GEORGE TOWN - Electronic products from Malaysia may face restrictions in entering the United States should the country be placed on a watch list by the US authorities on Dec 1.
Penang Chief Minister Lim Guan Eng said that the implications of being placed on a watch list included restricting Malaysia-made electronic goods from entering the United States.
Lim was speaking at a press conference after the Penang State Industrial Manufacturing Conference.
Also present at the press conference was Penang Deputy Chief Minister (1) Datuk Mohd Rashid Hasnon.
"The International Trade and Industry Ministry (Miti) and the Human Resources Ministry should work together to rebut the allegations published in the recent Verite report that the electronics industry in Malaysia made use of forced labour.
"The export of electronic products to Europe may also be affected, as Europe normally follows the footsteps of the US.
"There has been a delay in the response, as Miti has pushed the matter to the Human Resources Ministry to address," Lim said.
The Verite report, funded by the US Labour Department, released in September 2014 had alleged that 28 per cent of workers in the electronics industry were made up of forced labour.
Lim said the state government viewed the matter seriously, as about 50 per cent of the electronic products exported from Malaysia originated from Penang.
He added that investPenang had already addressed some of the issues with the US authorities, but it was only a state body with limited powers.
On Nov 17, Bayan Baru MP Sim Tze Tzin said in a media statement that the other consequences of being placed on a watch list might include the prohibition of US companies from doing business with Malaysian manufacturers, the shrinking of future foreign direct investment into Malaysia, and affecting also the export of electronic products to the US-Europe market, where labour practice compliance was required.
Meanwhile, the Free Industrial Zone, Penang, Companies Association chairman Heng Huck Lee said it could be a small and isolated group of companies that did not fully comply with international labour requirements and practices.
"The Malaysian authorities should act quickly against these companies and gather evidence and data to prove that the majority of the electronics companies are not engaging forced labour," Heng said.