind investing in these audits is not to rubber-stamp compliance with our policies but to identify and remedy existing and potential issues and ensure that we continuously improve on our commitment to Responsible Solar.”

In a separate statement, First Solar claims that the 2023 sustainability report has established a new industry benchmark for transparency by making public details of onsite third-party social audits conducted across its global manufacturing footprint in what is believed to be an industry first.

First Solar said it believed to be the first among the world’s largest solar manufacturers to have conducted third-party social audits across its operational global manufacturing footprint. — TMR / pic BLOOMBERG