Electronics Workers in Malaysia and the Right to Organize

On the high speed train linking Kuala Lumpur’s International Airport to the city center, television monitors broadcast promotions for the new Multimedia Super Corridor (MSC). The MSC is a 15 by 50 km industrial zone boasting a high-capacity global telecommunications and logistics network, and concessions on income tax and import duties for those who invest there. According to the government’s promotional materials, the government’s goal “is to provide an ideal multimedia environment that attracts topflight Malaysian and international IT and multimedia companies.” The MSC is one of a range of initiatives which, in line with Prime Minister Dr. Mahathir’s Vision 2020 Plan, seek to encourage foreign investment in the electronics sector. The electronics sector is already the country’s largest manufacturing export industry, employing 327,699 as of March 2003 and exporting US$49.4 billion of goods in 2002.

Since the 1970s, the Malaysian government has insulated investors in the electronics sector from national labor regulation. These ‘carve-outs’ occur in a number of ways. First, due to a series of administrative decisions within the Department of Human Resources, the electronics industry remains to this day the only major industrial sector in which there is no national union that can represent its workers. Second, investors in the manufacturing sector are encouraged by the government to seek “pioneer status” for projects that rely on a high degree of technological sophistication. In addition to a range of financial benefits, no collective bargaining agreement signed with a company granted “pioneer status” may contain economic provisions that are more favorable to workers than the minimums provided for in law.

Human Rights First sent a delegation to Malaysia in July 2003 to investigate the effects of these laws on freedom of association, and the extent to which subsidiaries of U.S. companies in Malaysia are relying on these laws to prevent factory workers from organizing. A full report will be available in the fall.