Dyson splits with Malaysia supplier, stoking concern over migrant worker treatment

JOHOR BAHRU, Malaysia: A short drive across the border from Dyson's new headquarters in Singapore is the boomtown built around its business: a Malaysian industrial area dominated by its biggest supplier, ATA IMS Bhd.

After questions from Reuters on Nov. 18, Dyson last month said it would pull its business https://www.reuters.com/business/exclusive-dyson-terminates-relationship-with-malaysian-supplier-ata-over-labour-2021-11-25 from ATA in six months, citing a recent independent audit on conditions for workers and allegations by an unidentified whistleblower.

The country's human resources minister, M. Saravanan, said forced labour allegations at Malaysian companies were hurting foreign investors' confidence in products manufactured there. He had earlier said the government was investigating Dyson's decision https://www.reuters.com/markets/europe/analysts-see-years-losses-malaysias-ata-after-major-client-dyson-cuts-ties-2021-11-26 to split with ATA.

ATA officially employs around 8,000 workers, although four ATA workers and the former executive estimated its workforce had been as high as 17,000 until recently, including those without permits. Most of 17,000 were from Bangladesh and Nepal, according to the workers and executive.ATA's factories are concentrated in adjacent industrial parks in suburban Johor Bahru, a 30-minute drive to Singapore, where Dyson is headquartered.

Malaysia, which makes everything from iPhone components to semiconductors, is reliant on electrical and electronics manufacturing in particular for exports and economic growth. Between January and October 2021, such products accounted for 36per cent of total exports. "We need your cooperation… Please brief all the employee… to avoid issue during audit," read the message, dated July 2 and seen by Reuters.

Limbu said that in June, ATA officials took him to a police station, where he was questioned about sharing information with activists, then beaten by police. He fled Malaysia and is now back in Nepal. Limbu told Reuters he told Dyson's lawyers about the ATA working conditions in an interview on Oct. 1.

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