MALAYSIA: COMMENTS ON DRAFT LIST OF CHILD/FORCED

C O N F I D E N T I A L KUALA LUMPUR 000047

SIPDIS

FOR EAP/MTS, EEB/CBA, DRL/IL/MITTELHAUSER, AND G/TIP/STEINER
LABOR FOR ILAB RACHEL RIGBY
STATE PASS TO USTR

E.O. 12958: DECL: 01/23/2014
TAGS: PHUM ELAB EIND ETRD SOCI MY
SUBJECT: MALAYSIA: COMMENTS ON DRAFT LIST OF CHILD/FORCED
LABOR PRODUCTS

REF: A. STATE 1730

B. 08 KUALA LUMPUR 460

Classified By: Political Counselor Mark D. Clark for reasons 1.4 (b and
d).


1. (C) Post appreciates the opportunity to comment on the
Department of Labor's (DOL) draft Trafficking Victims
Protection Reauthorization Act (TVPRA) report (ref A),
containing a list of goods associated with forced or child
labor. DOL's procedural guidelines for evaluating
information for the TVPRA list include the criterion of
whether the information indicates a "significant incidence"
of child or forced labor. In the case of Malaysia's
electronics industry, we are aware of only a few credible
reports of forced labor in the electronics sector. We are
not aware of a broader survey of Malaysia's vast electronics
industry that indicates a significant incidence of forced
labor. Malaysia's electronics industry employs approximately
450,000 workers, and represents roughly 60 percent of
Malaysia's manufactured exports and 44 percent of total
exports per 2007 data. Total cumulative U.S. direct
investment in Malaysia's electronics industry stood at $4.5
billion as of July 2008, with 17 US-based companies listed
with the American Malaysian Electronics Industry, a
sub-chapter of American-Malaysian Chamber of Commerce.


2. (C) The Embassy does not have information that warrants
including electronics as a product category in the DOL list.
Prior to finalization of the list, the Embassy requests the
opportunity to review other information that may be available
to DOL. If credible information on the incidence of forced
labor in the production of electronics is not available, we
recommend deletion of electronics from the list, per DOL's
procedural guidelines.


3. (SBU) The Embassy's original submission included
important qualifiers regarding both the quality of
information available and the prevalence (or lack of
information on the prevalence) of forced/child labor in
producing certain goods (ref B). In particular, we noted
that "Embassy sources do not have credible estimates of the
extent of forced labor and exploitative child labor" in the
two sectors covered by the Embassy's report. It is not clear
to us whether DOL's listing will convey any such perspective
relative to Malaysia or other countries, absent which the
user of this list may assume the use of forced/child labor is
widespread in production of these products and that our
knowledge of this is authoritative. If we make no
qualification regarding the quality of information and the
prevalence of suspected child/forced labor, we risk damaging
the credibility and potential impact of the list in the face
of the strong host government and industry challenges we are
certain to receive.


4. (C) Embassy recommends that DOL's list include clear
qualifications as to the limited extent of credible
information available on child/forced labor related to the
two other Malaysian product categories (garments, palm oil).
KEITH