Sanders is right: Migrant laborers in Malaysia are forced into working under 'slave-like conditions'

Bernie Sanders lines up fairly close to Donald Trump when it comes to the topic of trade.

To some, that means Sanders has some explaining to do. In an interview with the New York Daily News, Sanders attempted to detail his position. It’s about a fundamental inequity in labor standards, Sanders suggested, enabling human rights abuses at the cost of American jobs.

"I do believe in trade. But it has to be based on principles that are fair," Sanders said. "So if you are in Vietnam, where the minimum wage is 65¢ an hour, or you're in Malaysia, where many of the workers are indentured servants because their passports are taken away when they come into this country and are working in slave-like conditions, no, I'm not going to have American workers ‘competing’ against you under those conditions."

Sanders has made trade a big topic on the campaign trail — highlighting Hillary Clinton’s comments and votes in favor of trade deals. (PolitiFact has documented a lengthy comparison of the two.)

Here, we wanted to fact-check Sanders’ claim that workers in Malaysia — which would be part of the Trans-Pacific Partnership — are forced into working under "slave-like conditions."

In a word, yes. Not only is forced labor widely documented by labor and human rights groups, it’s openly acknowledged by the U.S. government.

From cell phones to sneakers to palm oil

The Sanders campaign referred us to a 2014 report from Verité, an NGO that monitors labor standard compliance. Verité interviewed 501 workers in Malaysia’s electronics industry (the country’s leading sector), and found that 28 percent of them were coerced under both global standards and Malaysian law.

"This work has led us to conclude that forced labour in this industry is systemic and that every company operating in this sector in Malaysia faces a high risk of forced labour in their operations," Dan Viederman, chief executive of Verité, told the Guardian in 2014.

The International Labor Organization, an agency of the United Nations, defines forced labor using four dimensions: unfree recruitment, work and life duress, impossibility of leaving an employer and penalty or menace of penalty. The Malaysian electronics industry violated all these guidelines in some capacity.  

Like the indentured servants who came to America in the 18th century, the vast majority of foreign workers — largely from other parts of Southeast Asia —  were charged excessive job-finding fees and had to take on debt to pay them off, effectively tethering them to the job (unfree recruitment).  

One in five workers were also deceived about their wages or other employment conditions, and one in three lived in and often confined to crowded, unsafe housing provided by their employer or recruitment agency (work and life durres).

Verité also found that 94 percent of workers had their passports withheld by the factory or agent (penalty), though the practice is prohibited by local labor laws . Fifty-seven percent said they couldn’t leave their jobs out of fear of getting slapped with high fines, losing their passport, being reported to the authorities or other forms of retribution (impossibility of leaving an employer).

But forced labor is by no means limited to one sector. Malaysia has the fourth-largest migrant worker population in the world, and its 3 million to 6 million foreign workers "all are vulnerable to exploitation in a variety of industries," said Abby McGill, the campaigns director for the International Labor Rights Forum.

The State Department notes that passport confiscation was "widespread and generally unpunished," and has placed Malaysia in its Tier 3 watch list for human trafficking — the rating reserved for the worst offenders — in 2001, 2007, 2009 and 2014.  In addition to electronics, the U.S. Labor Department currently lists the garments and palm oil industries where labor abuses occurs (palm oil is also cited for child labor).

Human Rights Watch reported on exploited migrant domestic workers in 2011.  Amnesty International chronicled the stories of trafficked, trapped and physically and sexually abused workers in a variety of industries from agriculture to construction in 2010.

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Free trade and chained work

The debate over whether free trade stymies, improves or has no bearing at all on working conditions is an ongoing one.

International labor standards are actually included in many trade agreements.The United States monitors worker conditions in partner countries, and has spent $275 million to support labor rights since 2001, according to a 2014 Government Accountability Office audit.

But despite this, the GAO concluded that there’s still a lot of room for improvement. The USTR and Labor Department "lack a strategic approach to systematically assess whether partner countries’ conditions and practices are inconsistent with labor provisions in (free trade agreements)," according to the audit.

Academics have also pointed out these provisions are often ambiguous, difficult to enforce or simply ignored. In other words, agreements on paper don’t necessarily translate to improved conditions in real life.

Malaysia is actually a prime example of labor rights possibly taking a backseat to free trade. In 2015, it was upgraded to Tier 2 for human trafficking by the State Department over the objections of its own human rights experts. Many perceived the move to be politically motivated, as the improved rating made the country eligible to join the TPP.

Because of Malaysia’s poor labor record, it also signed a bilateral agreement with the United States, promising to implement workers rights and protect against forced labor before obtaining trade benefits. Human rights and labor rights groups, however, are skeptical this will lead to actual reform.

"The devil is in the details of actual implementation, and Malaysia is a very corrupt place where those with connections and money can get away with not complying with the law – as both Malaysian and migrant workers have found out frequently over the past two decades," said Phil Robertson, the deputy director of Asia at Human Rights Watch.

Said McGill of the International Labor Rights Forum: "Given that they get everything they want upfront whether they change anything or not (not an ideal negotiating strategy), the labor enforcement provisions are so weak there isn't a stick to force them to comply. That approach has never worked in the history of free trade agreements. No reason to think it will start now."

Nonetheless, many have argued you can have your free trade and be humane, too. A 2010 study, for example, found that labor conditions have improved in Cambodia as a result of labor provisions in a trade agreement signed with the United States. But many argue that improved working conditions are actually a cascading effect of global trade, not regulation itself.

"The kinds of adjustments that go with free trade, while painful in the short run, lead to improved labor conditions in the long run," Stanford labor economist Robert Flanagan said in an interview about his book, Globalization and Labor Conditions.

Gary Burtless, a labor economist at the Brookings Institution, acknowledged that some are certainly worse off as a result of global trade. He pointed out that working conditions were terrible in the United States a century ago, but improved when the economy developed and standard of living rose.

"Do we really think it would a good idea for the U.S. not to have been able to trade in 1916 or 1886?" Burtless said. "It is very hard to think of anything that has delivered a bigger improvement in the lives of poor workers than expanding their ability to sell to other countries. Period. End of story. To pretend otherwise, that you’re going to protect their workers by keeping their products out of our country, flips on its head policies most conducive to improving their lives."

Our ruling

Sanders said, "In Malaysia … many of the workers are indentured servants because their passports are taken away when they come into this country and are working in slave-like conditions."

Forced migrant labor and passport withholding is widely documented across Malaysia by human rights and labor groups. The United States acknowledged the abuses in several government reports and databases.

While there is a debate about whether free trade can help curtail these abuses, there is no debate to the veracity of Sanders’ claim. We rate it True.