Announcement: Social Commitment Update

09.Jul.2021

HARPS Holdings Bhd and its subsidiaries are committed to combatting forced labour. We are guided by the relevant standards such as the United Nations Guiding Principles on Business and Human Rights, the Ethical Trading Initiative Base Code (“ETI Base Code”) as well as the International Labour Organization’s (“ILO“) 11 Indicators of Forced Labour.

We continually endeavor for further improve on these fronts, and we engaged an independent professional service provider in 2021 to conduct an independent review of our labour policies and practices in relation to the 11 ILO Indicators of Forced Labour. The service provider verified our labour policies and initiatives in relation to the 11 indicators further to a review conducted on April 2021. The following are further details about our labour policies and practices relating to the 11 indicators:

  1. Abuse of vulnerability. We provide a platform for our workers to speak out through various avenues including a workers’ representative committee comprising members who were elected by the workers, suggestion boxes, grievance mechanisms and whistleblowing policy and procedures.
  2. Deception. We do not impose hidden costs on our workers. We have since October 2019 implemented a zero-recruitment-fee policy that prohibits employment agents and third parties from imposing any pre-employment fee or recruitment fee on our workers.
  3. Restriction of movement. Our workers have freedom of movement outside of their working hours, subject to certain COVID-19 preventive measures which have been implemented as part of our standard operating procedures for security, safety and as part of our contact tracing efforts.
  4. Isolation. Our working areas and accommodations are not isolated, as they are within ten minutes of Teluk Intan town, and we provide free shuttle transport for workers between our factory and hostels. As part of our COVID-19 preventive measures, we provide international remittance services to assist workers in transferring funds back home.
  5. Physical and sexual violence. We have strict policies in place against sexual harassment, drugs and alcohol to ensure that our facilities and our company are a safe place to work.
  6. Intimidation and threats. We have implemented various platforms for our workers to report any incidences of intimidation and threats, including the introduction of a whistleblowing policy in January 2021 in addition to our customary internal grievance procedure.
  7. Retention of identity documents. Our workers have full access of all originals of their identity documents available to them at all times. With our workers’ consent, we provide individual safe boxes and lockers for migrant workers to store their passports and personal belongings. These safe boxes are accessible in a biometrically secured room that is monitored through CCTV where each individual worker has the freedom to access his or her individual safe box.
  8. Withholding of wages. We do not unlawfully withhold or deduct salaries.
  9. Debt bondage. We have a zero-recruitment-fee policy that prohibits employment agents and third parties from imposing any pre-employment fee or recruitment fee on our workers. We have refunded our workers for all recruitment fees collected prior to 2019, amounting to a total of RM11.8 million. Our employment terms also clearly states that migrant workers are not required to pay deposits and are not financially bonded to their employment. Moving forward, we intend to work together with the social compliance consultant to continue study on the topic of repayment of recruitment fees and its application to eligible former workers.
  10. Abusive working and living conditions. We provide our migrant workers with sufficient workspaces and accommodations. Our hostels accommodations are in compliance with Malaysian regulatory standards and are regularly inspected internally and have been audited externally by regulatory bodies, customer’s audit and as part of our regular Sedex Members Ethical Trade Audit (“SMETA”). Migrant workers are eligible for career progression development and promotion as well as a bonus scheme.
  11. Excessive overtime. Our overtime is strictly voluntary, and our maximum working hours of 66 hours per week is less than the limit permitted by Malaysian national labour law. Our overtime is exempted from the ETI Base Code requirement of 60 hours a week. Moving forward, we would like to target to work on the direction of 60 hours a week.

As part of our continuous endeavour to social corporate responsibility and to improve the social welfare of our workers, we are currently constructing a permanent workers’ hostel by providing them with more space in their living quarters. The permanent workers’ hostel is targeted to be completed by second half of 2021.

Some of our customers also conduct their own regular audits of our Company’s social welfare as part of their continuous supplier evaluation coverage. To validate our continuous efforts to strengthen our social compliance, we have also proactively commissioned and successfully undergone a SMETA audit conducted by independent international auditors (UL Verification Services Inc.). SMETA is an ethical audit format which reports on Sedex’s four pillars of labour, health, safety and environment in reflecting good business ethics. Social compliance is an ongoing journey and under our Group ESG initiative we continuously endeavour to improve and comply with prevailing laws, regulations and standards.

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