A better future for Malaysia in the world
(Left to right) – CHAN Wone Fu – CEO, Anil Taneja – Chairman of the Social Compliance Working Group, Lim Kwee Shyan – PP, Hue Kon Fah – VP, Dr. S Supramaniam – Chairman (P), Denis Low – IPP, Dato ‘KM Lee – PP, Geerija Menon – ESG Director
The Malaysian Rubber Glove Industry (RGI) is fully committed to full environmental, social and governance (ESG) compliance in its drive to be an exemplary global citizen. We are opening a new chapter of total strategic movement in compliance and we tolerate no apologies as we move forward as the world’s leading producer.
Malaysia is the world’s largest supplier of medical gloves, meeting 68% of the global demand for this necessity over the past 30 years. Today, this industry continues to be a major contributor to Malaysia’s gross domestic product with export earnings expected to reach RM 55 billion for the year 2021.
The current global COVID-19 pandemic has changed the way companies deal with ESG practices with customers, employees, investors, regulators, NGOs and society at large.
All of our industry members stand with me to move forward to rectify, repair and rediscover our principles of protecting and preserving our environment, to ensure the well-being and well-being of all our employees in within the framework of the social chapter and to safeguard good ethical practices in the governance of our company.
ENVIRONMENTAL – Objectives to reduce GHG emissions in operations by 10% and become carbon neutral by 2050
The Malaysian RGI regularly checks that carbon dioxide emissions and wastewater discharges comply with the authorized limits set by the Ministry of the Environment. The purification systems are being upgraded to cap the emission limits of bad odors authorized by the 2014 regulation on the quality of the environment (clean air).
In the 12th Plan Malaysia, Malaysia pledged to become a carbon neutral nation where any carbon dioxide released into the atmosphere is offset by an equivalent amount sequestered. MARGMA, likewise, says the glove manufacturing sector will reduce greenhouse gas emissions from factories by 10% and become carbon neutral by 2050.
Extensive R&D is underway within the industry as well as MARGMA’s collaborative work with the Malaysian Rubber Board (MRB) and Malaysian Rubber Council (MRC), in the areas of water conservation, biodegradability, energy efficiency initiatives, alternative energy sources, sustainability and green labeling. of rubber gloves made in Malaysia.
A dynamic downstream ecosystem has been developed in which circular economy initiatives have been developed: recovery of waste rubber to transform it into other rubber products. Improved biodegradability of gloves, less stress on landfills.
SOCIAL – Management of the 11 ILO indicators on forced labor: debt bondage, adoption of a zero cost policy, achievement of zero health and safety deaths, towards social audit compliance, to develop a ISO standard on social compliance
The industry sees the whole world as its community, and it places particular emphasis on outreach programs that meet health and humanitarian needs.
We rose to be counted during the COVID-19 pandemic in which industry players donated gloves to local hospitals, frontline national security officers, and governments in China , Nepal and African countries. Significantly, Top 4 Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd collectively donated RM400 million to the Malaysian government’s COVID-19 fund. In addition, the MARGMA Foundation grants scholarships and financial assistance to children of single mothers and rubber tappers.
Currently, RGI’s workforce is made up of 45% local and 55% foreign workers (FW), representing less than 1% of the total FW in Malaysia. RGI has a 5-year plan to further reduce the FW ratio to 40%, or about 3% per year. This will be facilitated by last mile automation as well as advancements in manufacturing practices. In an effort to encourage more locals to seek careers in the glove industry, MARGMA is embarking on targeted training for Malaysians wishing to join the rubber glove industry workforce. This certification program to be launched in 2022, designed by MARGMA, is a joint effort with MPIC, MRB and MRC.
As manufacturing industries mature in developing countries in Asia, so do the needs of raising living standards and human rights practices relative to those in countries developed. MARGMA, with input and guidance from the International Labor Organization (ILO), has improved its code of conduct on social compliance for all of its members. To increase global oversight, MARGMA members have all agreed by resolution to be registered with the Supplier Ethical Data Exchange (SEDEX) and to submit to the Sedex Member Ethical Business Audit (SMETA). SMETA’s measurement criteria are in line with the Ethical Trading Initiative (ETI) Core Code, which in turn is based on both international standards and ILO conventions. SMETA focuses on the pillars of work, health, safety and the environment to determine good business ethics.
MARGMA works with various stakeholders to organize webinars and educate its members. We recently partnered with the University of Nottingham, in partnership with the UK High Commission, to provide training on labor compliance. This was followed by a collaboration with the ILO on the Decent Work in the Rubber Supply Chain Project, whereby the ILO will provide MARGMA members with various trainings on the 11 ILO indicators.
To end debt bondage, the members of MARGMA have adopted since November 2019 a zero cost policy in the recruitment of foreign workers. For FWs, arriving before 2019 and still in debt due to high agency fees paid to unscrupulous agents in home countries, our members embarked on an arduous and complicated debt assessment exercise to determine the actual debt and continued. correct accordingly. Debt bondage is now well managed as most of our members have remedied their workers’ payments on past debts, if any.
By advocating for transparency, MARGMA works with the International Organization for Migration (IOM), an organization linked to the United Nations, to facilitate ethical recruitment practices among recruiting officers. With transparent L-to-L agency fees and ethical recruiting in place, unscrupulous agents will be weeded out. This, together with the zero cost policy, will ensure that debt bondage does not occur in the future.
MARGMA members are now working diligently to expand and improve worker hostels in accordance with the Minimum Workers’ Housing and Equipment Standards Act 1990 (Act 446). This is a capital and time intensive process and MARGMA is constantly engaging with the Department of Human Resources and the Department of Housing and Local Government on this initiative.
GOVERNANCE – Ethical and fair business practices
The rubber gloves industry is a healthcare manufacturing industry, and constantly invests in strict quality control to meet safety and security standards. Members currently undergo approximately four levels of audits, including internal audits, client-focused audits, independent third-party audits, and government audits by the Department of Human Resources.
Recently, one of our members was the only Malaysian healthcare manufacturing company and one of three healthcare companies to feature in the Dow Jones Sustainability Indices. Some of our other members are on the FTSE4Good Bursa Malaysia index which rates companies listed on Bursa Malaysia for their environmentally friendly practices, anti-corruption, corporate governance and labor standards. This clearly indicates the exceptional commitment and dedication of our members to ESG practices.
MARGMA, which represents 95% of glove manufacturers and associated members of the supply chain, must be the world leader, not only by the quantity of gloves exported, but also as the world leader in the rubber glove industry. . Work has started to establish Malaysia as; a) The International Rubber Gloves Innovation Center; b) Permanent Secretariat of the International Federation of Glove Manufacturers; and c) An international glove magazine with global distribution, hosted by Malaysia; d) Development of a 10-year master plan for the Malaysian rubber glove industry.
The way forward for RGI Malaysia is to improve our existing USPs in terms of quality, quantity, on-time delivery, affordability and loyalty. To this we must add our new strengths in ESG and global leadership, resulting from all of the above initiatives from our industry members.
By the president of MARGMA
Dr Supramaniam Shanmugam