Sleeping 12 to a room and on 91p an hour: life in Malaysia making condoms for the West
Mahesh Thapa has a look of desperation in his eyes. The young Nepali father travelled more than 2,000 miles from Kathmandu to work at the world’s largest condom-making company in Malaysia, sacrificing a life at home with his two young children to pay for their food and education.
He had hoped his job at a factory supplying condoms to the NHS and major high street brands including Tesco, Boots and Superdrug would secure his family’s future.
But now, almost two thirds of the way through his three-year contract at the Karex Innolatex factory in Port Klang, near Kuala Lumpur, Mr Thapa is worried that they cannot survive on his 91p an hour basic salary.
He told The Daily Telegraph his overtime had dried up, leaving him struggling to support his mother, wife and children. He earns just £190 a month despite working eight hours a day, six days a week. “I have a family, and I have to eat and survive here. Without overtime I can’t support them. What should I do?” he pleaded.
Returning home is not a viable option. Like many workers in Malaysia, Mr Thapa fears he would incur a penalty of three-months’ salary if he broke his contract early.
He also remains indebted to a creditor, who lent him the £810 fee demanded by Nepali recruiters to secure the post. They promised he would earn twice as much as he is
– the reason he took on the contract.
The Telegraph talked to 22 Nepali and Bangladeshi employees of Karex’s factories in Pontian, Senai and Port Klang last week. Despite the products they produce being supplied to some of the world’s biggest and most “ethically conscious” brands, all told similar stories.
Some Karex workers were living in undignified conditions, housed up to 12 in a room in damp and unhygienic dormitories. For £9 a month deducted from their wages, workers in Pontian received half of a steel bunk bed – but no mattress – a piece of string on the wall for a wardrobe, access to a filthy broken lavatory, and a kitchen consisting of two gas burners.
According to Forbes, Karex produces five billion condoms a year, accounting for roughly 15 per cent of the world market. It has a turnover of nearly £70million and its senior director, Goh Siang, is listed as one of Malaysia’s richest men.
On the company website, a corporate video claims the firm is “helping humanity one condom at a time”. It says it “champions social responsibility and sustainability”.
Karex owns the Sussex company Pasante Healthcare Ltd, through which it distributes its products in the UK. Pasante’s website says its condoms are the “brand of choice” for many in the NHS. Its clients include Tesco, Boots, Superdrug and Costco. Karex boasts a “clientele of governments, NGOS, brand owners and retailers in over 130 countries”. These have included Marie Stopes International, Reckitt Benckiser, the owner of Durex, and Global Protection Corp, which distributes the ONE condom brand.
Karex said yesterday it “does not believe that forced labour or modern slavery is currently occurring at our factories”. However, Goh Miah Kiat, the Karex CEO, said the company recognised it was “critical to shed light on unfair labour practices” and took the allegations “extremely seriously”.
A complete review of hiring, retainment and compensation policies was already under way, he said, and the group would hire “an independent firm specialising in ethical trade, human rights, labour standards” to carry out a “full social analysis” within 45 days. A committee of management and employees would also be created.
Testimonies from the firm’s South Asian migrant workers, many from desperately poor backgrounds, and supporting families back home, paint a bleak picture. All those interviewed by
The Telegraph said they would struggle to survive without daily overtime. While their basic monthly salary of 1,000-1,100 ringgit (£190) meets Malaysia’s legal minimum wage requirements, evidence from workers, backed by data from the Wageindicator Foundation and the Central Bank of Malaysia, raises concerns about whether it could be properly called a “living wage”.
The Ethical Trading Initiative, which promotes a code of conduct on workers’ rights that many British retailers have signed up to, describes a living wage as “enough to meet basic needs and to provide some discretionary income”. Employees should be able to earn this within regular working hours and without resorting to excessive overtime.
Most Karex workers interviewed by
The Telegraph claimed to regularly work 12-24 hours of overtime a week to boost their income and were fearful of losing those extra hours.
The workers’ financial woes are compounded by fees demanded by recruitment firms and brokers in their home countries, which leave them in debt bondage for much of their first year of employment.
Nepali workers said they paid between £810 and £1,147 – financed mainly by loans at 2-5 per cent – despite a Nepal government cap of £67 on migration fees introduced in 2015.
In Bangladesh, recruitment premiums are even higher, with workers citing charges from £2,300 to £3,405. “Bangladesh has a population problem. There are no jobs, so people have no choice,” said one young man from Jhenaidah district.
Karex did not specifically address the question of a living wage, but said workers could receive salary adjustments after annual reviews.
The company said it had frozen the recruitment of foreign workers earlier this month until it could ensure they were hired “without incurring debt”. Since Jan 1 workers can also now terminate their contract at any time without penalty.
Mr Goh said Karex contracted with a number of privately owned hostels and was working to ensure upgrades. The company plans to move 250 employees – 25 per cent of its foreign workforce – to a new dormitory this month, while the £9 charge was stopped on Jan 1.
Dr Mahmood Bhutta, founder of the British Medical Association’s Medical Fair and Ethical Trade Group, said: “The NHS purchases large volumes of healthcare goods … that are produced in Malaysia. However the NHS has not yet implemented effective or sustained processes in the supply chains it uses for protecting workers, like these”.
Karex’s clients expressed concerns about The Telegraph’s findings and all said they would take action where necessary.
An NHS Supply Chain spokesman said: “We take all allegations concerning labour standard abuses very seriously and have contacted the supplier about this matter.”
Superdrug said it had worked with Karex for three years without problems. However, it said it had suspended all orders with the Karex Group while investigating further.
Tesco said it had also visited the factory last week and had identified “a number of serious concerns”. It added: “We suspended Tesco production at the site pending further investigation.”
Reckitt Benckiser said that although only one per cent of its condoms were outsourced to Karex, it had a “zero tolerance” policy on human rights abuses.
Marie Stopes International said that “in light of this investigation we can confirm that we will not place orders with Karex in the future”.
Boots had not replied at the time of going to press and USAID could not respond because of the US government shutdown.
Workers’ names have been changed to protect their identities.
‘I have a family and I have to eat and survive here. Without overtime I can’t support them. What should I do?’ ‘The NHS has not yet implemented effective processes in the supply chains for protecting workers like these’