Having had very few human rights incidents compared to other sectors, has the bicycle industry been too naive about the quality of its Asian suppliers?
Source: https://www.bike-eu.com
The Japanese component manufacturer sources group set components from Kwang Li Industry in Malaysia. According to the Telegraph report, this company has been accused of exploiting migrant workers from Nepal and documents a case of physical abuse against a Bangladeshi worker.
“Workers at Shimano’s Malaysian supplier, Kwang Li Industry, say they have been subjected to physical abuse and threats, illegal salary deductions and hiring fees, and unpaid suspensions,” the Telegraph report said.
In response to the newspaper's revelations, Shimano says it has launched an investigation into Kwang Li and is working to bring the workers to justice "as soon as possible." Andy Hall, a British workers' rights specialist, said the experience of workers in the Kwang Li industry meets many of the International Labor Organization's (ILO) indicators of forced labor and is "akin to modern slavery."
Effect of market cooling
Shimano has been operating in Malaysia since 1990. The company was forced to close its factories in the country in July 2021 due to COVID. This caused significant supply chain disruptions in 2021 and 2022, the effects of which are still being felt today. Instead of opening new factories during this period, Shimano increased production at existing facilities, recruiting more migrant workers from countries such as Nepal and Bangladesh. According to the Telegraph, in September 2022, Kwang Li Industry began a hiring drive to support factory production, but this turned out to be incorrect. In February 2023, Shimano warned that “strong interest in cycling during the Covid-19 pandemic” was showing “signs of cooling”.
This drop in demand was also reflected in the Kwang Li Industry factory, where in some weeks workers were only needed for three or four shifts. However, “the company only pays for working days,” one worker said. The Telegraph also reported that a former worker, who moved from Nepal to Malaysia in January, said he was forced to resign after just six months on the job. A situation that left him heavily in debt due to the high hiring fees he was forced to pay.
Isolated incident or tip of the iceberg?
The (European) bicycle industry is now placing greater emphasis on sustainability and ESG objectives, including ethical working conditions throughout the supply chain. For this reason, an increasing number of audits are reportedly taking place around the world to monitor Level 1,2 and Tier 1,2 conditions. 1,2 suppliers. Could these checks prove that this is the tip of the iceberg or an isolated incident?
