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US-backed study finds forced labor at core of electronics industry

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At Malaysian electronics factories, nearly one third of all migrant workers are effectively trapped in their jobs

Migrant workers at electronics factories in Malaysia are suffering under forced labor, according to a US-backed report released this week. The report from Verité, a Massachusetts-based labor watchdog, finds that 32 percent of the approximately 350,000 migrants employed at Malaysian factories have been effectively trapped in their jobs, after being forced to hand over their passports or paying steep recruitment fees that saddle them with debt. The study does not mention any technology companies by name, though the electronics sector comprises a major part of the Malaysian economy, and companies like Apple, Samsung, and Sony have suppliers there.

"unlawful and unethical recruitment practices."

"Verité's study is the most comprehensive look at forced labor in the Malaysian electronics sector to date," Verité CEO Dan Viederman said in a statement Wednesday. "Our report provides a clear sense of the scope of the problem in the industry, as well as the root causes underlying this egregious form of abuse, which center on unlawful and unethical recruitment practices."

Verité's study follows a two-year investigation that was commissioned by the US Department of Labor. Of the 501 migrant workers interviewed, 92 percent paid recruitment fees to gain employment, and 94 percent said their passports were confiscated by their employers. More than three quarters (77 percent) of workers who paid recruitment fees said they had to borrow money to pay them, and 92 percent paid fees beyond industry standards (greater than one month's salary). Many of the migrants hailed from countries like Nepal, Bangladesh, and India.

Many faced harsh living conditions, as well. Thirty percent of those surveyed reported sleeping in rooms with more than eight people, and more than 40 percent said they had no place to secure their belongings. Twenty two-percent said they had been deceived about their wages, resulting in what Viederman calls a "one-two punch" — exorbitant recruitment fees and low wages.

Major technology companies have come under fire in recent years for alleged labor abuses in their supply chains, and several have sought to mitigate them with stronger oversight and audits. Chris Gaither, an Apple spokesman, told the New York Times that the company employs around 18,000 people and 4,000 migrant workers in Malaysia, where it has about 30 suppliers. Apple has worked to help migrant workers reclaim millions of dollars in recruitment charges since 2008, though Viederman says stronger monitoring from the industry and government is needed.

"This most modern of industrial sectors is characterized by a form of exploitation that long ago should have been relegated to the past," Viederman told the Times. "The problem is not one of a few isolated cases. It is indeed widespread."