(From left) Margma’s ESG Drivers CEO Chan Wone Fu, social compliance task force chairman Anil Taneja, past president Lim Kwee Shyan, vice-president Hue Kon Fah, president Dr Supramaniam Shanmugam, immediate past president Denis Low, past president Datuk K.M. Lee and ESG director Geerija Menon.
THE Malaysian Rubber Glove Industry (RGI) is fully committed to upholding environmental, social and governance (ESG) compliance in its stride to be an exemplary global citizen while moving forward as the leading producer for the world.
Malaysia is the world’s biggest supplier of medical gloves, satisfying 68% of the global demand for this necessity for the past 30 years.
Today, this industry continues to be a significant contributor to Malaysia’s gross domestic product (GDP) with export revenue projected to hit RM55bil for the year 2021.
“The ongoing global Covid-19 pandemic has shifted how businesses are managing ESG practices with customers, employees, investors, regulators, NGOs and the wider society.
“All our industry members stand together with me to forge ahead to rectify, to remediate and to rediscover our principles in protecting and sustaining our environment, to ensure the welfare and well-being of all our employees under the social chapter and to safeguard good ethical practices in governance of our business,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Dr Supramaniam Shanmugam.
Environmental: Aims to reduce GHG emissions in operations by 10% and become carbon neutral by 2050
The Malaysian RGI regularly ensures carbon dioxide emissions and effluent water discharge conform to the permissible limits set by the Department of Environment. Scrubber systems are upgraded to cap malodour emission limits allowed by the Environmental Quality (Clean Air) Regulation 2014.
Extensive R&D is ongoing within the industry as well as Margma’s collaborative work with the MRB and MRC.
In the 12th Malaysia Plan, Malaysia committed to becoming a carbon-neutral nation where any carbon dioxide released into the atmosphere is balanced by an equivalent amount being sequestered. Margma, likewise, declares the glove-making sector would reduce greenhouse gas emissions from factories by 10% and become carbon neutral by 2050.
Extensive R&D is ongoing within the industry as well as Margma’s collaborative work with the Malaysian Rubber Board (MRB) and Malaysian Rubber Council (MRC), in areas of water conservation, biodegradability, energy efficiency initiatives, alternative energy sources, sustainability and green labelling of Malaysian-made rubber gloves.
A vibrant downstream ecosystem has been developed wherein circular economy initiatives have been developed, reclaiming rubber waste for manufacture into other rubber products. Improved biodegradability of gloves places less stress on landfills.
Social: Managing the ILO’s 11 indicators of forced labour
The industry considers the entire globe to be its community and places special emphasis on outreach programmes that address healthcare and humanitarian needs.
During the Covid-19 pandemic, the industry players donated gloves to local hospitals, national security frontliners and also the governments of China, Nepal and African countries.
Significantly, the top four players – Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd – collectively donated RM400mil to the Malaysian government’s Covid-19 fund. Additionally, the Margma Foundation accords scholarships and financial aid to children of single mothers and rubber tappers.
‘The Malaysian RGI is currently taking a significant drive towards sustainability to meet global standards of ESG to enhance Malaysia's global standing,’ said Dr Supramaniam.
Currently, the RGI workforce is made up of 45% locals and 55% foreign workers, representing less than 1% of total foreign workers in Malaysia. The RGI has a five-year plan to further reduce the foreign workers’ ratio to 40%, or roughly 3% per year. This will be facilitated by the last mile automation as well as advancements in manufacturing practices.
To encourage more locals to seek a career path within the glove industry, Margma is embarking on focused training for Malaysians joining the RGI workforce. Designed by Margma, this certification programme will be launched in 2022 and is a joint effort with the Ministry of Plantation Industries and Commodities (MPIC), MRB and MRC.
As manufacturing industries are maturing in developing countries in Asia, so are the needs to raise the living standards and human rights practices with those of developed countries.
With inputs and guidance from the International Labour Organisation (ILO), Margma has enhanced its code of conduct on social compliance for all its members.
To augment global surveillance, Margma members have agreed via a resolution to be registered with Supplier Ethical Data Exchange (SEDEX) and undergo the Sedex Members Ethical Trade Audit (SMETA). SMETA’s measurement criteria is in sync with the Ethical Trading Initiative (ETI) Base Code, which in turn is based on both international standards and ILO conventions. SMETA focuses on the pillars of labour, health, safety and environment to determine good business ethics.
Margma is collaborating with various stakeholders to conduct webinars and create awareness among its members.
“We recently joined hands with the University of Nottingham, working in partnership with the British High Commission, to conduct training on labour compliances.
“This was followed by a collaboration with ILO on the decent work in the rubber supply chain project, whereby ILO will provide Margma members various training on the ILO 11 indicators.
“To stamp out debt bondage, Margma members have adopted a zero cost policy in foreign workers recruitment since November 2019. For foreign workers who came in prior to 2019 and are still in debt due to high agency fees paid to unscrupulous agents in source countries, our members embarked on an arduous and complicated debt assessment exercise to ascertain the actual debt, and went ahead to remediate accordingly. Debt bondage is now well managed as most of our members have remediated payments to their workers’ on past debts, if any,” said Supramaniam.
In advocating transparency, Margma is collaborating with the International Organisation for Migration (IoM), a UN-related organisation, to facilitate ethical recruitment practices amongst recruitment agents. With transparent G-to-G agency fees and ethical recruitment in place, the unscrupulous agents will be weeded out. This, together with the zero cost policy, will ensure debt bondage does not occur moving forward.
Margma members are now working diligently to expand and improve workers' hostels according to the Workers' Minimum Standards of Housing and Amenities Act 1990 (Act 446). It is a capital intensive and time consuming process and Margma is constantly engaging with the MoHR and Ministry of Housing and Local Government on this initiative.
Governance: Ethical and fair business practices
The RGI is a healthcare manufacturing industry and consistently invests in strict quality control to meet safety and standards. Members currently undergo about four levels of audits including internal audits, customer-driven audits, independent third-party audits and government audits by MoHR.
Recently, one of Margma’s members was the only Malaysian healthcare manufacturing company and one of the three healthcare industry companies to be included on the Dow Jones Sustainability Indices. Some other members are on the FTSE4Good Bursa Malaysia Index which assesses Bursa Malaysia-listed companies for eco-friendly practices, anti-corruption, corporate governance and labour standards. This clearly indicates the members’ outstanding commitment and dedication towards ESG practices.
“Margma, which represents 95% of glove manufacturers and supply chain associate members, must lead globally, not only by the quantity of gloves exported but show global leadership for the RGI.
“Efforts are ongoing to put Malaysia as the International Rubber Glove Innovation Centre and set up the World Glove Manufacturers Permanent Secretariat in Kuala Lumpur.
“The way forward for the RGI in Malaysia is to enhance our existing USPs of quality, quantity, on time delivery, price affordability and loyalty. To this we need to add on our new strengths in ESG and global leadership, brought about by all the above initiatives by our Industry members,” concluded Supramaniam.
