KUALA LUMPUR (REUTERS) - Malaysia's Top Glove Corporation said on Monday (Aug 10) it had begun making remediation payments to migrant workers who were employed by the world's largest medical glove maker before 2019, when it put in place ethical recruitment practices.
The United States is a major market for medical gloves, which have seen huge demand as a result of the Covid-19 pandemic, and last month the US Customs and Border Protection (CBP) placed a detention order on imports from two of Top Glove's subsidiaries.
Such action is normally taken by the CBP against companies suspected of using forced labour. Foreign workers are often charged a fee by employment agents to land jobs in Malaysia, a debt they then work to pay off.
Top Glove said in a stock exchange statement that it had made the first remediation payment of RM4.4 million ringgit (S$1.4 million).
"The total remediation fee to be paid is estimated at RM53 million, subject to finalisation with the US Customs and Border Protection (CBP)," it said, adding that it "continues to actively engage with the US CBP towards resolving the Withhold Release Order (WRO) expeditiously".
It had earlier said it had made progress in engagement with the CBP and hoped to resolve the matter this month.
Top Glove is dual-listed in Malaysia and Singapore. Its Singapore shares closed down one cent or 0.1 per cent at $9.29 on Friday.
Smaller rival Hartalega Holdings Bhd earlier said that from the fourth quarter it will reimburse up to a total of RM40 million in recruitment fees previously paid by migrant workers to employment agents.
Another rival Supermax Corporation Bhd said its net profit for the quarter ended June 30 had risen from RM15.06 million to RM399.62 million.
It said this was its "best quarterly financial performance" and had been driven by an exponential rise in demand for gloves and an increase in production capacity, which it plans to almost double by the end of 2022.