KUALA LUMPUR: The United States Customs and Border Protection (CBP) has admitted that the legal threshold required to issue a Withhold Release Order (WRO) against any company is “fairly low”.

       The acknowledgement from two CBP officials come at a time when six Malaysian group of companies are currently banned from selling their products in the United States on allegations of using forced labour.

       The US federal agency also admitted that it does not consult or seek explanation from the companies involved, prior to issuing the WROs.

       Interestingly, the agency also does not send its officials to do on-site verifications on the forced labour claims.

       In a briefing with reporters yesterday, two officials from the CBP confirmed that a WRO can be issued as long as there are “reasonable suspicions” as required by the US law.

       Eric Choy, CBP executive director for trade remedy and law enforcement, said the agency’s decision is based on materials or sources which provide “reasons to believe that perhaps forced labour was used in the manufacturing.”

       Choy, however, said that companies named in the WRO have the “immediate” option to contact and discuss with the CBP on the possible ways to remedy the forced labour allegations.

       To date, eight WROs have been issued against Malaysian companies, and interestingly, all these companies are involved in glove manufacturing or oil palm plantations.

       Top Glove HQ

       Once a company is slapped with a WRO, its products will be prohibited from entering the United States until the WRO is modified.

       Among the companies affected by the CBP’s actions are Top Glove Corp Bhd, Sime Darby Plantation Bhd, Supermax Corp Bhd and FGV Holdings Bhd.

       “Allegations (of forced labour) could come in from investigative media, journalists, our inter-agency partners, other law enforcement sources, non-governmental organisations and the civil society.

       “When we receive those allegations, a lot of materials come along with that, as well as our own research and analysis that get us to a point where we corroborate information to get the reasonable level of suspicion,” said Choy.

       Choy also added that there will be “intense legal scrutiny” before a WRO is issued.

       Meanwhile, CBP deputy executive assistant commissioner for the office of trade John Leonard said the legal bar to reach the evidentiary status for a WRO issuance is “fairly low.”

       When asked whether the CBP’s decision to lift a WRO off a company is arbitrary, Leonard disagreed and said it is based on a considered process.

       Companies are required to prove that they have remediated the issues based on the 11 forced labour indicators of the International Labour Organisation.

       Eric pointed out that the CBP relies upon independent third-party auditors hired by the companies, in order to verify that forced labour is not used in the manufacturing process.

       “We validate what the auditors have identified and then we could modify the WRO,” according to him.

       The independent auditors would visit a company’s factory or workers’ dormitory unannounced and undertake vigorous audits on the company’s processes.

       Leonard also hinted that the CBP may, in the future, send its team to do the verifications.

       “With the pandemic and the movement control order in Malaysia, it was difficult to do that (sending officials). But we are not precluded from doing that at all,” he said.

       Leonard acknowledged that the WROs have had an economic impact on the country and the companies involved.

       “But again, it is simply a border enforcement issue,” he said.

       Commenting on the status of six active WROs, Leonard noted that progress is being made.

       He also said that there are a lot of encouraging signs within the industries in Malaysia affected by the WROs.

       Both Choy and Leonard, however, were tight-lipped when asked whether more Malaysian companies are being investigated for forced labour claims.

       Leonard pointed out that the Human Resource Ministry from Malaysia has been engaging with the agency, in order to solve issues revolving around forced labour claims.

       “It is a very positive collaboration and we are very happy with what Malaysia is doing. Yes, the governments are working together.

       “We do plan, at the suggestion of Minister Datuk Seri M. Saravanan, to form a committee. We welcome it and we may meet roughly quarterly, that’s an aspirational goal.

       “We had meetings this week and we really look forward to the collaboration,” he said.

       Out of the eight WROs issued thus far on Malaysian companies, two have been modified. This allows both companies to once again export their products into the United States.

       One such company is Top Glove.

       On Sept 9, 2021, the CBP announced that it has modified the forced labour finding on Top Glove.

       CBP deputy commissioner Troy Miller said the decision was made after Top Glove addressed all indicators of forced labour identified at its Malaysian facilities

       “Top Glove’s actions in response to the WRO, which include issuing more than US$30mil (RM131.7mil) in remediation payments to workers and improving labour and living conditions at the company’s facilities, suggest that CBP’s enforcement efforts provide a strong economic incentive for entities to eliminate forced labour from their supply chains,” said Miller in a statement.